During my visit to India this week there has been a lot of talk about the implementation of the General & Services Tax (GST) and when it will happen. It was due to start 1st April but looks like it will be pushed back to 1st June.
Some commentators think it may even be as late as November. There is a real push from the large businesses in India for it to be implemented sooner rather than later. GST is a consumption based tax levied on sale, manufacture and consumption on goods and services at a national level. It will replace all current indirect tax levied by state and central government.
The present system meant that if goods moved between 2 states in India taxes would be payable in both states. Businesses trading in India whether Indian or foreign have been crying out for this simplification for many years. It is anticipated it will add 2 percentage points to the GDP growth of India. If you are a business trading in India you should already be making the necessary changes within your business to be ready for when the GST is implemented.
From an indirect tax standpoint, the highlight of the Budget speech was the emphasis placed on the progress made by the government with respect to achieving various GST-related milestones.