Those who watch Game of Thrones (GOT), must always be eager to see what winter brings, as for last 6 seasons we are listening that winter is coming, in the same manner, people have been saying that GST is coming for years now… But now both are coming and for sure, while we have to wait for the final season of GOT to check what challenges winter brings, we are already starting to see what GST is bringing on the table for each one of us.
But the million-dollar question in both the cases is that are we ready for winter, what do we need to get ready for winters. Most of the businesses now need to adapt quickly to GST regime. What they see today is just a glimpse of the storm we are about to face, it will change the entire game, now those who are able to adapt quickly will take the advantage of GST and rest will just be followers and for them, GST may not bring the real good news.
GST will not only impact the tax scenario for business, but it will also impact the way we do business today. As I am writing, the GST Council is in process of finalizing the tax rates, industry-specific scenarios & challenges. Business will have to look into following areas to assess what they are required to change:
- Tax impact: For sure, the tax impact on business is the most critical aspects, one needs to understand what are the implications of GST vs their existing indirect tax scenarios, how will they migrate or transition into new tax regime, what will happen to credits in their books on the day of GST implementation.
- Business processes: With the change in tax scenario, an organization with matured processes & thought will plan for optimization of existing business processes.
- Some of the business processes which were designed to save tax in current indirect tax regime would now be re-designed and some may go away.
- The documentation needs to be revisited, the roles & responsibilities to be modified.
- Some of the indirect taxes will now be decentralized.
- Planning of indirect tax similar to direct taxes will become need of business in coming days
- Current MIS or reporting structures will have to accommodate the GST thought.
- MIS structures will have to think through.
- Technology: The impact of GST on technology is opaque and hidden, with the process of change in tax structure and business processes the technology is bound to change, but the business has to assess whether existing technology is advanced or flexible enough to adapt to GST changes, else they might have to take a call to go for re-implementation.
- People: like any season of GOT, it’s the characters who play the vital role, for GST as well the organizations would be required to train and upgrade the skills of their business teams to optimize the benefits of GST. There would be multiple levels of GST training required for the different level of people in the company.
Now looking at the above one can say that probably winter in GOT will be less challenging than GST for businesses. As Darwin quoted, ‘’ It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.’’ Hence in both GST and GOT ones who plan better and are flexible enough will survive.