1. What are your views on industry preparedness for GST?

Industry is still grappling with the new laws around GST which requires registration and regular filing. GST is planned to be an entirely online process and industry is startingto realize the requirements for the infrastructure to be set up. GST filing is to be done periodically and this mandates small businesses and traders be trained on the entire process.

2. GST implementation follows barely a few months after the Demonetisation exercise. Is the economy prepared for such rapid and deep changes?

With the GST rates for different items finalized in July, several industries are still reviewing the impact the new taxes will have on their sales and profits. In the shortterm,GST is expected to have an impact on the profitability of some industries where the GST rate is going to be higher than the combined rates of all the other taxes earlier applied. This will become apparent in the quarterly results of the companies reported in the second quarter of financial year 2017–18. Another significant impact is expected onthe small sector and traders who are now required to compulsorily registerbefore they can supply their goods to any registered medium and large sector company.

3. How will GST impact industry and consumers?

The impact will be mixed depending on the industry. Companies will have to build IT infrastructure and work on additional filings, leading to additional investment in IT and staff. Reverse charge and distinction between SGST, CGST, and IGST will need to be understood in detail by the suppliers. Consumers can look forward to decrease in prices as the Government has promised. However, this impact is expected to be seen only in the second half of the financial year when the new rates are fully incorporated for the products manufactured.

4. With the rates that have been finalised, what are your views on the inflationary impact of GST in both goods and services?

Whether GST is going to lead to inflation or a decrease in prices (as the Government has promised) will become visible only later in the financial year. For prices to fall, small and medium sectors will need to fully comply with the GST requirements as laid down by the Government.

5. Input Tax Credit is vaunted as one of the most important benefits of GST. How exactly does this work and what is the likely impact on end consumers?

The new method of GST levy is expected to provide full credit for all the taxes paid by the company, whether on services or on goods. This implies the tax collected by manufacturers from their customers will be paid to the Government net of the taxes paid by the company to its suppliers.This is expected to reduce the earlier levy of taxes on taxes.However, under the new regulations, input credit is allowed to a company only if the supplier has deposited the tax that is collected from the company. So, every input credit a company claims will be matched and validated before any company can claim it.

6. How important is it for students of management to develop a thorough understanding of GST implementation?

GST is expected have a major impact on the Indian economy. The impact will be across all types of industries – small, medium, and large. Management students joining any company will need to decide on sales or purchases depending on the impact GST will have on the profitability of the company. Hence it is crucial for management students to be fully aware of the implications of the GST rules and regulations on the operational profitability of the company.

7. How is GIM introducing updates to its curriculum and classroom discussion to keep students abreast of developments around GST?

GIM will be organizing workshops for the faculty and students to learn about the new GST regime. A tax expert will be taking a course on taxation for the second-year students to provide detailed information on GST laws.

source by https://www.gim.ac.in/