Exclusive: GST Bill and reaction from Indian Start-ups - WorldHRDiary

August 06, 2016

Exclusive: GST Bill and reaction from Indian Start-ups

WorldHRDiary.com Exclusive

The approval over the passing of the GST Bill by the Upper House of the Indian Parliament has created a lot of buzz among the business community as well as general public. This historic Goods & Services Tax (GST) bill  will lead the Indian taxation system more structured and unified. The business community is Gung Ho about the impact of the bill which will create positive business environment in the economy.


The Start-up community is also reacting positively to the GST Bill. The present government has been giving a special focus for the start-ups and created many platforms for uplifting the face of start-up ecosystem in the country.

WorldHRDiary.com speaks to some of India's leading start-ups about their take on GST Bill.

Let us find out what they have to say:
     

Vipin Kumar Yadav, Founder & CEO, Couponhaat.in

Vipin Kumar Yadav, Founder & CEO, Couponhaat.in
'Being India’s leading e-commerce platform to provide the best coupons and deals for online shoppers we welcome the historic Goods Services Tax (GST) bill which is expected to boost the e-commerce industry by enabling seamless cross-border transactions as it discourages tax evasion but subsumes all indirect levies. However, e-commerce companies might face higher compliance burden to make sure that they're not evading taxes but ‘One country, one tax’ would definitely pave the way for ease of doing business as well as for transforming the Indian e-commerce marketplace globally. This is really a historic occasion for the Indian economy after the liberalization in 1991.'

K Ganesh, Serial Entrepreneur, Partner- GrowthStory and Promoter of sector leaders such as BigBasket, Bluestone, FreshMenu, Housejoy, Homelane, Portea

K Ganesh, Serial Entrepreneur
'The passage of the Goods and Services Tax (GST) Bill in the Rajya Sabha is a progressive measure as it can facilitate seamless movement of goods across inter-state borders enabling better efficiency and spurring growth of the (eCommerce) sector. However, like every regulation, it needs to be implemented correctly, and should not make lives of eCommerce players even more complicated by burdening them with more administrative hassles. For the consumer, the price points of many products should come down or remain at the current levels (depending on the GST rates) as there will be free flow of credits since the total indirect tax cost embedded in the price (of products) is likely to decrease.'


R. Narayan, Founder and CEO, Power2SME

R. Narayan, Founder and CEO, Power2SME
“The GST tax reform can clearly be termed as a landmark and India's biggest tax reform since independence with the aim to streamline India’s fragmented tax system with a single levy. The passing of the GST bill is clearly good news for Indian businesses and will provide a huge fillip to the SME sector.

With a goal to create one single market, the GST bill will boost economic growth with some optimistic estimates suggesting an added 2 %. The GST regime will bring uniformity in the market creating a consolidated national-market-space. The distinction between goods and services will not apply, thereby, ensuring ease in tax compliances by ensuring one unified tax levy.  This will also help SMEs avail the complete tax incentives paid on procurement of all input goods as well as services from various sources such as import, inter-state purchases,  and local purchases and services like power, telephone etc. With the unified taxation system proposed, issues relating to regulatory uncertainty will be resolved and e-commerce shipment costs will reduce resulting in business growth for the organizations in this sector. In absence of multiple taxes such as; VAT, Excise, ST, CST, the SMEs will have a smoother and efficient inventory led model to operate, which will greatly enhance the ease of doing business. This tax system has been applied by most of the developed countries, as it helps protect businesses against multiple taxation.

The start-ups and SMEs have more reason to rejoice as this GST structure will provide higher exemptions to new business, businesses with turnover between Rs 10 and 50 lakh will be taxed at a lower rate. The GST will also ensure that there is reduction in logistics costs bringing great relief to manufacturing SME sector.”

Amit Grover, Co-founder and CEO - AHA Taxis

Amit Grover, Co-founder and CEO - AHA Taxis
Today, travel industry grapples with multiple levies like State Tax, Toll charges, MCD charges and various other local charges applied by states and center alike. We applaud Government's efforts to align all taxes under one roof for ease of handling across levels. GST has a potential to make India a single market and give a boost to the entire travel sector.

Asheer Kapoor, Managing Director, EPPS Infotech

Asheer Kapoor, Managing Director, EPPS Infotech

'We welcome the Goods and Services Tax Bill (GST) as our country will now turn into one unified market. With the implementation of GST, there will be numerous changes not only in the taxation, but also in the consumption of the minutest item. This is one of the biggest impacts on the IT structure in an organization both in terms of time & effort involved wherein they will have to train their employees, rework on their invoices and work in compliance with the new regulation. Companies across industries will now be on the lookout for an integrated ERP system that will support all their business requirements under GST regime. ERP vendors that offer a seamless transition to organizations in upgrading their existing system with GST will have a competitive edge in the market.

Also, as part of our endeavor we have initiated a discussion with the Goods and Services Tax Network (GSTN) to become a GST Suvidha provider and shall ensure that the GST returns are filed through EPPS.'

Arjunpreet Singh Sahni, Executive Director, Solitairian Group

Arjunpreet Singh Sahni, Executive Director, Solitairian Group

“By replacing a large number of indirect taxes by a single indirect tax regime across the country, Goods and Services Tax (GST) is all set to bring economic revolution in India by providing greater relief to the industries from the complex tax system and so the approval of GST Bill in Rajya Sabha is undoubtedly a step towards greater progress and growth that will surely lead to a considerable increase in the GDP of the country. Going forward, with the introduction of the new law, businesses will be motivated by the uniform tax structure. Among other industries, the real estate sector will also be immensely benefitted by the upcoming Act which will enable the real estate companies to do hassle free business across the country on the back of uniform indirect tax throughout the country on various construction materials including the steel and cement, costs of which become major deciding factor while finalizing the price of the finished products. However, it will largely depend on the final rate of GST that what actual benefits of the reduced tax burden may be passed on to the property buyers. The GST would have been more homebuyers' friendly if stamp duty had also been subsumed into it. Still, in a nutshell, GST is here to transform the growth prospects of the real estate sector by bringing more transparency and the long prevailing gloom of slow demand is just a matter of few days.”   

Nikhilesh Tiwari, Co-founder, Helical Insight,

Nikhilesh Tiwari, Co-founder, Helical Insight
'In my views, GST Bill which is touted as the biggest tax reformation in India is definitely beneficial for many but at the same time is disadvantageous for many sectors. Regardless of high expectations of people for GST, the implementations will be a grueling task for the government. It has its drawback which needs to be addressed. There are few things which are definitely a pain point for any startups like in the past service tax has increased from 12.36% to 14 and then 14.5 and finally now 15, which has put an adverse effect on the end-customers who had to bear the burden of increased costs. That's why they have to adapt cost cutting measures and restricting their outsourcing work. Now with the further increase in taxes will create even bigger problem in terms of business. Its true that a single tax structure will simplify the procedures, which are vary complicated in India, but at the same time any increase in taxes will impact startups in getting new businesses. Not to forget that indirect tax will increase to 18% which will result in lesser business since clients will have to shell out more money.  Though I am not totally against it, but I don't think it will help either and the cost of many services will go up only.'


Betrand Yella, Managing Director, IBEE Hosting

Betrand Yella, Managing Director, IBEE Hosting
"GST Bill is definitely one of the biggest tax reforms in India and is expected to change the face of business in India. It is creating a common market place for all sectors in India. There are few sectors which will be highly benefited but there are sectors which will suffer as well, specially unorganized sectors. For IT sector it is neutral as at one hand it will simply the procedures, reduces the multiple taxing structures and hence help in delivering our services to across India with same billing.  Whereas on other hand it will increases the expenditures for us as we work on single contract for all centers but now with every centre there will be separate billing procedure to be followed, so need lots of documentations, manpower etc. So overall its a good move but will take time to get adapted in India Market."


Kulpreet Kaur, Co-founder, Shop PirateCoupons

Kulpreet Kaur, Co-founder, Shop PirateCoupons
Finally the long awaited GST Bill has been passed in Rajya Sabha. Though it has to clear many more hurdles but it is definitely a great move by the government. For eCommerce sector, there are lots of opportunities and the best part is that now it will simplify the complicated tax structure in India. It will minimize the cascading effect of taxation issues. State to state taxing system used to effect the end users who used to end up paying more for any products. But now there will be transparency in the costs. The only issue will be the increase in the documentations work and administration costs, but i am sure eCommerce players will easily cope up with the same.



Arjun Pratap, Founder and CEO, EdGE Networks

Arjun Pratap, Founder and CEO, EdGE Networks
'Introduction of the GST will significantly boost markets in India. Elimination of multiple taxes, higher exemptions to new businesses will give a big thrust to the ‘Make in India’ campaign creating more entrepreneurs in the country.'

Navneet Malhotra, Co-founder and Chief of Alliances, Renomania.com

Navneet Malhotra, Co-founder and Chief of Alliances, Renomania.com
'The GST Bill is welcomed and a much awaited development. What I am concerned about is what if GSF leads to a higher tax incidence for the start-ups in the service sector. Right now we are paying 15% service tax and if the GST is higher, it will add a fresh burden, especially to young start-ups. I would urge the government to be mindful of that.'

Vishwavijay Singh, Co-Founder, Salebhai.com

Vishwavijay Singh, Co-Founder, Salebhai.com
'The existing indirect tax laws including VAT/CST, excise, and service taxes have not been able to accommodate the evolving e-commerce marketplace business model. The sector faces a tough time categorising offerings into goods or services to charge VAT/CST or service tax. It also has to grapple with problems related to permits and statutory forms for inter-state movement of goods. Few state governments have come up with additional taxes for e-commerce, which is burdening both customers and companies. There is basically a lack of clarity on e-commerce transactions under existing tax legislations. Once the GST Bill is passed, there will be a national-level GST which will be easy to follow. We are eagerly looking forward to it to tide over the current problems.'

Shrutam Vijay Desai, Co-Founder of OnlyMobile by Bhatia's

Shrutam Vijay Desai, Co-Founder of OnlyMobile by Bhatia's
'Implementation of GST is one of the biggest reforms what government is trying to bring in today. This will definitely help all stake holders of our nation to realize more transparency and more trade friendly environment will be there. GST is particular very important for E-Commerce players as the expansion will become easier for them as now they will not require to struggle with different taxation in different states. However, since we are moving into multi-layered GST structure – it is very important for the government to ensure near to perfect implementation and all guidelines should be introduced before going live. I also anticipate that many stand-alone or geographically restricted retailers will kick in their expansion plans and particularly more active with their e-commerce strategies. GST will provide wings to many business ideas to fly. As far as mobile industry is concerned, I am expecting Online Exclusive models prices to go up as they are operating via low VAT areas right now but removal of Octroi, LGBT etc. should help many handset companies to improve the bottom line – which is much needed relief. In indirect way, GST will arrest the predatory pricing of E-Commerce market places. However, Central Government and State Government both should ensure that they do not impose entry tax like duties either on E-Commerce or Mobile Phones – such addition will kill the purpose of this fastest growing industry. It’s great to see that finally State Governments have extended their co-operation to Central Government towards making our country more open and more friendly for trade activities.'

Sakshi Vij, Founder & CEO, Mylescars.com

Sakshi Vij, Founder & CEO, Mylescars.com
"The GST has been long awaited by the Indian companies especially companies like us who are young and trying to makes customer focussed products. It is particularly important that the GST comes into play soon because it simplifies the taxation system.
Since we are part of the services sector, we also await announcements on the tax rate that will be applicable on services under the GST. We are hoping that the singular tax will also reduce the burden of taxation on services like ours."


Founder, TripXOXO, Heena J Akhtar

Founder, TripXOXO, Heena J Akhtar
'GST will have a long term benefit for the travel industry by simplifying compliance procedures and reducing multiple taxes. However, the impact on costs is not clear as yet, because it is not evident whether input credits will be available, and may result in higher costs.'

Gaurav Jain, Company Secretary and Founder, Lexcomply.com


Gaurav Jain, Company Secretary and Founder Lexcomply.com
“GST is an effective step to be at par with global practices provided its rate and associated compliance are kept reasonable. The system will change from the current production-based taxation to being consumption-based. Along with bringing about a semblance of uniformity in taxes across states, this is expected to increase efficiency and compliance in the system.


Dhiraj Agarwal, Co-Founder, Campus Sutra

Dhiraj Agarwal, Co-Founder, Campus Sutra
'From the point of e-commerce there are two points in which we are awaiting clarity. First being mechanics of GST across each state as online orders are not location dependent. Secondly, as a fashion e- commerce player we are eagerly waiting to see whether apparel continues to be in the necessity category and hence attracts a lower GST than the standard rate.'

Bhushan Karn, Co-founder, Express Bike Works

Bhushan Karn, Co-founder, Express Bike Works
'GST is a massive boost towards indirect taxation, especially for start-ups in manufacturing sector. Currently, our sector pays 25% indirect taxes which shall reduce to 18-20% with the implementation of GST. While, it needs to be seen what the ground reality is, and how simplified does it get to do business. Overall, as all signs point towards a positive direction, we are pretty confident that this government is committed to make this reform count.'

Alok Agarwal, Co-founder and Business Head, Teesort

Alok Agarwal, Co-founder and Business Head, Teesort
'Clearance of GST bill after 10 years is a much awaited and a progressive move by the Parliament. It’s definitely a feel good factor since it’s been hanging out for a long time. We at Teesort are happy to see that there is a common consensus emerging in the parliament.

Introduction of GST will immensely support the creation a single unified market across India which will help in building robust supply chain and logistics network for E-commerce sector. It will also boost the make in India campaign thereby leading to more employment opportunities & will attract more FDI investment in country.

That said, the real value will come in when GST is eventually put into effect which may take a couple of months.'


Ginny Kohli, Founder and CEO, Wedwise

Ginny Kohli, Founder and CEO, Wedwise
‘GST move in this age of startups is a vital move. Any change in the Tax structure affects all business from top to bottom. For startups it's no different.  The positive outcome being that startups will not have to deal with various complexities of different tax structures Levied at different stages with GST. Therefore making businesses more tax compliant. However, for struggling or unstable startups, the change in taxes can burden them financially. New reforms, new structures, new policies bring costs with which might not be great news for unstable startups.’


Yuvraj Aman Singh, Founder and CEO, Rocking Deals

Yuvraj Aman Singh, Founder and CEO, Rocking Deals
‘It’s a good sign as the prices would be uniform for the whole country instead of the tax havens from where most of the e-commerce players operate.’ 

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