The Indian information technology industry, even with its limited exposure to the India market, had some impact from the goods and services tax in the past year.
According to National Association of Software and Services Companies, the focus is now on pushing for centralised registration, issues around refunds and the initial issue of tax collected at source, which has been a problem for e-commerce firms since the new tax regime kicked in.
“The focus is on centralised registration, (to prevent) a company from registering in multiple states. We are in exports so we don’t really do business that way,” said Sangeeta Gupta, Senior Vice President at NASSCOM.
The GST regime required companies to apply for multiple registrations in every state of operation.
The GST Council has also been looking at this issue for big service providers, considering changes to input tax credit regime to allow credit for tax paid on rent-a-cab services, which will have an impact on IT and business process management companies.
The longest standing issue that NASSCOM has been taking up with the GST Council is that of tax collected at source.
As explained here, TCS affects electronic commerce and electronic commerce operators, which the Model GST Law defines as under electronic commerce as sales of goods and/or services, including digital products over a digital or electronic network.
It also applies to electronic commerce operator, who is defined as any person who owns, operates, or manages a digital or electronic facility or platform for electronic commerce.
When the initial GST Bill was passed, the provision of TCS for transactions on third-party e-commerce marketplace was called “discriminatory” by NASSCOM, which could “potentially render such e-commerce marketplace unviable”.
This week, the revenue department had decided to keep GST provisions related to TCS in abeyance for another three months till September-end.
“We need a solution that is long-term,” said Gupta. “But the GST Council has been very accommodating in hearing our issues out and working with industry,” she added.
For the large IT service providers, Gupta said GST is at best a compliance issue.
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