Free GST Updates – 23rd Feb 2017

  1. Entry Permits to continue at Inter State Boarders – This is another setback for GST as it defeats the purpose of seamless movement of goods across boarders in the whole country.
    1. There would be E-  Permits to be obtained at all inter state boarders. Earlier there was manual permit.
    2. The current corruption in permits would continue since the states wants to continue with the same process and resisted to change in terms of free flow of goods
  2. Paper work too to be continued : The transport vehicle was required to have specified list of documents if the total value of goods being carried exceeds Rs.50K, the paper work continues in the GST era as well which defeats the purpose of ease of doing business. Specially the E-Commerce industry wasn’t happy earlier and their pain would continue in GST era as well.
  3. GST on Free Supplies : This is something new which did not existed under current tax laws. The impact would be most in Pharma Industry wherein the proportion of free supplies is Approx. 25% of total revenue. This would have a direct impact on the cost and hit the Pharma industry the most.
    1. There would be GST on stock transfer as well, this again would result in blocking of working capital for a short period
    2. Valuation of such free supplies would be another challenging activity since GST would have to be applied on the value of goods derived from applying valuation rules
  4. ERP and allied costs to up initially during GST era : Due to introduction of time bound online credit matching and minimum exemptions, the need to automate the compliance’s and set a robust process would be the bare minimum need to any organisation.
    1. Currently in SME sector, the use of ERP is not so famous, and hence during GST scenario the ERP cost would go up
    2. This can be an opportunity for the SME’s and startups to automate the process and adopt any suitable ERP for its organisation

 

These are some great updates for today. Do comment on this post for any queries or clarifications. Enjoy!!

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