Here are some interesting insights from yesterday on GST all over India
- Banks and GST : Since GST would be leviable on self service as well. That means one branch providing services (like Stationery supply, management consultancy etc.) to another branch or Head office providing such services to all its branches, now would attract GST.
- This rule would impact the most to those setups have large number of branches, i.e. with all banks
- The value on which GST would be applied has to be computed as per valuation rules.
- Since the volume of financial transactions are huge in case of HO/Branches, this would really be a humongous task with the bank HO. Foreseeing this, different banks had approached GST council to make amendments to this clause, but it wasn’t considered and hence its going to be challenging for the banking sector to comply with GST on this front
- Anti-profiteering clause started impacting : We can see that the anti-profiteering provision has already begun to show its shine, since many large corporates (Specially in auto sector), have done the maths and arrived at increase in margins due to implementation of GST and in turn have asked their suppliers to reduce the cost from 2% to 10% for different type of supplies.
- This cost reduction is to comply with Anti-profiteering clause and transfer the benefits to the end consumers.
- As per experts from one of the Big 4 accounting firms in India, the computation of exact increase in margins due to GST would be difficult since the companies might take a stand that the increase in margins is due to optimum utilization of resources, consolidation of warehouses and so on, which would in real sense would be the case.
- It is still not clear as to what would be the penalty in case the companies don’t abide by anti-profiteering clause, and also related rules and regulations.
- Second leg of the budget session has resumed from yesterday and Prime Minister Mr. Modi has said that they are sure to clear GST process will be completed before the session ends. In addition they are below key pointers which would be considered in the session related to GST:
- Classification of Goods and services among different rate slabs.
- Also, which goods and services would attract Cess (On CGST/IGST) in order to compensate state for their loss due to introduction of GST
That’s it for today, hope you all are having great time while updating yourselves with GST. Do drop us feedback, thanks in advance! Enjoy!!