Companies should prepare now for the introduction of the goods and services tax, which is scheduled to take effect a year from now. Girish Vanvari and Santosh Dalvi explain
An immediate concern for anyone contemplating an investment in India is to get the taxation aspects right, which is a daunting prospect given the country’s complex taxation regime.
The government of prime minister Narendra Modi has been working on reforming the tax regime as it looks to further its “Make in India” initiative and to simplify the process of doing business in India. One such reform is the introduction of a goods and services tax (GST) to replace many of the existing indirect taxes.
Progress made
First mooted in 2006-07, the GST was to have been implemented by 1 April 2010. But implementation deadlines have been repeatedly missed, primarily due to the differences between the central and state governments on the constitutional amendments that implementing the GST will require. Another sticking point has been how states are to be compensated to offset possible revenue losses they will face.
Girish Vanvari is head of tax at KPMG in India, where Santosh Dalvi is an indirect tax partner.
