India, is on the cusp of a massive tax reform with movement from the existing multiplicity of indirect taxes to a Dual Goods and Services Tax Regime (Dual GST Regime). With introduction of the 122nd Constitution Amendment Bill in the Parliament, there is renewed optimism that the most important piece of India's tax reform initiative, is on course and introduction of GST from 01 April 2016 looking pre-eminent.

The much awaited GST Regime announced way back in 2006 had missed several deadlines in the past, due to lack of political consensus. The groundwork on GST implementation got a fresh impetus with the new federal government taking charge in 2014. The new government laid down a strong intent statement of implementing GST in the Union Finance Budget in May 2014. The intent statement was followed up with introduction of the revised Constitutional Amendment Bill in the Parliament on 19th December 2014 post hectic parleys with the States to evolve a consensus. In the Union Budget 2015, the Union Finance Minister had underlined the importance of GST to be a game changing reform for the Indian Economy and reiterated their commitment to make it a reality from 01 April 2016.

However, it is observed that corporates in India still appear ambivalent about the impact of GST on business, on the pricing of products and services, and on making their businesses and processes GST-ready.

The biggest challenge for the Indian corporates is to understand the enormity of GST. GST will impact every part of the business from financial reporting and tax accounting to the supply chain. This will lead to a potential re-design of procurement vendor contracts, buying models and changes in the IT and ERP systems.

Special attention needs to be given to long- term contracts, while tax clauses have to be examined for change of legal provisions. Business contracts have to recognise GST's impact while drafting the agreements with enabling clauses, to pass on the additional incidence of GST.

It is pertinent to highlight that there is no standard benchmark to assess the cost involved for companies to be GST-ready. The cost involved for companies to be GST-ready will differ from industry to industry, and from sector to sector. The effort and costs involved would largely be dependent on the nature and breadth of business operations. Having said the above, service companies might need a much higher resource involvement in streamlining their processes and procedures and transition to the compliance framework.

Further, going by the international experience, it is expected that GST could create an inflationary pressure in the Indian economy for a period of 12-15 months after its roll-out. The pressure should subside as the impact on product pricing starts to play out. Nonetheless, competitive pressures would also ensure that prices would come down over a period of time.

Undoubtedly, the clock has started ticking for corporates to take notice of the above and gear up for the GST implementation from 01 April 2016. Clearly, it still is 'early days' in corporate India's journey to be GST-ready.

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