India has a federal system of governance for its 29 states and seven union territories. This has created a complex web of taxes, with every state having its own set of taxes in addition to the ones collected by the central government. For businesses, it can seem more like a continent with different countries. Many advantages of a single, large market are lost, affecting the country’s economic growth too.
Finally, a stable central government with a strong mandate in the last election has been able to push legislation for GST through parliament – and July 1 is the date set for its rollout.
SaaS pioneer Zoho launched a “GST-ready” cloud-based product called Finance Plus to help businesses manage their taxes under the new system. Several fintech startups, like Razorpay and Cleartax, are helping with the shift to GST. A new startup, TaxGenie, chosen for the summer batch of Axilor’s accelerator in Bangalore, focuses purely on GST.
GST has many layers, and accounting is just one of them. It also impacts business strategy. For some businesses, it could open up the opportunity to have production centers in less developed and lower cost regions, as levies on inter-state movement of goods come down.
This is an excerpt from the article published on Tech In Asia. You can read the full article here