GST has filled my schedules with meetings and more meetings! Day dragged along with discussions about updated tax slabs, analysis on recent GST updates, implementation, after effect on existing financial methodologies, all this and more…phew! I was completely zoned out. It was Azim Arora, my CFO’s turn to present his talk – clearing his throat he addressed me, “Mr. Kaul! Should I run over the brief of updated rules, laws and impact on IT systems as well?” This snapped me out of my thought pattern. I was dead tired after a long day full of meetings and exhausting discussions with my Sales Head – Ms. Xavier, Purchase Head – Mr. Bharucha and Mr. Arora.
My day had dragged from one meeting to another. Some meetings were prolonged…some meetings were added to my schedule…some meetings got cancelled…but in all we couldn’t come up with a solution on how to handle the new changes strategically. These meetings were supposed to be the judgement day for all our units spread across India, our vendors and purchasing units along-with our suppliers. We had finance heads awaiting a decision, so that they can manage planning the action on grounds. With their hopes hanging on my shoulders and decision, I wanted to space-out and learn the nuances very minutely.
In the middle of the meeting, I was interrupted with a call from a News Reporter asking, “Sir, as the Union Budget 2017-18 has been presented, what are your expectations for the textile industry in general and how ready is the industry to handle a smooth transition?” Alas!!! This was the last thing I wanted to hear from somebody during this unsettled day. I slammed the phone and walked right away.
I banged into my cabin and reclined on my chair, took in a few deep breaths to calm myself. It was highly essential for me to understand the nooks and corners, explore each new policy and its impact in-depth and mandates expected with GST Implementation, I called my Chartered Accountant- Mr. Ashok Mehra.
On seeing Mr. Mehra, I started shooting arrows...
- Are we aware of this demon - GST?
- How are we benefitting from GST implementation?
- What are we going to do, how are we going to keep up with the upcoming tax structure for textiles? We have multiple branches, suppliers and vendors – won’t this be complicating?
- We already have a software, do we have to hire a licensed Goods and Service Suvidha Provider (GSP) for implementing GST compliant software?
- Why do we go digital and invest so much money for a GST compliant software?
- Why can’t I save money and ask our CA firm to download a free software?
Mr. Mehra was standing there with an armor, all ready to answer a series of questions that have been whirling in my mind. Settling down, he confirmed me with a positive smile that there is nothing to worry about.
GST is going to be a very smooth process and is going to revolutionize the Indian taxation system. He asked me to sit back as he is going to take me through the GST journey.
“The state and the central taxes will be encompassed into one single taxation system – GST. There will be a reduction in the cascading effect of taxes.
GST rates have been finalized and the slabs have been fixed at 5%, 12%, 18% and 28%. The GST council considers of levying 12% tax on the textile and clothing companies, whereas the textile companies seeks to have a uniform duty of 5% under GST.
The rates of taxes will be proportional to the value of goods and services which means the rate of the taxes will reduce which will benefit everybody from the government to businesses and consumers. There will be a wider base for taxes which will eliminate the classification of products.”
Mr. Mehra diligently shared his thoughts on paper and pen and said, “Let’s take an example of our company who is dealing with the production of clothing and distribution. So, the prices from buying the raw material to the finished product, the prices will reduce which will benefit the businesses as well as the government.
The organization whether it is small, medium or large, has to go digital because the GST on the whole is going digital. It is impossible to function without a highly-enabled software which is robust and scalable in nature. Imagine working with thousands of invoices which will require speed, accuracy while return filing. Creating a GST compliant software will bring ease to the filing process. “
“GST- A Taxation Wave bringing Digitization in Businesses”
“With the digitization of GST, manual filing of data could be avoided which will bring transparency and error free data during the filing process avoiding various complications. There can be a reduction in leakages which will curb malpractices, ‘Reconciliation’ will be a thumb rule which will assist in more clarity. Digitization move will increase tax collections. “
Hearing this, a sense of relief was spread across my face. I called out loud, “HANG ON! let me call everybody. We need to brainstorm everybody RIGHTNOW, RIGHTAWAY.”