<p>The long term awaited GST is now rolled out in almost all the states in India. It got into effect on 30 June/1 July 2017. As called &ldquo;good and simple tax&rdquo; by the rollers, this is indeed a major tax reform in Indian economy for the government as well as the citizens. GST has been presented in the parliament in form of an amendment bill several times but failed to pass. Now finally it has passed and hit the markets.</p>

<h2><strong>What is GST?</strong></h2>

<p>GST stands for goods and services tax passed by the 101st amendment bill, 2017 on July 1st. it is a form of indirect tax which replaces all other indirect taxes at one go. It is one uniform tax rate system in place for different time consuming and complex taxes like VAT, service tax and so on. There were many sectors in India including the IT industry which had to go through several tax formalities but after the implementation of GST, there is only one tax rate system applied on every good and service. The main purpose of GST is to rationalize the current tax system into a stable tax regime which may provide growth in tax collection and reduction in burden of taxes on the taxpayer.</p>

<h1><strong>Impacts GST has on the IT industry</strong></h1>

<p>Some provisions of the GST may undermine the competing power of IT industry in India. It has got the potential to spark some disputes among the services, software and litigation. Complex billing procedures and invoice requirements due to supply and valuation provisions of this bill could further intricate the taxation for IT companies. There are some other factors which may be considered before coming on to a conclusion</p>
<p><strong>1. The tax rate system</strong>- the current <a href="https://www.logicspice.com/industries/">IT industry</a> which include the mobile app development services, cloud computing services, web development services, software services come under the 15% tax rate. The standard rate expected to come up after all the standardized formalities will be 17%, which may make the price rise in the IT industry especially for those customers who do not refer the tax input credit. But on the other hand, the sale of packaged software initiates tax systems of VAT and other service tax which may go up to 25-28% in total. This is usually paid by the customer but after implementation of GST, this tax rate is sure to come down to 18-25% which is a relief for the people on whom the burden falls.</p>
<p><strong>2. E-commerce- for e-commerce -</strong> Clients and companies, GST is to increase their administrative costs. Small sellers will face cash flow issues and may claim for refunds on the tax paid on inputs. But the long term effects of GST will be quite interesting, it will initiate the rapid growth of these e-commerce industries.</p>
<p><strong>3. Logistics-</strong> The logistics center such as computer mechanism services, web development, and mobile app development, <a href="https://www.logicspice.com/android-app-development/">Android app development</a>, iOS app development is fairly growing in India. It will not have much problem while facing the details of GST because of their innovation. It will cost them less and make their working more transparent to the government. The telephone sector prices are expected to go down after implementation of GST. Manufacturers may save cost through efficiency in management of their storage and inventory. The state specifications and transfer stocks may also help to save up some logistic costs. There are different taxes levied on the automobile industry today which may be subsumed by GST. The future of this industry looks rosy due to decrease in procedures and taxes number that had to be paid before.</p>
<p>Though every policy has its shortcoming, GST is one of those few policies that may have some short term shortcomings but will indeed prove fruitful in the long run. So, if you are looking to develop something according to the latest GST regime, you should contact LogicSpice. Our proficient team is not only pro at providing optimal solutions, we are also providing proper assistance in accordance to the GST policies.</p>
