Earlier, the role of CFO was limited to managing accounting and capital expenditure but now in the modern era, his role has been widened. It has become more strategic to meet the challenges faced by the Indian economy. As studied by various experts upon this particular role into an organisation, there was uncovered a new story.
With the implementation of GST, his role is expected to get diverse and thus the CFO will be facing a lot of challenges with regard to GST. The first challenge that not only CFO but the whole country is facing is regarding its implementation. As there are no clear cut transitional provisions, therefore bringing ambiguity in carrying on the business and to predict the impact it will be having on the business.
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Shifting from a tax regime followed since inception to a totally different regime all at once is the biggest tax reform for our country. The primary role of CFO is to predict the future financial impacts on the businesses and then and thereby managing financial risks faced by the organisation but for GST no prediction can be made as it is impossible to accurately calculate how the economy will be impacted after its implementation.In the absence of clear laws and procedures, businesses would need to anticipate and develop alternate scenarios for the GST design and assess its impact on their accounting and compliance frameworks, cash flows and organisational structure.
Also, rates have not been finalized for many goods and services, therefore it would be difficult to assess the impact, whether positive and negative the rates when notified would be having on the business. If the rates which has not been notified yet have a negative impact after being notified, how the business would be dealing with it is one of the major challenge faced by CFO’s. There are other issues which will require strategic planning once the GST will be implemented. Building awareness for GST is the need of the nation. Well said by someone ‘with Proper awareness and education, work is half done’.
DEAR MADAM,
PLEASE GUIDE ME TO RCM ON TRANSPORATION CHARGES. AND WHAT A DIFFERENCE BETWEEN RATE OF TAX 5 % & 12%.
In case services are provided by goods transport agency in respect of transportation of goods by road, the receiver of goods shall be liable to pay GST under RCM. The rate of tax in case of such transportation services is 5% if the input tax credit of GST paid is not availed and 12% in case input tax credit is availed.
My Company IMSPL has paid rent – A – Cab Service to Night Ship employee & 50% recover from employee salary. The 50% recover amount is taxable under GST or not. Please reply to below email.
You have done a wonderful job. Yes it is true that it is unpredictable to think about what will be the impact of gst on market.