NAGPUR: If Chartered Accountants (CAs) are to be believed, the city will be hugely benefited by the Goods and Services Tax (GST) regime. "To avoid unnecessary logistics costs, companies will be bound to set up manufacturing plants around the city because of its central location," said chartered accountant Aniruddha Ghude. "Earlier, plants were set up at places where the companies had to pay less taxes," he pointed out.

Ghude was speaking on Saturday at the ’In-Circle meet up’ on the topic ’Life of start-ups and businesses after GST’, organized by Lemon Ideas. The open discussion platform included two CAs — Ghude and Aman Jain, Lemon Ideas director Deepak Menaria, while the others were entrepreneurs and students.

GST is an upcoming system of taxation in India which will merge many individually applied taxes into a single tax. It is likely to come into force from July.

Agreeing with Ghude, Jain said, "With GST, every process will become centralized and will speak of uniformity, breaking the state boundaries. There will be no multiple VAT for states. One registration under GST will be applicable throughout the country."

Jain said, "For someone who wants to import, Nagpur will be the ideal location to cover the entire country. There will a straight 20% reduction in logistics cost and 5% profit margin."

He added, "With the Cargo Hub and Metro Rail being set up in the city, this will all be taken to a new level."

Entrepreneur Amarjyot Singh said, "The uniformity that’s coming with GST was a much needed thing. It will definitely bring ease in doing business. GST will unite India removing restrictions on inter-state movement of goods."

Clearing the concept of candidates, Ghude said, "An organization which has a turnover above Rs20 lakh will have to register for GST and pay the tax." Shedding light on the other side of the story, Menaria said, "However, if post registration, the organization’s turnover comes down below Rs20 lakh, the organization will still have to pay GST."

Candidates also had doubts if the proposed GST could safeguard MRP, since these days various companies print huge MRP on product and then give huge discounts, misleading the consumers.

Commenting on it, Jain said, "The proposed GST will be calculated on the product’s MRP. If companies need to pay tax on MRP, they may write fair price."

Ghude furthe said, "There will be no major benefits for start-ups. However, GST will give a boost to e-commerce industry as a whole. Considering that a major chunk of start-ups deal in e-commerce, starts-up will be benefited."

Currently, Maharashtra doesn’t charge VAT on medicines and equipment related to cancer and kidney diseases. State finance minister Sudhir Mungantiwar had submitted a proposal to the central government to exempt these set of medicines under GST regime. Talking to TOI, Ghude commented, "It’s a great proposal. But if the centre agrees to give the exemption to only Maharashtra, it will lose its core agenda of unifying the country through GST. So, if at all the medicines have to be exempted from GST, it should be uniform for every state."

 15 May 2017, 12:35 PM