It’s been almost a year since India rolled out the goods and services tax (GST) amid intense intense debate over its impact on the economy. As the country gears up to mark the first anniversary of one of its biggest tax reforms since Independence, a Deloitte India survey shows that 77% Chief Financial Officers (CFOs) believe that tax has had a positive effect on their overall businesses.
Deloitte’s survey of 250 CFOs notes that GST has not only made the overall tax filing process simpler for them but also benefited the revenue and supply chain. Additionally, 58% of the CFOs also saw an improvement in the ease of doing business, one of the goals of the new tax regime.
The top three challenges for CFOs in the past one year since the implementation of GST were increased regulatory compliance, technology upgradation, and increased working capital, says the survey. It is based on responses of listed and unlisted companies from both the private sector and PSUs as well as Indian and multinational companies.
“Introduction of GST necessitated a relook at the existing business models by CFOs," said Porus Doctor, partner, Deloitte India. “ It had far-reaching implications on business functions, where the impact was on taxation, finance, legal, IT systems and supply chain. Overall, GST’s value proposition has been appreciated by CFOs,” he added.
The CFOs were also optimistic about the short- and medium-term economic outlook. “While two-third of the respondents were positive about economic prospects in the near term, 94% were optimistic over the next two-three years”, says the survey.
GST replaced the complex web of indirect taxes at both the central and state level with a single tax regime, impacting not only the tax functions of organisations but also the overall functioning of business.
