ICAI Jaipur Branch Is Getting Ready For April GST Deadline: Dinesh K Jain
As the country is gearing up to the implementation of goods and services tax (GST) from the next financial year, the chartered accountant community is on an overdrive to have a handle over the multifarious aspects of the new regime.
Speaking to Business Rankers in an interview C A Dinesh Kumar Jain, chairman, Jaipur Branch of ICAI, said that the GST will bring in a revolutionary change in the indirect tax regime. “The implementation will not be seamless from the day one. It will take approx one year to be in sync with the system. The impact on tax rates will be similar. GST will make many cheaper things costlier and expensive things cheaper as GST will average out many taxes,” Jain added.
He recalled the time when VAT was introduced for the first time. “Then also, it took more than a couple of years for the people to settle down to the VAT regime. But GST is bigger in nature as it will be a country-wide phenomenon and the whole ecosystem, including the government departments, the companies, the accountant community and several other stakeholders need to be ready for its effective implementation,” added Jain
There is optimism that the ease of doing business will improve drastically in the country. Companies facing multiple rates of taxes at various states will no longer have to go through the difficulties as tax rates will be more or less equal in all the states.
“Companies coming to India always fret of multiple tax rates at different states. This cumbersome process is one of the reasons why the outside world thinks India as a difficult place to business because of the mountain load of compliance burden. GST will remove these hindrances making India a common market and more lucrative for foreign companies to come and invest,” added Jain.
But such sweeping changes will not be easy to implement seamlessly. Even though the government is burning midnight oil, there is skepticism that the April next year deadline is too steep a target to prepare the background.
“The Prime Minister and finance minister have committed to the April 2017 deadline. But it will be a big ask because of the enormous work that needs to be done before rolling out GST. Even companies are working overtime to prepare themselves for the deadline. We at ICAI have already prepared a Background Material on Model GST Law running to a volume of 720 pages. We have been doing a series of seminars to deliberate on various aspects of the law. Again, we are doing a two-day seminar on October 7-8 for the same purpose for our members,” added Jain.
The Jaipur Branch of The Institute of Chartered Accountants of India is the largest in the Central Region with about 7000 members. Besides being a regulatory body, it also imparts education and conducts exams for CA students. In view of the new regime, Jain said there is now going to be a level playing field both for the experienced and the new ones who what to enter the profession.
“The GST regime gives an advantage to the students to be on the same level of competency as the experienced professionals in the service. This is an opportunity for the students to take interest in the new tax regime as the understanding will put them in equal footing even with the veterans of the field,’ added Jain. With regard to the change in curriculum that will see the inclusion of GST, Jain said if the government introduces GST from next April, the institute will also strive to change the course contents for the exam that happens in May.
The Centre on October 1 announced that Rs 65,250 crore of undisclosed assets were declared in the one-time compliance window, yielding Rs 29,362 crore in taxes to the government. This is the biggest ever black money disclosure in the country. But Jain said that the tax rate of 45% is a little higher and the amount could have gone up significantly if the rates were kept at bit lower.
“The mopped-up amount could have gone much higher had the government kept the tax rates at lower rates. However, there was a rush for declaration towards the deadline date as people realized that the effective rate could be around 38%. This is because the government had said that the half of the tax liability could be paid in the next financial year bringing in the benefits of interest rate on the supposed outgo,” said Jain.