'Goods & Service Tax Can Easily Be Referred As Biggest Fiscal Reform'

Brian Pecarelli defines the GST as the biggest fiscal reform since India's independence. He shares insights on the technological reforms that play a very important role in the new reform in an interview with BW BusinessWorld.

How will the Goods and Service Tax benefit India?
The Goods & Service Tax (GST) can easily be referred as the biggest fiscal reform in India since its independence. GST, when implemented, will provide a big boost to the ease of doing business in India by subsuming almost all  state and central indirect taxes, thus streamlining and encouraging compliances for tax payers while checking tax evasion simultaneously. The new tax regime will turn the entire country to a level market with reduced costs of manufacturing, logistics, capital goods etc. while remaining competitive against imports.

How is India different compared to other countries in embracing GST?  
GST implementation in India is unique in terms of the time frame given by  the Government for the corporations to comply. As an example, Malaysia got 18 months for implementation after the law was formalized, whereas in India it's just close to three months.  
 
Another unique feature of India GST is it's dual tax structure which comprises of CGST, SGST and IGST - Centre would levy Central GST (CGST) and States would levy State GST (SGST) on every supply of goods and services within a State. Integrated GST (IGST) would be levied on all inter-state supplies by the Centre and then transferred to the destination State. While Canada also has a dual tax structure for GST, India GST is unique in its structure with the proposed four-tier tax structure.

What are the latest technological trends used for tax reforms?
Given the ever-increasing complexity of regulatory compliance on a global scale, many businesses are undertaking transformation projects to ensure transparency and accuracy. For example, corporations are moving away from using manual spreadsheets in favor of automated systems that reduce the risk of errors. .

Governments are increasingly resorting to technology to collect and cross-check information, enabling an increased ease of taxation for taxpayers, increased efficiency of the tax administration, and lower tax leakage. More and more, we are seeing discussions among governments and corporations around leveraging blockchain, as an example, to promote automated, transparent and disintermediated transactions. Additionally, we are seeing greater emphasis on e-Government initiatives such as Making Tax Digital in the UK, where the taxing authority makes real-time tax data directly available to tax payers.
 
What is the role of technology in integrating GST?
Technology has led the way for GST implementation across many counties, and India will be no different. Technology will form the backbone and will play a big role in ensuring tax automation and compliance across multiple platforms. It will help businesses streamline their tax processes, minimise dependencies on manual processes and increase transparency in determination of taxes. It will also play a vital role in providing an audit trail of transactions and required reports which are useful in internal analysis and audits. It is great to see that the Government has already created a special arm in the form of GSTN to lay down the much-needed technological infrastructure.

Why is there an increased demand for transparency with respect to tax reforms and collection?
Worldwide, a far-reaching list of corporate tax reforms, localized sales and use taxes, transfer taxes, and even specialized taxes on Internet purchases and streaming media have created an unprecedented level of complexity for corporate finance departments that must keep abreast of all changes in order to remain compliant in every jurisdiction in which they do business. For many multinationals, this means having to keep up with hundreds of changes in thousands of jurisdictions globally, with ever-shrinking resources.

Given the complexity of these regulations, it's essential that firms and corporations stay up-to-date on the latest developments in order to be prepared and understand the impact on their organizations. Thomson Reuters believes that increasing tax transparency and simplicity is to be welcomed.

How do you see the impact of GST in India after 5 years?
GST implementation will create a level market, facilitating ease of doing business in India and giving a boost to economic growth in the long run. With GST, tax evasion will decrease significantly, benefitting the country immensely. It will also usher in the use of technology in streamlining and automating taxation in a big way, which is the wave of the future.