There are a lot of diverse views in the market regarding the launch of GST from July 1st. There are people who are 100 per cent sure that the GST launch would be delayed. There are others who will get into action only after the launch takes place. A number of smart businessmen had started the preparations long back and are well set for the launch. Industrialists who are convinced of the benefits of a simplified tax structure have already gone a step ahead and are demanding the GST registration numbers or provisional IDs from all their suppliers so as to have a smooth transition on the very first day.
The Journey: If people have gauged the resolve of the current government correctly, they should be more than convinced that GST will happen from the 1st of July. If one reminiscences the past events in the run up to the GST, one would realise that the government has removed the impediments one by one and taken the people in its stride. There is hardly any incident where there is a forcing upon of issues on the people involved, let alone the parliamentary debates and walkouts which are a must for any democracy. At every juncture, the ruling party has found out workable solutions and reached consensus. Every meeting of the GST Council has resulted in important decisions which have given strength to the GST movement.
Future preparation: There are unwarranted fears in the market that there will be a shortage of drugs in the market as the pharmacists would destock medicines in order to avoid losses at the GST rollout date. The government has not shut its doors but is giving a patient listening to the problems in order to avoid any potential losses. With a large magnitude reform like the GST, it is evident that there will be issues at rollout. It is good for the industry groups to bring it to the forefront now and discuss out probable solutions. In the case of the pharmaceutical sector, the government has already agreed for a full refund against VAT of 6 per cent subject to availability of documents. Against the excise component, an input credit of 40 per cent has also been allowed. The manufacturers along with the stockists need to work out a solution for the 3.6 per cent loss here and talk it over with the government.
Unfounded fears: People are comparing the GST implementation with the disruption caused by the demonetization move. They expect an economic slowdown, inflation upswing and a number of problems cropping up. In their pessimist approach, they are forgetting that the economy and government has given them ample time to prepare for the reform, unlike demonetization which was a sudden move. When we recovered in a short period from the effects of demonetization, we should not be worried at all about GST which is a structured reform.
You still have time: With the reverse counting in place for the GST launch, we should be having a checklist in hand for our business or industry. In fact, we should already be tick marking the activities that we will do on the very first day of the GST rollout and subsequently for the next three months. We have to work out solutions for the gaps if any and make all the service providers and goods suppliers associated with us to comply with the GST norms right away.
An eye opener: We recently placed an order for plastic bins for our company on a bin manufacturer. He has refused to supply the bins till we give him the GST registration number or provisional ID for the creation of the customer master in his ERP system. This is an example to highlight that if you do your bit the GST will happen seamlessly. Those who are expecting miracles can brace for losses.