Govt keen on GST rollout in July to save Diwali sales


NEW DELHI: The government is keen on a July 1 rollout of goods and services tax(GST), instead of postponing it to September, to avoid the possibility of businesses getting hit during the peak festival season which includes Navratra and Diwalisales.

While the Modi government has maintained that it wants to move to the new tax regime from July, some tax consultants, industry bodies as well as a few states have suggested that a September launch will help with a smooth transition to new regime.

Senior government officers, however, said that there is only a small section that wants to postpone the rollout, and that majority of businesses have prepared themselves for a July rollout.

The overhaul in the tax regime is expected to result in massive changes in the way businesses operate — from electronic invoices to filing and fewer check posts at state borders.

Apart from the transition coming at the start of the quarter, politically too, a July rollout would ensure that businesses have settled down by the time assembly elections are held in Gujarat and Himachal Pradesh in November.

But the bigger concern is the festival season as there is a spurt in demand for large number of products from garments to gold and automobiles.

“The fireworks industry in Sivakasi may be impacted by a September launch,” said a source.

 Already the industry is preparing for the switch-over with production cycles tweaked to ensure that there are no hiccups during the transition period.
“For large companies, the production cycle is around 45-60 days and if it includes imported components then orders may have to be placed even in advance. The larger companies are working towards the July rollout,” said a consultant with a global tax and audit firm.

The government had planned to move to GST from April but had to defer it to July as it sought to build a consensus with the states on key aspects such as tax slabs.


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