Indian small business has had plenty of time to prepare for the July 1 rollout of a new national goods and services tax (GST), Finance Minister Arun Jaitley said on Tuesday Any other slippage in the schedule.
Jaitley, at a press conference, said there would be initial problems after the launch of the fee, which will require all but the smallest companies to deposit each day Three detailed declarations.
But, with 6.5 million firms already registered for the GST and more expected to register, there was no excuse for companies not to be ready for what was billed As the largest tax reform in the 1970s of India.
A decade in the making, the GST would reduce barriers between more than 30 states and territories, linking the Indian economy by $ 2 trillion and 1.3 billion people in a single market. The government says it will boost trade and government revenues.
"We have been saying for six months that it would be July 1 – nobody is not ready to be ready," Jaitley told reporters. "If he is still not ready, then I'm afraid that he does not want to be ready."
To facilitate the transition, a GST Coordinating Committee agreed on Sunday to allow businesses to file simplified aggregate tax returns in July and August before they fully comply with the GST from Of September
Any business that generates a large number of invoices will have to adopt special software that allows them to format and reconcile invoices and then download them to the GST network, a computer system that will process up to 5 billion invoices per month .
If companies are struggling to comply, this could block the flow of tax credits on inputs that constitute a new feature of the tax, experts say and groups of companies. This would require companies to pay a tax on the total cost of an item rather than just value added, link working capital and reduce profits.
Jaitley said he expected there to be "some challenges" in the short term after the launch, but he rejected the fears that registration and Compliance with the GST are too difficult.
"Industry and trade must be prepared. This is not a complicated process," he said.
Jaitley stated that he anticipated, in the medium and long term, that improving tax collection under the GST would result in revenue growth and spending capacity of the federal government And regional levels of India would increase.
"Therefore, this should have a positive impact on GDP," Jaitley said. "The size of the formal economy should also increase".