Categories: GST (Goods and Services Tax)

Banks are not ready for GST rollout from July 1, 2017

With less than a month left for the rollout of the GST, the Indian Banks’ Association (IBA) has informed a Parliamentary panel that lenders are not yet geared up for implementation of the new indirect tax regime.
“Since the GST will be operational from July 1, 2017, banks have to make a lot of changes in their systems and other procedures.
The preparedness of all banks for implementation of GST on July 1, 2017, is a question mark,” the IBA has conveyed to the Parliamentary Standing Committee on Finance.
IBA further said that several services by banks to customers are centralized while several others are localized. Banks will have to make changes in the existing infrastructure which would be a huge challenge for the banks.

The Indian Banks’ Association (IBA) has notified a Parliamentary panel that lenders are not yet prepared for the implementation of the new indirect tax regime, which is set to begin in less than a month.
“Since the GST will go into effect on July 1, 2017, banks will need to make numerous modifications to their systems and procedures. The readiness of all banks for the July 1, 2017 adoption of GST is a question mark “The IBA has informed the House of Commons Standing Committee on Finance.
According to the IBA, certain bank services to consumers are centralised, while others are localised. Changes to existing infrastructure will be required, which will be a big task for banks.
IBA had taken up the case for central registration, the association added.
Touted as the biggest taxation reform since independence, the GST will subsume central excise, service tax, VAT, and other local levies to create a uniform market.
The new indirect sales tax is expected to boost the GDP growth by about 2 percentage points and check tax evasion.
Powerful GST Council, comprising a representative of Centre and States, has recommended a four-tier tax structure — 5, 12, 18, and 28 percent for goods and services.
On top of the highest slab, a cess will be imposed on luxury and demerit goods to compensate the states for revenue loss in the first five years of GST implementation.

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Tags: four-tier tax structureIndian Banks' Association (IBA)new indirect tax regime.Parliamentary Standing Committee on Finance

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