The GST Bill was first expected to be passed in the monsoon session in August 2015. If Finance Minister’s predictions come true and the GST Bill gets passed in April 2016, there would still be a delay of more than 8 months.
A very happy new year to you!
After the large swings in fortune for GST that we saw in the last month –sometimes favouring the passage of the bill and sometimes against, the winter session of the Parliament ended on 23 December without any outcome for GST. The question that is now asked is “does this mean that GST would now have to wait till April 2017?”
Frankly, it would be difficult to predict when exactly the GST Bill will get passed in the Parliament. Recently, Finance Minister Arun Jaitley, while addressing officer trainees of Indian Revenue Service said, “The next session (i.e. Budget session in February & April) is going to be extremely important. And halfway through the next session, the numbers of the Upper House are also going to change. So I am reasonably optimistic, as far as the next session is concerned, that we may be able to push it (GST Bill) through”
The GST Bill was first expected to be passed in the monsoon session in August 2015. If Finance Minister’s predictions come true and the GST Bill gets passed in April 2016, there would still be a delay of more than 8 months. However if the Government is really keen to introduce GST in 2016 itself, it can still work around and cover up part of this delay. Since GST is a transaction tax and not an annual levy like Income tax, it could kick off in the middle of the year. The government however will have to run this as a project, listing activities that are not dependent on the passing of the Bill in the Parliament such as a consultation with the industry on the GST processes and the GST law, testing of GSTN (which is under development) on the current tax system once it is complete etc.
Industry can also use this breathing space to step back and review the possible impact on the operations of the organization. Whether one should gear up for GST or put GST on a back seat, would be a choice each organization would have to make. We have already discussed in the GST Pulse dated 9 December what areas of business are likely to be impacted under GST. Thereafter we had discussed, in some detail, the potential impact on finances and impact on cash flow. In the same series we would, in the coming weeks, look at the impact of GST on pricing, supply chain, logistics etc. We hope this would help you in appreciating the impact of GST on your industry and more specifically on your organization.
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