GST is likely to be a reality next year, if not from April then surely from September, a UBS report says. The assessment is based on its meeting with policymakers, tax/logistics experts and retailers as part of its two-day GST trip to Mumbai and Delhi, which showed that most are convinced GST will be a reality in 2017 – if not from April, then surely from September.
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According to the report, the proposed slabs of 6, 12, 18, 26 per cent will imply a uniform tax rate on a single product or service across India. “Passage of this law during the Winter Session of Parliament remains key to 2017 implementation, in our view, rather than preparedness of ecosystem (corporates, tax officials, IT network),” UBS said, adding that its meetings with the government and Maharashtra state officials suggest that “preparedness and confidence remain high”.
According to the report, bigger corporates have been preparing for GST, but smaller ones are not yet ready – “our discussions suggest three-month transition time”.
UBS further noted that the mood was “euphoric and unanimous” about GST, but near-term hurdles were also widely accepted.
Citing examples, the report said monthly filing of returns in multiple states will be a big change for some, and uploading of transaction-wise details can be intimidating initially.
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“The integrated IT network will be a key driver of the success of GST and its benefits – in our view, this will itself ensure GST is a game-changer reform,” UBS said.
The GST Council, which began 2-day deliberations today, is likely to finalise a 4-tier tax structure.
The meeting will have to sort out the issues concerning tax rate to enable Parliament to approve the Central GST (CGST) and Integrated GST (IGST) legislations in the Winter Session beginning November 16 and pave the way for rollout of the new indirect tax regime from April 1 next year.