GST will increase the ease of doing business in India, according to 93% of our survey respondents
After two sessions of political deadlock, a fruitful GST discussion in the Parliament is highly anticipated in the current Budget session.The industry has high expectations that a formal road map for GST could be announced in this session. Accordingly, we conducted a survey to capture the industry’s sentiments on GST.
This survey was conducted from 12 February 2016 for a week. It mainly focused on understanding the industry’s optimism on the passage of the GST Bill in the Budget session, major challenges perceived by the industry, time required for the actual transition/implementation and the present level of preparedness of the industry for this reform. We have summarised the survey results below:
Will GST increase the ‘Ease of Doing Business’ in India?
93% of the respondents answered the question in the affirmative. GST will absorb all major indirect tax levies and provide fungibility of credit across the business chain and is thus considered one of the major factors that will influence business decisions.
How optimistic are you about the GST Bill being cleared in the Parliament’s Budget Session?
52% of the respondents feel that it is likely that the GST Bill will be cleared in the budget session, the remaining 48% are still skeptical about it. The Bill faced strong opposition in the Indian Parliament during the previous two sessions which has affected the optimism of the industry. With the opposition keen on highlighting social issues in the ongoing budget session as well, it would be interesting to see how and when the GST Bill is tabled.
When do you think will GST be implemented in India?
52% of the respondents feel that it would be appropriate to introduce GST in April 2017 and only 17% feel that it will be implemented after 2017. The implementation date of April 2016 seems unrealistic given the political deadlock in the Rajya Sabha (Upper House). Considering the preliminary challenges that will arise after the political hurdles are overcome, the corporate sector’s estimated target date of April 2017 seems practical and achievable.
What are the major challenges from a GST-implementation perspective for a business organisation?
70% of the respondents anticipate IT upgradation to be the most prominent challenge followed by product pricing and supply chain re-engineering. Transition will involve changes in IT systems, supply chain, working capital and product pricing among other changes. We accepted more than one response to this question as the challenges to businesses concerning the implementation of GST are many.
According to you, how many months would an organisation need to prepare for GST before the implementation date?
The respondents feel that they will be able to reconfigure their businesses in less than a year. Infact, 80% feel that they will not require more than 6 months to transition to GST. The respondents believe that the preparation period of 6-12 months coupled with the likely implementation date of April 2017 will provide an adequate preparation time.
Have you assessed the impact of GST on your organisation based on the GST Bill (122nd Constitution Amendment Bill) and Process Reports and if not, should businesses start conducting GST Impact Analysis after the Draft GST Law is made public?
67% of the respondents have not assessed the impact of the proposed GST Bill and the business process reports on their organisation. However, the same percentage of respondents said that they will conduct a GST impact analysis once the draft GST legislation is made public. On the contrary, the remaining respondents 33% who have already analysed their primary impact areas based on the GST Bill and the process reports reflect optimism and pro-activeness of the industry.