GST, labeled as one of the foremost indirect tax reforms in the country since Independence, has inched one step closer to becoming a reality from 1st Apr'17. While the mechanism of implementation is still being fine-tuned, there is an equivocal agreement on its positive ramification across the board, especially in the manufacturing sector.
Indian manufacturing is a large sector ($300B) accounting for 17% of the country's GDP and is a very complex domain from an indirect taxation perspective. Today, the sector is plagued with myriads of taxations like SVAT, CST, Excise, CENVAT etc., and GST is going to be a welcome change with significant improvement on ease of doing business.
Rahul added: "We believe that GST shall fundamentally redefine the B2B commerce in the country, which in the past has been plagued by the multitude of state and central compliances. Moglix aims to enable a large section of manufacturing sector to smoothly migrate to the new regime. We dream of supply chain where we will achieve 100% reconciliation of goods, services, Information, payments and taxation, with highest standards of quality, cost and delivery".
GST shall impact manufacturers in multiple ways; first and foremost, it creates a single/central technology infrastructure for indirect taxation for manufacturers. Second, it enables a 100% reconciliation of the tax flow across the entire value chain in a time bound manner.
Third, the tax ERP of every organization will now be maintained centrally inside the GSTN system. These changes shall enable India to get-rid of tax leakages in any shape or form in the future and give rise to a true white-economy.
Atul Jain, VP Procurement, Lumax Group (which has INR 2,500+ CR in revenues) said "Dealing with thousands of vendors, their invoices, payments, logistics used to be a challenge for us as it called for significant management bandwidth.
"We started using business.moglix a few months back and it has turned out to be a fresh change for procurement, logistics, finance and IT managers to address all these issues. To our delight, the platform also takes care of GST compliance for our buyers/suppliers which is going to be a massive exercise for enterprises running in offline mode".
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