Nothing makes it more evident that Goods-and-Services-Tax (GST) will be rolled out from July 1 than a visit to a market. A number of apparel brands are offering huge discounts like 40% or 50% or buy 2 and get 2 free. Traders, in vast numbers, are worried because they are not clear as to what will happen to their existing stocks, once GST becomes a reality. A lot of them take input-tax-credit on value-added-tax (VAT) till now. Since VAT will be absorbed by GST, traders are worried whether they will get input-tax-credit on VAT they have paid till June 30 or not. rNaturally then, business-people in huge numbers are going to chartered accountants (CAs) and other tax experts to know exactly what will happen. These experts explain as much as they can, but for some issues, even they are coming to terms with how GST will impact.rFor example, thousands of parts go into the manufacturing of a car, all of which are taxed at a different rate. After getting manufactured, cars are transported to all parts of India inviting even more taxes. Thanks to such complexity, it becomes very tough for a tax expert to really comment how taxes on hundreds of models of cars will change once GST is rolled out.rThen, another issue is GST will have monthly compliance, which means businesses will have to maintain their records very efficiently on day-to-day basis.rAs of now, compliance of VAT and luxury tax is once in a quarter. But, all this will change post GST. Even small hotels and shops will have to take help of a tax practitioner for GST’s monthly compliance. Due to these reasons, there is considerable uncertainty in the system with regards to GST. It’s actually this uncertainty, which has made some traders offer huge discounts. In times such as these, the key for everyone, whether the government or businesses, lies in transition.rIt all depends upon how our economy will move ahead from having innumerable indirect taxes as of now to one GST from July 1. There is no denying that both central government and state government departments are working very hard for this transition.rThe commercial taxes department in Goa has even tried to address these concerns by saying that input-tax-credit will be given on existing stocks as on June 30, provided proper documentation is showed to them. Most dealers in Goa have already registered on the GST portal as well. Given all this, it appears that the administration is on the right track. Still, it is likely that there will be hiccups in the initial days. But, on the positive side, with GST, most products will be taxed at somewhat similar rates across India, making it one unified market.
