Post GST pric­ing sug­ges­tion con­fuses IT part­ners

The DQWeek (Mumbai) - - FRONT PAGE - SUKSHAM SHARMA Con­tin­ued on Page 2

Goods and Ser­vices tax ( GST) is an im­por­tant tax re­form. It is like a trig­ger, which will be re­sult­ing in big busi­ness trans­for­ma­tion for the IT in­dus­try.

Few days back, Sri­na­gar was cho­sen as the venue for the GST Coun­cil meet­ing, where cen­tral and state Fi­nance Min­is­ters met to fi­nal­ize GST rates. Fol­low­ing this, the gov­ern­ment has in­di­cated that to mon­i­tor prices of var­i­ous items it may set up an anti- prof­i­teer­ing author­ity.

With greater ef­fi­ciency in the sup­ply of prod­ucts, en­hanced flow of tax cred­its, re­moval of bor­der check posts, and changes in tax rates, prices of goods and ser­vices may come down. Fi­nance Min­is­ter Arun Jait­ley re­cently stated re­cently stated that the Coun­cil has clas­si­fied sev­eral items un­der lower tax rates, when com­pared to the cur­rent sys­tem.

How­ever, since some tax rates such as VAT cur­rently vary across states, the real im­pact of GST rates on prices may be­come clear only af­ter its roll-out. For ex­am­ple, at present VAT rates on smart phones range be­tween 5-15% across states. Un­der GST they will be taxed at 12%. As a re­sult, while phones may be­come marginally cheaper in some states, their prices may go up in some oth­ers.

In the whole process, the hard­est hit are the small and medium IT busi­nesses who lack both un­der­stand­ing and the re­sources to adopt GST tools read­ily but no doubt are try­ing their best to go with the flow and groom them­selves on the same.

The DQ Week took the ini­tia­tive and talked to the dif­fer­ent IT as­so­ci­a­tions’ ex­ec­u­tive mem­bers on the re­cent an­nounce­ments of GST and took their re­ac­tions re­lated to the same.

In the talk­ing, Vipul Datta, Chair­man, In­fotech Soft­ware Deal­ers As­so­ci­a­tion(ISODA) shared, ” We are still wait­ing for a very spe­cific in­put on soft­ware, and soft­ware as­so­ci­ated ser­vices. More clar­ity is re­quired as of now. We are try­ing to reach gov­ern­ment agen­cies and try­ing to gather more and more clar­ity on the same. The only con­cern is that we def­i­nitely see chal­lenges ini­tially(in the first 2-3 months of im­ple­men­ta­tion) and the con­cern is im­ple­men­ta­tion and con­sol­i­da­tion, the gov­ern­ment must have some pro­vi­sions to be able to com­fort the com­mu­nity”.

Srid­har Ra­manna, Pres­i­dent, As­so­ci­a­tion of In­for­ma­tion Tech­nol­ogy (AIT) says, “There could be a short-term dis­rup­tion in the com­puter re­tail and over all IT trade might take a hit due to in­crease in rates due to GST. The IT pen­e­tra­tion will slow down due to cost es­ca­la­tion. The Gov­ern­ments Dig­i­tal In­dia pro­gram will also be ef­fected, as IT in­fra­struc­ture & De­vices form the core of the project”.

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