Vivek Mishra, Indirect Tax Leader, PwC India
The Finance Minister of India has reiterated that 1 April 2016 will be the date for implementation of GST in India. The current government seems to be very keen to follow through and there is more visible progress today than there has been in the last several years. The most significant indication being that the constitution amendment bill was passed by the Lok Sabha last week.
Unfortunately for those expecting this speed to be sustained, the bill has been referred to a select committee in the Rajya Sabha. This is not a significant setback in the larger scheme of things.
Without getting into the technicalities of the process required to amend the constitution, I would say that while the implementation of GST by 1 April 2016 seems to be a bit unrealistic, it’s safe to assume that it will happen in the shortest timeframe possible.
Once the constitution has been amended and the GST council has issued a draft GST law, the states will have the liberty to enact their GST laws. It is at this point that there can be a possible delay. It is unlikely that the states will enact a new law till all their officers are reasonably acquainted with it. There is a small body of officers in each state that is extremely familiar with GST, as it has been working with the Empowered Committee for years. However, the majority has been busy administering the current taxes and will require extensive training.
Therefore, it will be difficult for 1 April 2016 to be the final go-live date. This delay may nonetheless be welcomed by most as it will present an opportunity for the industry to prepare for the proposed GST regime better.