GST Launch

Why the government must go ahead on schedule…

With the GST launch date of July 01st fast approaching, the jury is still out on whether Indian business is prepared for the launch. Frankly, there are no clear answers and one will know only once the entire GST is implemented. There are, in fact, 4 key reasons the GST Council must go ahead with a timely launch. Here is why…

No room for simulation… 

The problem with a project of such magnitude and complexity is that you can never simulate to perfection. It is like trying to simulate a war situation. Even with the best of training and preparation, there will be an element of surprise in actual implementation. The same applies to GST. There is no point in spending more time simulating. The GST Council will have to go ahead with the launch and address challenges along the way as they come.

Need time to watch inflation… 

One of the big challenges of GST in most countries has been the inflationary impact in the first few months. While the GST Council is confident of keeping inflation in control, one will have to really test the waters. Getting too close to the 2019 elections will reduce the incentive of the current government to go for aggressive implementation of the GST. We have less than 2 years for the next elections and it is the right time to test waters with limited risk.

Industry is fairly prepared… 

Over the last 2 decades, Indian companies have largely migrated to ERP platforms to manage their processes. This has made their entire operations much more flexible, granular and adaptable. The shifting from a plethora of taxes to a single national tax can be handled easily with the kind of scalable software programs that Indian companies deploy today. For large companies, GST implementation is not a major issue. For smaller businesses, most of them are likely to be outside the ambit of GST. The entire process does not involve too much of paper work and with the launch of GST, small business units will actually benefit. Hence, there is no justifiable reason for delaying the launch of GST.

You get time to tweak…

While the idea of GST is progressive, it is likely to increase the documentation requirements. For example, a mid-sized company with operations in 10 states will have to file a total of 370 returns each year. Such statistical anomalies may require tweaking. Also, the fully seamless and online treatment of GST may not be entirely practical. This will also require tweaking at appropriate places. For such tweaks, you require ample time at your disposal and that is possible only if the GST is launched in July. There may be problems but we will be better off with a July 01st launch! ©

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