Finance Minister Arun Jaitley said on Tuesday, small business industries have been provided sufficient time to get ready for the new GST Regime from 1st July.
While addressing a news conference, Union Finance Minister Arun Jaitley said that initially, the country would face challenges after the implementation of new GST Regime. All businesses will be required to file returns but specifically smaller businesses must have to submit three detailed returns in every month.
Currently, 6.5 million businesses firms have already registered under the Goods and Service Tax Regime ( GST) and expected that more firms will register under this movement. The GST is a biggest tax reform since Independence and the firms are not required to give any excuse that they are not ready for the new regime.
A decade in the making, the GST would bring down barriers between more than 30 states and territories, also the GST would integrate India’s $2 trillion economies and 1.3 billion people in one individual market. Further, the government says that it will enhance the commerce as well as state revenues.
Jaitley said that “We have been saying for the last six months it would be July 1 – nobody has any business not to be ready,” Jaitley told reporters. “If he’s still not ready, then I’m afraid he does not want to be ready.”
Any of the company who is operating the business in large scale and creating a large number of invoices will be required to implement special GST software packages. Through this special GST software packages, companies are able to reconcile invoices and upload them into the GSTN portal, an Information Technology platform will operate up to 5 billion invoices in a month.
According to the business groups and experts, if in a case companies are facing problem to follow the new regime, that could block the flow of input tax credit which is a new feature of GST. This would force firms to pay tax on the full cost of an item rather than just value added, tying up working capital and cutting into profits.
Jaitley said that, it is expected that the country would face “some challenges” in the short term after the implementation of GST Regime, but he ignored concerns registering and complying would be difficult in the GST Regime. He further added that “Industry and trade have to prepare themselves. It’s not a complicated process,”
“Consequently, it should have a positive impact on the GDP,” said Jaitley. “The size of the formal economy should also increase.” It is anticipated that in medium and long term GST Regime would improve the tax collection system and also enhance the revenue of the country. It also increases the spending capacity of India’s federal as well as regional governments, Jaitley said.
