INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES- Onboarding GST: One Nation, One Tax
-
Upload
bmr-advisors -
Category
Economy & Finance
-
view
53 -
download
2
Transcript of INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES- Onboarding GST: One Nation, One Tax
12 Years Of Excellence
Onboarding GST: One Nation, One Tax
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
Volume 6 November 2016
Developed & Researched By: Dipti Chawla, Payal Tuli, Mamatha Anand
Contributions By: Anshul Aggarwal, Harkishan Bhatia, Kaustuv Sen, Madhava Yathigiri, Mahesh Jaising, Nidhi Lukose, Poonam Harjani, Prashanth Bhat, Sarabjeet Singh, Saurabh Kanchan
Acknowledgements: Abhirath Bhat, Ankush Surana, Jyoti Bhowmick, Ketan Lohia, Netal M, Siddharth Tandon, Sonam Bhandari
Edited By: Mukesh Butani
Section A: Onboarding GST – One Nation, One Tax | p2
Section B: Macroeconomic Trends & Prospects | p24
Section C: Key Sector Updates | p26
Section D: BMR Thought Leadership | p38
References | p43
About BMR | p44
CONTENTS
Prologue
The streamlined and focused manner with
which the government has sought to
implement the nationwide goods and
service tax (GST) has never been
witnessed in India before. The approach of
the government seems precise and the
pace at which hurdles were cleared is
worthy of admiration. In a short span since
the passing of the GST legislation in Rajya
Sabha, several milestones crucial for
introduction of GST in India have been
achieved, including passage of the
Constitutional Amendment Bill by the
Parliament, setting up of the GST Council
and release of draft legislations. It is
remarkable to note how consensus was
achieved between the Government and
other political parties through constructive
dialogue on various nuances of GST.
Advancing the winter session, yet another
tell-tale sign, magnifies the government's
commitment towards speedy rollout of the
new regime.
Expected to bring greater tax parity across
the country, GST - a unified indirect tax,
would subsume significant number of
existing central and state levies. The
landmark reform seeks to harmonise
India's indirect tax regime, paving way for
realising the goal of 'One Nation, One Tax'.
As per the extant law, different activities
trigger different taxes - manufacturing
attracts excise, sale of goods attracts
value added tax (VAT) or central sales tax
(CST) and provision of services attracts
service tax. Under the proposed regime,
there would be just one single activity of
'supply' triggering the levy of GST. Central
GST (CGST) and State GST (SGST) would
apply together on any intra state supply
and an integrated GST (IGST) would apply
on inter-state supplies and imports into the
country, apportioned between the center
and the states at the backend. Save for a
few exceptions such as liquor and
specified petroleum products, GST would
apply on almost all goods and services.
Seeking to act as a panacea to the myriad
tax issues plaguing the industry (across
sectors), introduction of GST is likely to
enable businesses to focus on commercial
factors for making decisions and not tax
factors, as has been seen in the past.
Focused towards implementation, the
Government has adopted a collaborative
approach with open channels of
communication with all stakeholders.
Release of draft Model GST Law in June
ONBOARDING GST: ONE NATION, ONE TAX
Prologue
2
SECTION A
2016, release of subordinate
legislations for public feedback and
initiation of public awareness
campaigns are manifestations of the
fact.
With less than five months to go before
the current deadline of April 1, 2017
and the Government working
vigorously towards implementation of
GST, it is imperative that the
businesses get cognizant as to how
GST would impact each aspect of their
companies from an operational,
infrastructural and financial perspective
and brace themselves for this
gargantuan tax reform never witnessed
before in independent India.
The following sections of this quarterly
report presents an in-depth analysis of
developments on GST implementation
roadmap, insights on industry's
preparedness for the new regime and
makes assessment of implication on
key sectors of the economy (Section
A), followed by a review of
macroeconomic trends & prospects for
the Indian economy (Section B), key
sector updates (Section C), and an
exclusive Business Today - BMR
Advisors Survey on GST (Section D).
I hope you find the report informative
and useful and look forward to your
continued support.
Rajeev Dimri
“Our Government is committed to tax reforms,
in general, and implementing GST, in
particular, and I am confident that we shall be
able to get the constitutional amendment,
which shall pave the way for a landmark tax
reform”.- June 9, 2016, FM Arun Jaitley's foreword to 'Tax Dispute Resolution: Challenges and
Opportunities for India' – An ICRIER and BMR Advisors initiative, published by LexisNexis
3
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
GST will, at a basic level, affect the tax
positions and compliance requirements
for businesses. But more importantly,
GST would raise fundamental questions
on existing operating structures, legal
entity structures and transaction
structures which apart from various
commercial reasons, have been
configured to align with the existing
indirect tax framework and requirements.
GST - SECTORAL IMPACT ASSESSMENT
Section A: Onboarding GST – One Nation, One Tax
4
By Saurabh Kanchan
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
Not only would GST impact the
various sectors of the economy
such as automobiles, FMCG,
defence, banking or information
technology, the level and degree
of impact is different across
sectors. A lot also depends on the
product or service offerings,
activity profile such as
manufacturing, services or trading
and geographical spread of the
businesses, their vendor and
customer base across States. For
instance, tax rate changes for
various categories of products
and services would directly
impact pricing and profitability of
businesses. Persistent issues
around double taxation of
transactions such as software,
intellectual property and works
contracts may get addressed.
While product companies have for
a long time been accustomed to
dealing with State boundaries
from a VAT perspective, GST
marks a fundamental shift for the
tax environment of service
companies. Taxation of services
under GST would be
decentralized at the State level.
This will impact the manner in
which service companies are
geographically oriented in terms
of customer services, contracting
structures with customers and
vendors, internal IT systems
alignment, tax team resources
and training, interface with tax
authorities and compliance
requirements.
Thus, as we go through the GST
repercussions on select sectors of
the economy in the following parts
of this section, it is useful to keep
in mind that GST would seep
through the several layers of
economic transactions
undertaken by businesses and the
new regime's effect would be all
pervasive.
The GST is expectedto impact
businessesacross
sectors.
5
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
SECTION B: SECTORAL UPDATES
166
Currently riddled with a plethora of taxes, this
sector, has much to look forward as the new
regime is set to turn the face of entire indirect
taxation policy. Some significant impacts of
the new regime on the sector are illustrated
below:
Ÿ Simpler and more certain tax environment
with elimination of some existing concepts
viz deemed manufacture, valuation on MRP
basis, dual taxation of goods/ services, etc.
Ÿ Streamlined movement of goods across
states with elimination of entry tax, CST and
possible discontinuation or simplification of
various statutory filings.
Ÿ Reduction in overall indirect tax incidence
from present 25-30 percent for most
manufactured goods to a standard rate of
around 18 per cent. As per the latest news
reports on GST Council discussions, it
appears that luxury vehicles may face a
higher rate of around 26 percent. Further,
an additional cess is being proposed on
the luxury segment. The overall tax impact
for luxury cars would, hence, depend
heavily on the rate and creditability of such
cess.
Ÿ Broadening of credit base with thinner list
of items covered under the restricted list.
However, credit restrictions on motor
vehicles may be continued under the new
law, except when used for specified
services.
Ÿ Credit of excise duty paid by dealers on the
inventory lying in stock at the time of
implementation is likely to be restricted
leading to a possible (short term) surge in
pricing of all manufactured goods.
Ÿ Questions concerning operational
efficiency of existing tax incentives policies
of State Governments with change in
principle of taxation policy from origin
based to destination based remain open.
Pursuant to the recent GST Council
discussions, it has been announced that
benefits being provided under such
policies will be preserved by way of refunds
from annual Centre and State budget.
However, since the State Government will
no longer tax supplies originating from its
State, it remains to be seen whether the
economic benefit which is presently
available to companies under such policies
will continue to remain the same under GST
or not.
Ÿ Taxation of stock transfers and trigger of tax
liability upon receipt of advance would
advance existing point of taxation for
goods, impacting working capital
requirements.
Ÿ Automobile industry is presently facing
litigation on inclusion of joint advertisement,
after sales service, pre-delivery inspection
charges etc. in transaction value for
payment of excise duty. These issues will
continue in light of the valuation rules.
Further, arriving at a fair value in case of
related party transactions, especially for
services is a new compliance requirement.
Ÿ Input credit availability under the GST
regime is dependent on the seller having
paid the tax to the account of government,
this is likely to pose a compliance
challenge for the sector.
Considering the complex indirect tax
structure as it exists today, GST is expected
to be a welcome step for the automobile
sector. Apart from tax simplification, ample
opportunities for business restructuring,
diversification and expansion would open up.
AutomobilesBy Payal Tuli and Poonam Harjani
Section A: Onboarding GST – One Nation, One Tax
GST is likely to usher positive changes for
the sector, presently riddled with issues of
double taxation, multiple tax levies, credit
restrictions etc. The approach is to have
fewer exemptions and ensure a moderate
GST rate overall, as exemptions distort the
regime. However, to ensure the sector is not
burdened with heavy tax costs resulting in
higher capital outlay, certain presently
available incentives and exemptions must be
continued. Key implications to the sector are
enumerated below:
Ÿ Subsumation of various taxes under GST
reduces complexities by eliminating levies
on various legs of same transaction and
the need to determine taxable event for
each such levy. This would ensure
smoother movement of goods across
states with lesser trade barriers.
Ÿ Free flow of credit across value chain
reduces tax costs thereby reducing the
cascading effect. (Excise duty, CST, entry
tax etc., will no longer be cost in the
system for project owners and
contractors, thereby reducing the project
cost).
Ÿ An overall tax on actual base value
without need to split the contract value
between goods and services (as is
required under the current regime which
leads to 110-145 per cent taxable base for
levy of VAT and Service Tax).
Ÿ New regime will reduce litigation for
contractors with regard to taxation of
interstate sales, in-transit sales and sale in
the course of import.
Ÿ Credit restrictions on GST paid on
construction activities (on the civil side)
would continue leading to increase in
costs of construction on account of higher
GST rates.
Ÿ Non-continuation of incentives under the
renewable energy sector will pose
challenges since it leads to increase in
cost of setting up and operation of
projects, possibly resulting in increase in
tariffs. Non-subsumation of electricity duty
under GST leads to cascading effect of
taxes, on account of non-creditability of
electricity duty paid.
Ÿ Potential cost increase for port and airport
projects due to increase in overall tax
costs as compared to present regime.
Infrastructure sector is a major building block
for development of the economy.
Government should endeavour to address
the concerns before GST implementation to
ensure robust growth of the sector, which is
crucial to sustain high growth in the long
term.
GST is likely to usher in positive changes for the infrastructure sector.
InfrastructureBy Prashanth Bhat and Nidhi Lukose
7
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
8
Being a unified indirect tax regime, GST will
eliminate multiple taxable events and
compliances bringing significant relief to the
sector grappling with myriad indirect tax
issues. Differing VAT practices in states with
respect to taxability, rates, valuation, etc.
have been road blocks. With free flow of
credit across the value chain, tax costs will
reduce, thereby reducing the cascading
effect of taxes. As a result, excise duty, CST,
entry tax etc., will no longer be cost in the
system for developers and contractors,
thereby reducing the construction cost.
Specific classification of construction/ works
contract activities as 'service' ensures levy of
tax is on actual base value without the need
to split contract value between goods and
services (as is required in the current regime
which leads to 110-145 per cent taxable
base for levy of VAT and service tax).
While at a macro level GST should bring
uniformity across States, resulting in fewer
litigations, aspects that need attention
include:
Ÿ While transfer of title in immovable property
has been specifically excluded from the
definition of ‘service’ under the current
regime, there is no such exclusion from the
definition of 'service' under GST. While this
may be an oversight, the exhaustive
definition of service does open up a debate
on taxability of various transaction in real
estate sector which do not transfer the title
but enjoyment of the property.
Ÿ Inclusion of free supplies of goods by
developers to contractors in transaction
value shall lead to dual tax cost in the
hands of developers, since developers
shall not be eligible for credits on such
procurement.
Ÿ Credit restrictions on commercial projects
continues under GST regime as well, which
may lead to increase in construction costs
on account of higher GST rates.
Ÿ Debate on taxability of development rights,
land aggregation transactions, secondary
market transfers, assignment of purchasing
rights in immovable property etc., are not
specifically addressed and are likely to
continue.
Real EstateBy Prashanth Bhat and Nidhi Lukose
Section A: Onboarding GST – One Nation, One Tax
1Joint Development Agreement
Ÿ There is no option of paying GST under the composition scheme for developers selling units
before completion. Sale of units are likely to attract GST rates as applicable to services, after
any abatements for land deductions that may be prescribed. This may have negative impact
on the mindset of home buyers, and could be perceived as inflationary given the full GST rate
on face of the invoice.
Ÿ Model Laws are silent on zero rating of supplies of goods and services to SEZ developers
and units. In fact, there is a possibility that developers may not get the benefit of refunds
given that the draft refund rules in their current form provide refunds for exporters i.e., units.
Hence, for developers it is a clear case of increased cost if benefits do not continue and
SEZs losing their sheen.
It is critical that the above concerns are addressed before the final GST laws are released for
the benefit of the sector and also home buyers.
Being a unified indirect tax regime,
GST will eliminate multiple taxable events and
compliances bringing significant relief to the sector
grappling with myriad indirect tax issues.
9
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
10
With India witnessing a retail and e-
commerce revolution due to rise in income
levels, urbanisation, changing customer
preferences etc., the sector is keenly
observing implementation of GST. E-
commerce is increasingly emerging as the
preferred mode of consummating retail
commercial transactions. Since the sector is
currently at a nascent stage, tax environment
around it is also still evolving. With absence
of clear legislative provisions, multiple
taxation authorities have been adopting
diverse tax treatments in order to apply
varied transaction taxes on e-commerce
transactions. This has left the sector
grappling with numerous indirect tax
controversies off-late.
Model GST Law has ushered a ray of hope
for the sectors. A special dedicated chapter
on e-commerce highlights the positive
government intent to afford certainty around
taxation for the sector under the new regime.
Thus, it is being envisioned that GST will lead
to an all India alignment of the tax treatment
with an aim to ensure a uniform indirect tax
treatment for this sector.
The implications of GST for this sector are
enumerated in brief below:
Ÿ Under the new regime a transaction will be
taxed by the consumption state thereby
hopefully mitigating situations of competing
claims by two or more States to levy tax on
the same transaction
Ÿ Elimination of entry tax would ensure ease
in movement of goods across states and
removal of trade barriers
Ÿ New GST regime will enhance the
availability of credit of taxes to traders
(including e-tailers) since they will be
entitled to input tax credits of various
distribution related input services. Further,
input service distributor facility, which is
presently not available to traders, would
enable better credit utlilisation.
Ÿ GST will also offer an opportunity for re-
creating supply chain modalities based on
commercial considerations rather than
taxation mechanism. Under the present
system, every company in the retail sector
plans its procurements and locations of its
warehouses and branches to optimise on
credits. Under GST, such tax
considerations are likely to go away.
Ÿ Following the GST Council's first meeting,
minimum exemption threshold has been
Retail and e-commerceBy Poonam Harjani
Section A: Onboarding GST – One Nation, One Tax
GST expected to address the ambiguities surrounding this sector.
affixed at INR 2 mn. This is a welcome step
for small retailers as compared to the
current VAT threshold limits, which are very
low in most States.
Ÿ Further, the Council has proposed that
assessees with annual turnover of less than
INR 15 mn are likely to be assessed by
State authorities only. This will save small
players from the hassle of being under the
administrative control of multiple tax
authorities under GST.
Ÿ GST mostly focusses on transparency with
respect to tax payments, credits etc. and
as a consequence requires more robust
and full proof compliance support from
assessees. The industry thus appears to be
a bit apprehensive of the magnified
compliance requirements in terms of
maintenance of records, returns,
departmental audits etc. Increased
compliances especially for e-commerce
players on account of collection of tax at
source (TCS) for sales and maintenance of
vendor records is an added compliance
burden.
Ÿ Model GST law requires more robust
transition provisions. Presently, the Law is
silent on transition of credits pertaining to
excisable stock lying with traders/dealers.
Ÿ Providing incentives, freebies and
discounts is a part and parcel of the trade.
Possible GST exposure on free supplies,
such as, free samples, freebies offered
under promotional schemes, etc. is likely to
increase working capital outflow.
Ÿ Since the GST law is currently evolving,
clarity on whether the platform operators
with no Indian business presence require
registration in India is awaited.
Model Law seeks to bring comfort to this
sector with the law makers aiming to define
clear taxation principles. As the Law would
evolve it is expected that the ambiguities
surrounding the sector would be suitably
addressed.
11
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
12
It is expected that GST would incrementally
impact banking and financial services
industry, relative to the manufacturing and
other services sector. Enumerated below are
some potential areas of impact:
Ÿ Level of compliances will see dramatic
uptick under GST. An entity operating on a
pan-India basis was hitherto filing 2 returns
per annum. Under the GST regime, it would
need to file 3 returns per month, in 29
States, over 12 months, in addition to
annual tax and information returns; totalling
1046 returns. In addition, the entity would
be subject to assessment in all 29 states.
The banking industry is currently making
representations to the Government on this.
Ÿ This sector is subject to a different set of
rules to determine the 'place of supply'
rules. However, the term 'banking and other
financial service' is yet to be defined. Also,
classification of services under the GST
regime would be based on the Services
Accounting Code (SAC). As a result, the
boundaries of this industry from a GST
perspective is unclear.
Ÿ Compliance is likely to increase manifold
for the banking sector which has pan India
presence. In wake of the same, cost of
doing business is likely to increase for the
sector
Ÿ Services such as investment banking to
overseas clients currently attract service
tax, while financial research, asset
management and advisory rendered to
overseas clients are tax free. As per the
draft place of supply rules, (all) such
services would be treated to have been
supplied in India. While this tax could be
rationalised based on the need of tax parity
between overseas and domestic clients,
the counter argument is that domestic
clients could potentially avail credit of such
GST charged by service providers, which
overseas clients will not be entitled to.
Ÿ The GST regulations require identification
of the location of 'supplier of service' since
GST would be reported and assessed in
state location. Such determination is
difficult for financial services. Certain
illustrations relate to:
Ÿ Credit card related functions such as
card issuance, statement generation,
accounting, risk management,
technology infrastructure could be
Level of compliances will increase manifold for banking and financial services sector under GST
Banking and financial servicesBy Kaustuv Sen
Section A: Onboarding GST – One Nation, One Tax
located in different states. The selection of the appropriate state to report GST on such
services would be difficult.
Ÿ Whether home or auto loans should be tagged to the state where stamp duty is paid on
the loan agreement or the automobile is registered.
Ÿ Financial services have a growing 'secondary' market beyond the ‘primary’ market
experienced by corporate and retail customers, such as securitisation transactions in loans,
distressed debt etc. Such transactions in unsecured debt may qualify as ‘actionable claims’, 2 3
e.g. personal loan and microfinance portfolios, PTCs issued by ARCs . Since transaction in
actionable claims are now treated as a service under GST regulations, such secondary
market may need to review the GST implications of its business.
Thus, the banking sector would possibly be mired with several intricate questions that would
hopefully be unravelled as the GST legislation shapes up.
132 Pass-through certificates3 Asset Reconstruction Companies
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
14
The Model GST law offers a mixed bag from an IT/ ITeS sector perspective. The following are
some of the key impact areas:
Ÿ Elimination of double taxation of software, subjected to service tax and VAT when sold
electronically. The term ‘services’ under the Model GST law has been defined to include
intangible property and ‘goods’ to exclude intangibles. However, a continuing debate is
whether the taxation of a product can be differentiated based on the medium through which it
is sold.
Ÿ While the Commerce Ministry has been pushing for continuing with tax exemptions for SEZ
and STP units, the Finance Ministry seems to be preferring a refund mechanism rather than
an up-front exemption. Given below is a snapshot of the exemptions currently being enjoyed
by SEZ/ STP units:
Taxes STP units SEZ units
Present regime Present regimeGST regime GST regime
Customs Duty Exempt
Payable (subsequently
refundable)
Exempt
4BCD – Upfront exemption may
continue
GST – Payable (subsequently
refundable)
Upfront exemption / refund
Exempt
Payable
Payable
Excise Duty
Service Tax
VAT/CST
4Basic Customs Duty
IT and ITeSBy Mahesh Jaising and Madhava Yathigiri
Section A: Onboarding GST – One Nation, One Tax
Ÿ Government, in past few budgets, has extended benefits for indigenous manufacturing of
tablet computers, mobile phones and consumer premise equipment. Based on such
benefits, industry players have setup manufacturing facilities in India. However, the request
has been to grandfather such benefits in a meaningful way. Hence, it would be worthwhile to
watch for the manner in which such benefits are carried forward.
Ÿ Under present service tax law, service providers operating from multiple locations can obtain
a single centralised registration and billing. However, the Model GST law requires every
supplier in each state to obtain registration and possibly to undertake billing from each
location, resulting in increase in compliance burden.
Ÿ The Model GST law prescribes certain transactions though undertaken without consideration
to be subjected to GST. As per the said schedule, services provided from the branch offices
to head offices may be subject to GST in situations where the billing is undertaken from head
office for which multiple branch offices have provided services to customer. This could
become a major area of concern for companies having pan India presence. In its absence,
the companies may be forced to file application for refund in multiple locations due to
accumulation of credit.
Undoubtedly, GST would usher in various benefits for the IT/ ITeS sector, which is hopeful that
the few issues aforementioned are ironed out so GST can be implemented smoothly and
successfully.
15
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
16
Ÿ Analyse impact from a business,
operational and financial perspective on
an immediate basis. Such an analysis
would aid the industry in taking a relook
at the costing/pricing of the goods
and/or services which drives business
performance in light of the revised tax
costs under the GST regime.
Ÿ Review existing business models and
analyse transaction flow under the new
law
Ÿ Analyse the impact of taxes under GST
on working capital and plan alternate
options, wherever required well in
advance to avoid any transition related
financial hardships. This would also aid
in drawing up a plan for the crucial last
quarter of fiscal 16-17 before
implementation of GST.
Ÿ Determining of key compliances to be
undertaken by the industry, which is
likely to be elaborate – and drawing out
a framework for being GST compliant
from day one
Ÿ Restructure or developing robust IT
systems aligned to meet requirements
under the new regime. This entails
complete automation of processes and
compliances (elucidated in detail in the
ensuing article)
Ÿ Training of personnel to embrace finer
nuances would be imperative for
successful implementation. Hence,
training requirements of different teams
in the company including tax teams,
business teams, procurement teams,
ought to be identified.
Ÿ Identify areas of advocacy and
engagement with the Government that
warrant representation to GST
authorities
Ÿ Planning and gearing up for possible
impact on businesses in the last quarter
before the roll-out.
While GST is all set to become a reality, the real question that looms
large is whether India Inc. has geared itself for the new regime of 5taxation, as elucidated in the Business Today – BMR Advisors Survey
(Section D of the report). It is imperative that India Inc. focuses on
addressing key issues.
GST PREPAREDNESS FROM AN INDUSTRY PERSPECTIVE
By Mamatha Anand
Section A: Onboarding GST – One Nation, One Tax
5 Business Today – BMR Advisors Survey on GST – Is India Inc. ready?, September 2016
Prepare for a myriad of changes
It may be discerned that the industry has substantial ground to cover before implementation.
Accordingly, it is vital that it acts fast chalking out an effective action plan with timelines since
the question is no longer if GST would be rolled-out, but it is the question of when.
While the companies are required to gear up in respect of various aspects as elaborated
above, such preparedness to a large extent will have to be based on host of draft GST
legislations which have been released to date. The final GST legislations are expected to be
available to industry only in the later part of the year with GST anticipated to be rolled out next
year, the industry is thus likely to face an uphill task in preparing itself.
17
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
It may be re-emphasised that GST will bring
structural changes in how businesses
operate with effects encompassing all their
departments, products and locations. The
ramifications of GST would not be limited to
only tax invoicing but rather impact every
aspect of corporate decision making, be it
production, inventory management, supply
chain management, delivery of service or
pricing.
Accordingly, Technology becomes an
important component when it comes to
managing a change in tax regime. The right
technological support ensures smooth
transition from the 'As-is' to 'Desired' stage.
With companies pursuing strategies involving
complex structure of products and services,
they must ensure that every module in their 6ERP complies with the change in tax
structure. The following factors need to be
ensured while implementing the technology
based changes:
Ÿ Changes in ERP masters, formats and
reports (e.g. vendor master, invoices,
purchase orders, sales register, etc.)
Ÿ Developing tax incidence points for each 7
entity (three GSTN numbers for each
entity in each state)
Ÿ Interaction with the government tax
reconciliation system based on GSTN
network
Ÿ Possible changes in accounting practices
as a result of consumption based tax
incidence
Ÿ Cohesiveness with the existing system to
ensure smooth transitions for pending
inventory
Ÿ Flexibility in ERP by having pre-emptive
provisions to incorporate subsequent
changes in the GST policy.
Process remodelling would also be required
to ensure that all business activities get
aligned to the changes in business
parameters with the advent of GST. For
instance, Vendor supply agreements may
change as the allocation of territory would be
based on market homogeneity rather than
tax jurisdiction, which would effectively mean
a revamped process flow of Order
Management and Purchase Management
modules.
A functional remodelling of process would
involve:
Ÿ Remodelling of process flows of business
activities such as ‘purchase to pay’ and
'order to cash'
Ÿ Updating and preparing policies related to
purchases, sales, intra-company
transactions, etc.
Ÿ Standard operating procedures (SOPs)
for submission of GST returns and
payments
Ÿ Change in vendor arrangements to
ensure tax compliance of vendors
Ÿ Change in arrangement with dealers as a
result of re-allocation of territories
Ÿ Reworking of organisation structure for
sales network
Ÿ Contingency plans in case of alterations
to GST policy
Ÿ Training of employees
IT infrastructure & process readinessBy Sarabjeet Singh and Harkishan Bhatia
Section A: Onboarding GST – One Nation, One Tax
186 Enterprise Resource Planning7 Goods and Services Tax Network
GST rules are still in draft stage with expectation
that the final rules once notified would give
companies a very limited bandwidth to
implement process related changes in the
business structure. Thus, businesses need to
start developing effective Project Management
(PM) strategies to efficiently plan, organize,
implement and control the change management
exercise to ensure all business functions are
aligned to a common goal, i.e. smooth transition
to GST. An effective PM strategy is required to
track timelines of all proposed changes across
entities and locations, manage change
management teams, relationships with external
consultants, map out different stakeholders, and
ensure compliance by vendors and dealers.
Further, the GST model is expected to evolve as
industry continues to advocate and suggest
changes to alter business impeding provisions
in the GST draft.
As next steps, businesses need to assess their
existing ERP systems and processes, map
movements of their products and services with
points of consumption and develop strategies /
practices to weed out inefficiencies in the
business activities which had crept in as a result
of tax distortions over the years. All these steps
would ensure that ability to conduct business is
not limited as a result of compliance with GST
framework. In the short term, GST
implementation would increase the compliance
cost for businesses but at the same time, it
presents an opportunity to standout in terms of
competitiveness. The result will depend on how
fast and effective businesses are in
implementing the change.
Industry will have
to tighten the nuts
and bolts of their
businesses.
19
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
20
With less than five months to go before the April 1, 2017 deadline, the Council has set its
wheels in motion, and held three meetings to deliberate on the nitty-gritties of the new system
and to iron-out differences on crucial first-principle issues. Key recommendations have been
made to firm up rollout which are very crucial as these recommendations will feed into drafting
of GST laws.
GST Council: cornerstone of GSTBy Payal Tuli and Anshul Aggarwal
Endorsing the spirit of co-operative federalism, the GST Council has been formulated to ensure
collaborative decision making and accelerate implementation of this landmark reform. Flagged
off by the Cabinet, the council has been set-up with representation of Central and State 8
Governments and aims to facilitate decisions factoring ground realities of both the states and
the center. Each key decision of the council would be taken with three-fourth majority – one-
third weightage for central government's vote and two-third for the collective votes of all states,
thus making a near-consensus between center and states an imperative for major decisions.
This bodes well for the GST as every decision taken by the Council would be based on majority
view, leaving less space for debate.
GST Council
Members
Union Minister of State in-charge of Revenue or Finance State Finance Ministers
Chairman
Union Finance Minister
Role and power
Ÿ Recommending critical parameters - rate of taxes, exemption list and threshold limits.
Ÿ Deciding technicalities of compensation to states for their revenue loss
Ÿ Recommending time-frame of bringing specified petroleum and allied products GST's
purview
Ÿ Formulating a robust and fair dispute resolution mechanism
Section A: Onboarding GST – One Nation, One Tax
8 The Council is chaired by the Union Finance Minister – Arun Jaitley and all the state finance ministers are part of the council. Additionally, a secretariat has been formulated, to support work of the council, which has IRS officers and members of Central Board of Excise & Customs as its members.
Key Decisions
Key decisions taken by the Council thus far are:
Ÿ Threshold limit fixed at INR 2 mn
Ÿ All cess levy to be subsumed under GST
Ÿ States to exercise control over assesses having turnover upto 15 mn
Ÿ Control over large sized assessees (with turnover exceeding INR 15 mn) would be exercised
either by the Centre or the State based on risk assessment formula
Ÿ Existing 1.1 million service tax assesses to be administered by the Central Govt., for initial
period
Ÿ Finalisation of the subordinate legislations for registration, payment, refund, returns and
invoice9
Ÿ The Centre had proposed a four tier tax rate structure to the States as follows:
- Lower rate of 4 percent for precious metals
- Lower rate of 6 percent for essential goods
- Two standard rates 12 and 18 percent applicable to goods and services
- Higher rate of 26 percent on luxury items, pan masala and tobacco products; In
addition, cess equivalent to the rate differential vis-à-vis the current regime may also be
levied on may be levied on ultra-luxury items
Contrary to expectations, no consensus was reached on the rates and industry would be
keenly watching out for the announcements post the meeting slated in early November.
The GST council has been entrusted with wide ranging powers which would have far reaching
consequences on how GST eventually shapes up and how business is conducted. Industry
expects that GST council will make unambiguous recommendations with utmost clarity to
mitigate litigation and promote ease of doing business. With public at large expecting the
council to decide reasonableness of GST rate to keep inflation under check, we expect the
council to remain proactive and receptive to the recommendations from various stakeholders.
Success of the Council would lie in assisting taxpayers and revenue department in overcoming
transition issues and bringing certainty, clarity and transparency under the new regime. This
can be attained by regular engagement and co-ordination with all stakeholders and issuance of
clarifications on a regular basis.
The effective functioning of the GST Council will have far reaching consequences on how GST eventually shapes up and how business is conducted.
21
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
9 As per last meeting of GST Council on October 18 and 19
22
GST is expected to bring about a paradigm shift in indirect taxation and consequently, manner of doing business, it is eagerly awaited and the developments closely observed in its run-up.
However, GST will evolve and mature over the next few years before it settles down as an ideal and comprehensive indirect tax regime for the country.
Section A: Onboarding GST – One Nation, One Tax
Key Takeaways
GST, hailed as one of India's biggest tax reforms, will turn India into a common market leading
to broadening of credit base and allowing greater ease of doing business with automated
registrations and compliances, albeit coupled with substantial and real time data exchange
with the tax authorities. As elaborated some sectors stand to gain vis-à-vis others.
The scheme of GST is in line with the 'Make in India' campaign of the Narendra Modi-led
government, which seeks to encourage investment in India. The implementation of GST will
significantly improve the competitiveness and performance of India's manufacturing sector.
GST will bring tax savings for this sector in the form of fewer taxes, elimination of cascading
taxes, seamless flow of input credits across the value chain, removal of dual taxation and
simplification of other concepts. Trading would also be amply incentivized under the GST with
traders being allowed the same credit eligibility as that of manufacturers.
It is also important to note that the GST regime in its initial implementation design, does leave
out a portion of the economic activity from its purview. This would occur due to exclusions for
specified petroleum products such as crude, petrol, diesel, aviation turbine fuel (ATF) and
natural gas, transfer of real estate, electricity and alcohol for human consumption combined
with anticipated exemptions for the education and healthcare sectors. Some of these products
and sectors may over a period of time, fold into the GST as well. Thus, the GST would evolve
and mature over the next few years before it settles down as an ideal and comprehensive
indirect tax regime for the country.
Keeping aside predictable teething issues specifically for the service industry elucidated earlier
in this report, holistically, the advent of GST is expected to provide a further boost to the Indian
economy with inclusive growth in industry, better investments and hopefully improved
consumer spending power. GST would bring about a paradigm shift in indirect taxation and
consequently, manner of doing business, it is eagerly awaited and the developments closely
observed in its run-up.
23
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
Looking at the macro fundamentals in detail,
in Q1 of this fiscal, India grew at 7.1 per cent
with a 3.1 per cent contraction in investment
activity. The latter is due to de-growth in
capital goods sector, government's capital
expenditure pattern, and sluggish investment
activity in the private sector. Consumer price
index (CPI) inflation came down to 4.3 per
cent in September and is expected to drop
further following a good monsoon. Trade
deficit narrowed materially, falling by more
than 40 per cent to USD 34.7 bn (INR 2.3 tn)
in first five months of current fiscal, aided
largely by a double digit slide in imports
compared to a slight drop in exports. Growth
in industrial production continues to remain
volatile, with a contraction of 0.7 per cent
and 2.5 per cent in July and August
respectively compared to positive growth of
1.9 per cent in June.
There are signs of green shoots visible in
manufacturing with the purchasing
managers' index (PMI) and FICCI's
Economic Outlook Survey indicating a pick-
up in fresh orders for both domestic and
external sectors. Growth in the services
sector is becoming broad-based and
witnessing sharp acceleration due to new
business models. Businesses are optimistic
on better economic conditions. The positive
sentiments in the economy can also be seen
from sectors such as automobiles, which is
registering an increase in sales across most
segments. Railway, ports and international
air freight traffic, foreign tourist arrivals, and
domestic air passenger traffic are also
witnessing an improvement, thus providing
an underlying momentum for upturn.
In the external sector, continuous decline in
merchandise exports growth since the last
fiscal has largely been arrested with positive
growth expected in the second quarter.
While the pace of FDI inflows slowed in the
first two months of 2016-17, net portfolio
flows have remained robust.
India's GDP forecasts for the entire fiscal
(FY2016-17) have revealed mixed sentiments
- with some international bodies revising
their forecasts downward marginally and
others predicting an acceleration in growth.
All projections suggest that India would be
able to sustain its growth momentum and
register a strong GDP ranging between 7.4-
7.7 per cent. Detailed projection of India's
GDP by various agencies highlighted in the
table.
Unlike major world economies surviving on monetary and fiscal push for the last few
years, India is on a self-accelerating growth path, albeit one supported by low oil
prices, prudent macroeconomic management and reforms. Economic growth in
India is expected to stay high owing to a normal monsoon and general increase in
wages, which is likely to boost consumer demand. With revival in consumption and
benign interest rates (and inflation) situation, recovery in the investments cycle is
likely to set in coming quarters.
MACROECONOMIC TRENDS & PROSPECTS
SECTION B
Section B: Macro-economic Trends and Prospects
24
Looking at the balance of fiscal 16-17, the momentum of growth is expected to accelerate
mainly on account of two factors which will pull demand. Firstly, the normal monsoon this year
will bring down food inflation and bolster agricultural growth and rural demand. Another
stimulus to consumption spending is expected from the implementation of the seventh pay
commission. Growth will be triggered more from these domestic factors rather than externally,
especially since global economic growth continues to be anaemic.
Efforts to clean-up bank balance sheets to revive lending and reducing excessive leverage of
large corporations is setting the stage for recovery in quality of investment spending, which is
likely to drive higher growth. Enactment of legislation to allow a national value added Goods
and Services Tax (GST) is a milestone reform that is expected to create an integrated and
productive economy. Owing to chugging wheels of reforms, India jumped up 16 spots (highest
improvement) to 39th position among 138 economies in the recent Global Competitiveness
Index of the World Economic Forum.
RBI IMF ADB OECD FITCHGOLDMAN
SACHSWORLDBANK
7.6 7.4 7.4 7.4 7.7 7.77.6
Growth will be triggered from domestic factors rather than external, given anaemic global economic growth
25
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
Over the past few months, India's financial
sector has witnessed action, from the
passage of the GST bill to the decision of
merging the Union and Railway budgets and
the feat to achieve India's fiscal deficit target
et al. There has also been significant impetus
on two major fronts:
Ÿ Revision of criteria for second tranche of
capital infusion into PSU banks which
includes raising capital through public
offers and sale of non-core assets, to
assuage the PSU debt books.
Ÿ Decision to consolidate State Bank of
India and its associates, India's first ever
large-scale consolidation in the banking
history, creating a banking behemoth with
an asset strength of INR 37,000 bn.
Apart from these, there have been three
major developments described briefly below:
Nod to 100 per cent FDI in commodity
broking and other financial services
Soon after the recent monumental FDI
liberalisation decision in June, the
government took another path-breaking
decision to liberalise 100 per cent FDI in
financial services such as commodity
broking and 18 similar areas under Non-
Banking Financial Companies (NBFCs). This
decision is aligned with the government's
Ease of Doing Business endeavour and is
aimed at facilitating smoother entry into the
Indian market by doing away with the need of
seeking government approvals. With this,
FDI can now flow seamlessly into these
services under the automatic route, provided
they are regulated by a financial sector
regulator like the Reserve Bank of India (RBI)
and Securities and Exchange Board of India
(SEBI). Minimum capitalization norms have
also been eliminated. This pronouncement is
most certainly a boon for small and medium
enterprises (SMEs) and micro businesses in
non-urban areas as it promises to facilitate
faster sanction of loans with favourable
interest rates. It is also the second time that
the government has underscored its deeper
intent of uplifting the state of NBFCs in India -
- after it encouraged the sector in the Budget
2016-17 by appeasing the longstanding
demand of a 5 per cent deduction for
provision of bad and doubtful debts, hitherto
not allowed under the Income Tax Act.
Revised DTAA between India and Cyprus
Closely following the change to India-
Mauritius Treaty, the Union Cabinet recently
approved the signing of the revised double
taxation avoidance agreement (DTAA)
between India and Cyprus, after successfully
completing negotiations in June. The revised
DTAA, shall provide for source-based
taxation of capital gains on transfer of shares
instead of one based on residence. This is
considered as an improvement over the
earlier treaty which had led to distortion of
financial and real investment flows by
artificial diversion of investments from
countries of origin. Additionally,
grandfathering of investments made prior to
April 1, 2017, in respect of which capital
gains would be taxed in the country of
residence is aligned to India's treaty policy
for curbing tax evasion, round tripping and
base erosion or profit shifting. The amended
treaty has also paved the way for removal of
Cyprus from the list of 'Notified Jurisdictional
Areas', retrospectively from 2013.
Income Declaration Scheme 2016
Ministry closed its Income Declaration
Scheme (IDS) with a mop up of INR 652.5 bn
(USD 9.8 bn i.e. ~0.5 per cent of FY16 GDP),
marking tremendous success in India's
endeavour to combat black money in the
DEVELOPMENTS IN MINISTRY OF FINANCE
27
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
economy. A total of 64,275 persons declared
their unaccounted wealth under the window
to make the aggregate declared amount
largest ever for any such scheme in Indian
history.
According to Finance Minister, the figures are
likely to be revised upwards after the
tabulation of data is finalised. Out of the total
amount of INR 293.62 bn as tax and penalty
from these declarations, around INR 146.81
bn will flow into central government coffers in
the current financial year, while the remaining
amount will be collected in 2017-18. The
money would flow to the Consolidated Fund
of India and would be used for public
welfare.
Unprecedented success of the scheme
reveals a significant shift in the socio
economic mindset; the rush to embrace
amnesty opportunity reinforces the
government's relentlessness in ushering in
transparency. In alignment with the global
drive towards elimination of unaccounted
income and wealth (G20 transparency
measures), the success of IDS is a crucial
milestone for India in its fight against black
money.
As India's continuous negative growth in
exports since the last fiscal gets largely
contained, a gradual improvement in exports
performance is expected on account of
recovery in global demand and hardening
commodity prices. To boost exports and
attract investments, the Commerce Ministry
is taking several steps:
Ÿ Recommending that the Finance Ministry
raise tax holiday for start-ups from three to
seven years following vigorous requests
from start-ups
Ÿ Strengthening domestic industry and
boosting exports by leveraging
opportunities stemming from stimulus
programmes implemented by major
economies
Ÿ Setting-up two committees for expeditious
redressal of grievances on trade and
industry under headquarter and zonal
regional authority levels
Ÿ Setting-up a team of experts to examine
issues raised by the Global Innovation
Index and recommending ways to bolster
India's innovation ranking (presently 66 of
143 countries)
Ÿ Presenting proposals to the World Trade
Organisation (WTO) on ways to ease
trade in services, to leverage one of its
strongest competitive advantages
Additionally, the government has taken a
momentous step towards meeting its vision
of a transparent system by way of an end to
end Government e-Marketplace (GeM)
procurement system for goods and services
for government buyers. This comes as a
great relief to sellers as it obliterates the
tedious and time consuming tendering
process and cuts down transaction and
administrative costs. It shall also ensure
speedy payments by way of a 10-day
payment process mandate. This system
ensures transparency and reliability through
online authentication of suppliers and
government buyers using self-certification
and authentication through the Aadhaar, PAN
card and biometric attendance system.
DEVELOPMENTS IN MINISTRY OF COMMERCE AND INDUSTRY
Section C: Key Sector Updates
28
Bidding adieu to 5 year plans
As part of Modi government's resolve to
revise and upgrade institutions, the NITI
Aayog has been entrusted with a task of
working out a 15-year vision document,
which will encapsulate a roadmap for India's
development replacing the Nehruvian five-
year planning system followed for over six
decades. NITI Aayog has kick-started the
process with a four pronged focus – re-
engineering states' policies and aligning
them with the changing planning process at
the center, doing away with distinction
between plan and non-plan expenditure,
changing the financial year and merging the
rail and general budget.
The first vision document, will lay down
schemes, programmes and strategies to
achieve the long-term vision and come into
effect next fiscal. It will also be coterminous
with India's commitment to UNDP's 2030
sustainable development goals. Additionally,
a dashboard for monitoring, evaluation and
review of the implementation of vision
document shall be created. The first
Development Agenda shall be reviewed in
2019-29, in line with termination of 14th
Finance Commission, following which
reviews would be done every three years to
ensure alignment with changing financial
dynamics. Outcome-based monitoring of all
government programmes and ministries on a
yearly basis will also be undertaken. This
would help in keeping a tab on the progress
made. The new vision document shall cover
internal security and defence, hitherto not
covered under the 5 year plans. This
decision of marrying action on the ground
with planning is definitely a reason for cheer,
though, its success shall depend upon the
plan being translated into policy.
DEVELOPMENTS IN NITI AAYOG
29
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
India has witnessed a path-breaking thrust
and purpose in its foreign policy since the
formation of Modi government, with new
orientations that are less ambivalent, more
focused and more assertive. India's multi-
layered foreign policy has assumed center of
importance, starting from economic
diplomacy with a view to enhancing FDI
inflows, delicate and balanced management
of relations, defence diplomacy and energy
diplomacy covering coal, hydrocarbons,
solar, nuclear and renewable energy sectors.
A broad overview of Indian foreign policy in
past few months shows positive gains and
recognition of few challenges. India's
participation in international forums – G20
Summit (Hangzhou, China), BRICS Summit, th
14 Indo-Asean Summit and the East Asia
forum – were tremendously significant in
strengthening political, economic and
cultural ties with member countries.
Unlike previous G20 Summits, the summit
this time
had global
security as
one of its
main
agendas with Prime Minister Modi seizing the
opportunity to highlight India's challenges. 10Besides, Arvind Panagariya , India's chief
interlocutor at the summit, spoke about the
general sentiment against protectionism,
issue of excess capacity and resulting
international dumping; for which the
participating countries voiced their support
towards a multilateral approach. On the
sidelines of the G20 Summit, Indian Prime
Minister met Chinese President Xi Jinping
and held talks on bilateral conflicts between
the two countries over a raft of issues aimed 11at harmonising ties . China and India have
far more in common than differences and far
more areas of cooperation than competition.
India voiced its condemnation for the recent
terror attacks in the UN General Assembly,
receiving wide support from member
countries.
Highlighting key
economic
outcomes, the joint
declaration of the BRICS Summit, in Goa
marked satisfaction on operationalisation of
the New Development Bank (NDB) and the
Contingent Reserve Arrangement (CRA),
which augurs well for strengthening the role
of BRICS in the global economic order. With
the theme 'Building Responsive, Inclusive
and Collective Solutions', the BRICS nations
deliberated on security challenges,
strengthening economic ties and enhancing
connectivity and committed to lead by
example in implementation of the 2030
Agenda for Sustainable Development aimed
towards poverty eradication through a
balanced emphasis on economic, social and
environmental dimensions of sustainable
development. By inviting the BIMSTEC
countries to the summit, India clearly
revealed its stance for it's 'neighbourhood
first policy' and also played a sincere
interlocutor between the BRICS and
BIMSTEC as Brazil, Russia and South Africa
have very limited in-roads into the Bay of
Bengal littorals.
Drawing a link between Indian and South
African cultures during Prime Minister Modi's
four-nation visit to Africa, it became clear that
the visit was more than just diplomacy. Visits
to Mozambique, South Africa, Tanzania and
Kenya were accompanied by discussions on
securing lines of coal and natural gas,
funding capacity-building in energy
DEVELOPMENTS IN FOREIGN AFFAIRS
Section C: Key Sector Updates
30
10 Vice Chairman of NITI Aayog11Note: During his two day visit to China during the G20 Summit, PM Modi used the opportunity to meet many other world leaders. He met Australian Prime Minister Malcolm Turnbull, Deputy Crown Prince of Saudi Arabia Mohammad bin Salman, UK Prime Minister Theresa May,Turkish President Recep Tayyip Erdogan and Argentine President Mauricio Marci and held talks with them on key bilateral issues. He also informally met US President Barack Obama and French President Francois Hollande.
production and enhancing trade of pulses to
meet Indian demand shortfall. India has
diverse reasons to improve its ties with Africa
– sharing low-cost technologies and
pharmaceuticals, building solar and
renewable energy alliance and growing
markets for trade in goods. A stark 84 per
cent of India's imports from the Sub-Saharan
region comprise raw materials and non-
processed consumer goods.
PM Modi's visit to Vietnam marked
momentous forays into South-East Asia, a
10th anniversary in strategic partnership and th
a 45 anniversary of establishment of
diplomatic relations between the two
countries. India shares a special relationship
with Vietnam, ties that have deep roots in the
common struggle for liberation from foreign
rule and visit of Pandit Jawaharlal Nehru
following Vietnam's independence in 1954.
However, what makes the prime minister's
recent visit to Vietnam particularly significant
is the verdict on South China Sea by
Permanent Court of Arbitration at The Hague
in July, 2016, at behest of Philippines.
Although Vietnam was not party to the
dispute, it has substantial interests to harvest
energy and fishery in South China Sea has
been a source of concern. India's measured
statement post the verdict emphasised its
stance for freedom of navigation, maritime
security and openness of sea-lanes of
communication. The two countries also
signed 12 agreements in defence, capacity
building, training and human resource
development to cement their alliance.
Besides, India welcomed a host of foreign
dignitaries: President of Afghanistan, US
Secretary of State, President of Myanmar,
President of Egypt and Prime Minister of 12
Nepal paving the path towards stronger
internal diplomacy.
Top left to right: BRICS Summit 2016, Goa; External Affairs Minister Smt Sushma Swaraj meeting Chinese Foreign Minister Mr Wang Yi. PM Modi on a visit to Africa; G20 Summit, China; Sushma Swaraj speaking Bottom left to right:at the UN General Assembly
31
12 Minister of Foreign Affairs of Nepal, Minister of Foreign Affairs of Republic of Turkey, Foreign Affairs Minister of Maldives, Foreign Minister of China, Foreign Affairs and International Coorperation of the Democratic Republic of Congo, Deputy Prime Minister and Home Minister of Malaysia, Foreign Affairs Minister of Hungary also visited India during this period
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
DEVELOPMENTS IN MINISTRY OF DEFENCE
For India's rise as a global player, rapid
paced development of the defence industry
is a key imperative.
India's defence ties with the US gets big
boost
India and the US continued to strengthen
their defence partnership after the US
accorded India the status of 'Major Defence
Partner', announced during the visit of Indian
PM to Washington D.C in June 2016.
Bilateral defence ties received a further boost
with the visit of Indian Defense Minister
Manohar Parrikar to the US in end-August,
when both sides agreed on the significance
of Major Defence Partner framework to
facilitate innovative and advanced
opportunities in defence technology and
trade cooperation.
The Major Defence Partner classification
eliminates all previous barriers that come in
the way of defence strategic cooperation,
including co-production, co-development
projects and joint exercises. As part of the
framework:
Ÿ US will elevate defence, trade and
technology sharing with India to a level
commensurate with its closest allies and
partners;
Ÿ India will receive license-free access to a
wide range of dual-use technologies in
conjunction with steps that India has
committed to take to advance its export
control objectives; and
Ÿ US will continue to facilitate export of
goods and technology to support 'Make
in India' program and to develop a robust
defence industry
India signs agreement with France for 36
Rafale fighter jets
In a significant development towards
enhancing India's defence capabilities, India
concluded an inter-governmental agreement
(IGA) with France for the purchase of 36
Rafale fighter jets for USD 8.8 bn (INR 586.6
bn).
The agreement inked between the Defence
Ministers of the two countries on September
23, 2016 came after 17 months of intense
negotiations. It includes the delivery of
aircraft in fly-away condition, weapons,
simulators, spares, maintenance, and
performance based logistics support for five
years.
As part of the deal, French Giant Dassault
will begin aircraft deliveries after 36 months
and complete it in 67 months. From
development of Indian defence industry
perspective, the key features are:
Section C: Key Sector Updates
32
DEVELOPMENTS IN MINISTRY OF RAILWAYS
Rail – General Budget Merger
Ending a 92 year convention, the Union Cabinet recently
decided to merge the Railway budget with the General Budget
and agreed to advance the date of its presentation to February
such that its passage and presidential assent is completed
before end of the fiscal year.
This holds significance for the cash-strapped Indian Railways as
it will help save INR 100 bn annually by way of dividend
payments. In its report on restructuring of railways, an expert 13committee headed by Dr. Bibek Debroy made out a case for
abandoning a standalone railway budget. By subsuming it
within the Union budget, the railways will be equipped to raise
funds, from external agencies to invest in projects instead of
being restricted to the Indian Railway Finance Corporation to
mobilise funds. The merger may lead to a structural
transformation over the long run in terms of accounting and
operating on commercial principles like corporate bodies,
higher revenues, productivity and internal generation of funds
and better project implementation based on economic logic
rather than political considerations. However, it may also lead to
clarity issues over accounting items such as pension payments
and much will depend on the operational autonomy to the
railways. Additionally, the government's decision to advance the
budget shall lead to better planning and spending.
Ÿ 50 per cent offset clause under which French companies will invest half the value of contract
in India, which is expected to develop expertise domestically in the aerospace sector
Ÿ 74 per cent of the 50 per cent offset value should be exported from India. This is expected to
result in more than USD 3 bn (INR 200 bn) exports over the next seven years
Ÿ 6 per cent technology sharing component, which is being discussed with the Defence
Research and Development Organisation (DRDO)
3313 Dr. Debroy is permanent member of the NITI Aayog
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
DEVELOPMENTS IN MINISTRY OF ROAD TRANSPORT AND HIGHWAYS
DEVELOPMENTS IN MINISTRY OF POWER
Expediting highway projects and improving
port connectivity
Working to meet its target of awarding
25,000 km of road projects this fiscal, the
Ministry has kick-started a series of initiatives
to expedite major pending projects of the
National Highways Authority of India (NHAI).
These include, revamping the dispute
resolution mechanism and streamlining land
acquisition and regulatory clearances etc. in
coordination with other ministries. To revive
over 100 stalled NHAI projects languishing
due to poor performance of contractors,
public agitation, land acquisition, utility
shifting, delay in statutory clearances etc.,
the government has permitted one time fund
infusion under the public private partnership
(PPP) mode and rationalised compensation
to concessionaires for delays not attributable
to them. Additionally, regular meetings are
held with ministry officials, project
developers, state governments, contractors
and concessionaires etc. to ensure seamless
work on projects. The NHAI is planning to
take up 82 projects under the Bharatmala 14project to improve port connectivity and link
economic hubs to major and minor ports via
road and rail, which shall bring down
country's logistics costs considerably.
15The Power Ministry has been graded as one of the best performing ministries at the Centre
and it is evident that the recent initiatives have started bearing fruit. With an increased
availability of power resulting in fall in prices and gradual easing of transmission constraints,
the milestone of countrywide 24x7 supply seems achievable. The ministry has created a 16milestone through its UJALA initiative which has resulted in 55.7 million units of energy
savings, thereby reducing carbon emissions by over 45,000 tons.
To promote its objectives, the ministry has taken myriad steps:17
Ÿ Joint partnership with USAID to strengthen India's power grid to manage large-scale
integration of renewable energy
Ÿ Two funds of USD 1 bn each planned, to enable alternative financing options for stressed
power assets and renewable energy projects under the National Investment and
Infrastructure Fund (NIIF)18
Ÿ Nine unused gas-based power generation plants allotted 9.93 mmscmd (million standard
cubic metres a day) through a transparent and competitive reverse e-auction process
Section C: Key Sector Updates
34
14 Bharatmala Project is an umbrella scheme, launched for construction of roads along India's borders and coastal areas15 Key findings from an various surveys16 Unnat Jyoti by Affordable LEDs for all17 The US Agency for International Development18 Because of non-availability of fuel
Move towards non-conventional sources of
energy
India is set to launch its maiden tidal power
project under its vision of developing a 'blue
economy'. The Ocean Thermal Energy
Conversion (OTEC) project, which is planned
in Lakshadweep, is an outcome of three-and-
a-half decades of planning. This project has
an expected power generating capacity of 19200KW. A recent study conducted on
potential tidal and wave energy production in
India, revealed that India has a total
estimated tidal energy capacity of 8,000 MW.
With its coastline of around 2000 km, it is
well-placed to exploit ocean thermal energy
potential. According to CRISIL, there are four
operational tidal power plants in the world.
After France, Korea, Canada and China,
India would be the fifth country to generate
power from tidal waves. This is a step
towards the government's goal of providing
clean energy and holds potential for power
starved economy.
Additionally, the government has planned to
set up a grid-connected 1,000 MW wind
energy project which will supply power at a
price discovered through competitive
bidding and aims to encourage
competitiveness through scaling up of
project size and fulfillment of RPO 20
(renewable purchase obligation) of states
with scarce wind capacity. The centre has set
an ambitious target of achieving 175 GW of
power capacity from renewable energy
resources by 2022; of the 175 GW, 60 GW is
expected to come from wind power.
DEVELOPMENTS IN MINISTRY OF NEW AND RENEWABLE ENERGY
India is set to launch its maiden tidal power project under its vision of developing a 'blue economy'.
35
19 Study on Tidal & Waves Energy in India: Survey on the Potential & Proposition of a Roadmaphttp://www.ireda.gov.in/writereaddata/AFD_Tidal.pdf20 Non Solar Renewable Purchase Obligation
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
DEVELOPMENTS IN MINISTRY OF LAW AND JUSTICE
DEVELOPMENTS IN MINISTRY OF CORPORATE AFFAIRS
In the last quarter, the main thrust of Ministry
has been towards ensuring minimum
government maximum governance and
promoting ease of doing business.
An expert committee set up to examine the
Specific Relief Act, 1963 submitted its report
to the Minister recommending modifications
in the Act. The committee provided
guidelines for reducing the discretion
granted to Courts while granting
performance and injunctive reliefs.
The committee constituted to examine
Prevention of Corruption (Amendment) Bill,
2013 submitted its report to Rajya Sabha on
August 12, 2016. The Bill seeks to amend the
1988 Act to include (a) a bribe giver who
reports the matter to the police within seven
days may not be penalized, and (b) prior
sanction for investigating a public servant
must be given by the government instead of
the Lokpal.
The Lokpal and Lokayuktas (Amendment)
Bill, 2016 was introduced and passed in the
Lok Sabha on July 27, 2016. The Bill
retrospectively amends the Lokpal and
Lokayuktas Act, 2013 in relation to
declaration of assets and liabilities by public
servants.
As an initiative towards digital India and e-
governance, web portal named Legal
Information Management & Briefing System
(“LIMBS”) has been introduced for centrally
monitoring cases of Union of India pending
in various Courts and Tribunals.
Novel Mediation and Conciliation rules
Termed a 'giant leap' for mediation in India,
the Corporate Affairs Ministry has put in
place a new framework for mediation and
conciliation. This could soon become the
chosen alternative dispute resolution (ADR)
mechanism for resolving commercial
disputes in the country. Under this:
1. The regional director (RD) shall prepare
panel of experts, eligible to be appointed as 21
mediators
2. The Mediator or conciliator shall attempt to
facilitate voluntary resolution of disputes by
communicating views of each party to the
other; assisting them in identifying issues,
reducing misunderstandings and clarifying
priorities
3. The conciliation process shall be
completed within a period of three months
from date of appointment of experts
4. Any party aggrieved by the
recommendation may file objections to the
central government/tribunal/appellate tribunal
The Companies Act Rule of mediation is
opposite to its prevalent legal position which
is characterized by detailed technical
procedures. Thus reconciling the two shall
be a prerequisite to implement this.
Section C: Key Sector Updates
36
21 The candidate should be a qualified legal practitioner having 10 years' experience and professional Chartered Accountant with 15 years of continuous practice or a judge of Supreme Court/High Court/District Court. The candidate would be disqualified if he is an undischarged insolvent/convicted for an offence/punished in any disciplinary proceedings
DEVELOPMENTS IN MINISTRY OF COMMUNICATION AND INFORMATION TECHNOLOGY
Spectrum auction raises INR 657.89 bn
(USD 9.87 bn)
Concluding its largest ever spectrum auction,
India raised a total corpus of INR 657.89 bn,
its highest spectrum sale in last four years.
With spectrum scarcity in India now a thing
of the past, seven participating telcos bid
fiercely around the 1800MHz, 2100MHz and
2300MHz bands towards bolstering their 4G-
compatible spectrum holdings. Although the
sale fell significantly short of its target of INR
5.66 tn (USD 84.9 bn) (estimated for full
spectrum sale at reserve price), with only 40
percent of the airwaves being sold, the
government is considering re-auctioning of
the remaining spectrum and is hopeful of an
uptick in sales. After 5 days and 31 rounds of
bidding, Vodafone India emerged as the
winner securing a total of 365.2MHz for INR
202.8 bn followed by Bharti Airtel securing
173.8 MHz for INR 142.4 bn (USD 2.14 bn)
and Reliance Jio paying INR 136.7 bn (USD
2.05 bn) for 269.2MHz. Telcos have however
shared that the excessive pricing of the
spectrum was the deciding factor in the
operators' decision to curb their bidding, and
urged the government to lower the price in
the future, particularly for the 700MHz band
which alone carried a price of INR 4 tn (USD
60 bn) for the entire holding across all 22
circles.
DEVELOPMENTS IN MINISTRY OF INFORMATION AND BROADCASTING
Government formulating a national
communication policy
The Information and Broadcasting Ministry is
in the process of formulating a national
policy on communication which has been
recognised as a critical component in
governance by the Modi Government. This
was announced by the Minister, M. Venkaiah
Naidu, at the inauguration of the Regional
Editors' Conference organised by the Press
Information Bureau. The minister further
stated that there was need for government
communicators to adopt innovative ways to
reach out to every individual in the country
regarding government policies and
programmes leveraging revolutionary
changes in information technology and the
tools / systems for instant information and
communication dissemination.
37
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
BMR THOUGHT LEADERSHIP
SECTION D
Business Today - BMR
Advisors Survey on GST:
Is India Inc. ready?First published in Business Today, issue
dated September 11, 2016
In wake of the above requirements
mapped for being GST prepared,
Business Today and BMR Advisors
conducted a survey seeking to assess
industry's preparedness as well as
perception towards GST by capturing
responses of top business and tax
leaders through a web-based
questionnaire.
Section D: BMR Advisors-Business Today GST Poll
38
Welcomed By Industry
The most striking conclusion of the survey is that the new law has been warmly welcomed by
industry. Over three-fourths of the 66 CEOs/senior executives surveyed said GST would be
beneficial for their organisation and is an essential tax reform.
More than half the participants believe that GST will bring monetary gains to their business and
more than 49 per cent do not foresee any significant increase in tax compliance costs.
Interestingly, around 28 per cent expect the expenditure on tax compliance to go down after
GST is implemented. This outlines industry's optimism around the new tax.
Running Behind The Clock?
While GST has been welcomed by majority of the respondents, a meagre 19 per cent believe
that their organisation's current readiness level can be marked above 50 per cent. In fact, 45
per cent respondents indicate that once the GST law(s) are notified, their organisation would
need more than six months to prepare for it. This means that despite eagerly waiting for the
new tax system for so long, industry is simply not prepared for it. Not surprisingly, more than 59
per cent respondents say they are yet to evaluate the likely impact of GST on prices of offerings
of their organisation. Obviously, there is much to be done.
What should be the ideal tax rate for merit standard and demerit goods under GST
14, 20, 401%
14, 18, 407%
12, 18, 3046%
12, 16, 2445%
Given the current level of the Government’s preparedness, do you expect GST to be
implemented by 1 April 2017?
NO58%
YES32%
CAN’T SAY10%
How soon should the excluded sectors (liquor, petroleum, real estate) be brought within the
ambit of GST?
Day 1 of launch 1 - 2 years 3 - 5 years Never
29% 42% 22% 7%
Not A Realistic Timeline!A major reason for industry's
unpreparedness could be that most
corporate honchos still believe that
April 1, 2017, is not a realistic deadline
for rollout of the new tax system. This is
evident from 58 per cent respondents
rooting against it. The implementation
process will involve passage of final
GST law(s) in the upcoming winter
session of Parliament after
recommendations of the Council, and
issuance of various rules, regulations,
notifications, forms, etc, all before the
implementation date of April 1, 2017.
Development of a robust IT backbone,
departmental training, responding to
various industry issues, and
establishing a smooth transition
mechanism for taxpayers are other
indispensable requirements for the
government to avoid a rushed launch
of the new tax regime.
39
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
Wanted: A Perfect GSTThe government has been consistently
criticised by subject experts and some
opposition parties for proposing to bring in
partial GST by keeping major tax generating
commodities outside its ambit, including
alcohol and petroleum. This has been
alleged as a tool to bring the majority of
states on board. While the government has
expressed its willingness to bring the
excluded segments within the scope of GST
at a later date, 29 per cent respondents are
of the view that these sectors should be
covered under the new tax from the first day
itself. Interestingly, only 7 per cent
respondents are in favour of keeping these
products outside forever. Clearly, industry
wants a perfect GST that will cover all
sectors.
Wish List From GovernmentWe also asked our respondents about their
expectations from GST as a taxation policy.
The prominent demand of industry seems to
be tax certainty and transparency from the
government. A frequent suggestion is
issuance of a clear set of rules and
legislation with minimal scope for
interpretation and ambiguity. Multiple
incentives such as area-based exemptions,
tax benefits to export-oriented units and
hardware/software technology parks, etc,
available to industry under existing tax
schemes should also continue under the
new regime, say most.
As far as the tax rates are concerned,
industry's desire seems aligned with the
opposition parties' demand that they be
moderate. An overwhelming 91 per cent
respondents indicate that the demerit rate
should be kept within the 24-30 per cent
range, and most of them expect a lower rate
of 12-14 per cent. The standard rate is
accordingly anticipated to be 16-18 per cent.
Do you anticipate the need for review of the operational structure of your organisation due to
implementation of GST?
Do you expect your organisation to benefit from GST?
Do you expect GST to have a positive financial impact on your organisation
Do you expect GST to increase the working capital requirements of your organisation?
Do you have an assessment of the impact of GST on pricing of the offerings of your organisation?
48%YES
77% YES
28%NO
4% NO
19% NO
10% NO
25%CAN’T SAY
19% CAN’T SAY
14% CAN’T SAY
29% CAN’T SAY61% YES
67% YES
41% YES 59% NO
Section D: BMR Advisors-Business Today GST Poll
40
Moderate rates are likely to check the
possible short-term inflation while the
economy adapts to the new regime.
When asked for measures expected from the
government for smooth transition to GST, the
respondents ranked setting up of grievance
cells and expert committees for redress of
various legal and operational issues as the
most critical measures. Further, there is a
clear demand for installing easy compliance
procedures with minimum interface between
the tax department and the tax payer to
facilitate ease of doing business. Congenial
attitude of field tax officers is another big
demand.
More Than Just A Tax Reform
GST is being anticipated as one of the most
prominent tax reforms in India since
Independence. It is likely to impact almost all
spheres of business, including sales and
marketing, accounts & finance, supply &
distribution, human resources and IT
infrastructure. Organisations would need to
deploy cross-functional teams to conduct a
comprehensive SWOT analysis and
implement relevant measures.
Nearly half the respondents agree that their
organisation will require a thorough review of
the existing operational structure. That said,
the survey throws up alignment of IT/ERP
systems as the most critical area that India
Inc. needs to address. It is followed by
pricing policy review, logistics management,
personnel training and advocacy.
How do you expect the cost of compliance to change for your organisation under GST?
Do you anticipate need for a substantial revision of internal operational procedures in respect of
indirect tax compliance after GST is implemented?
Please rank the following impact areas in order of their importance for your organisation (one being
the highest and five being the lowest).
28%
Should reduce
20%
Should largelyremain the same
29%
51%
35%
14%
48%
23%
33% 33%38%
Can’t say
Yes, a major change is anticipated in standard operation procedures.
No, the changes can be accommodated without a substantial revision in procedures.
Should increasemarginally
13%
Should increasesignificantly
10%
Can’t say
1 2 3 4 5
1. Alignment of IT systems2. Review of pricing policy in view of changes in tax structure3. Logistics and supply chain management4. Personnel training and HR management5. Addressing policy level issues specific to your industry
How much time does your organisation need to be ready once the GST is notified?
Upto 6 months
6 - 12 months
More than a year
55%
39%
6%
41
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
METHODOLOGY
Business Today and BMR Advisors approached a 66-strong C-suite audience (CEOs, MDs,
Chairmen, Presidents and CFOs), tax heads and managers, and tax experts across sectors
and sought their response to the introduction of GST. The survey questions were designed to
garner their opinions on two key issues - industry's perception about GST and its level of
preparedness for migrating to the new tax regime. To develop the questionnaire, executives
from BMR Advisors brainstormed on potential challenges ahead, perceptions about the new
tax, nuances of the Model GST Law, the government's readiness and what industry needs to
have in place for a smooth transition to the new system.
What Tax Heads Have To Say
The essence of GST is seamless flow of tax credits through the supply chain till the
consumption takes place to ensure there is no tax on taxes levied at earlier stages. This,
coupled with uniformity in tax rates across the states, is expected to establish a single market
across the country.
However, easier availability of tax credits is likely to be coupled with early cash outflow towards
output taxes as taxable events might be advanced. The potential increase in tax rate on
services and possible taxation of stock transfers seem to be the factors contributing to more
than 67 per cent of the respondents predicting their organisation's working capital requirements
will rise under GST. Around half the respondents said a substantive revision of taxation
processes would be needed within their organisations.
To conclude, industry's outlook towards introduction of the new tax is fairly positive and
welcoming. It is likely to rationalise indirect taxation and could increase the confidence of the
business community in the Indian taxation system, which otherwise is hugely complex and
inefficient. Industry expects the government to support smooth transition to the new system.
At the same time, India Inc. seems far behind in preparedness given the government's timeline
of April 2017 for implementation. Industry needs to commence working on an effective
transition plan. And fast.
How prepared is your organisation to implement GST?
In terms of criticality, rank the following measures expected from the Government for helping
businesses transition to GST (one being the highest and three being the lowest).
46% 52% 39%
1 2 3
Establishing grievance cells and expert committees for
redressal of various operational and legal issues
Effective advance ruling mechanism, possibly
providing for additional benches during the transition
phase
Lenient approach by the authorities in invoking penal provisions during the initial phase of implementation
Less than 10 percent
10-50 percent
Above 50 percent
38%
43%
19%
Some numbers may not add up to 100 because of rounding off
Section D: BMR Advisors-Business Today GST Poll
42
REFERENCES
First Discussion Paper on GST (2009) http://cbec.gov.in/htdocs-cbec/gst/gst-ec-state-finmin
122nd Constitution Amendment Bill, 2014 (2014) http://cbec.gov.in/htdocs-cbec/gst/gst-constn-amend-bill
Report on the Revenue Neutral Rate and Structure of Rates for the Goods and Services Tax (2015) http://cbec.gov.in/resources//htdocs-cbec/gst/cea-rpt-rnr.pdf
101st Constitution Amendment Act, 2016 (2016) http://cbec.gov.in/htdocs-cbec/gst/gst-constn-amend-bill
Model GST lawhttp://cbec.gov.in/htdocs-cbec/gst/model-gst-law
Draft GST ruleshttp://cbec.gov.in/htdocs-cbec/gst/draft-rules-format
FAQs on GST http://cbec.gov.in/htdocs-cbec/gst/gst-ovw
CSO Quarterly Estimates of GDP for First Quarter 2016-17
IMF World Economic Outlook
World Bank Global Economic Prospects
Asian Development Bank - Asian Development Outlook 2016
OECD Economic Outlook and Interim Economic Outlook
FICCI Economic Outlook Survey
Dun & Bradstreet Business Optimism Index
HSBC Markit India Manufacturing Purchasing Managers' Index
CRISIL
GST will benefit India's consumption growth
India-Cyprus to agree to a new tax treaty http://www.firstpost.com/business/india-cyprus-agree-to-new-tax-treaty-heres-how-it-clears-uncertainty-for-investors-2866370.html
Ministry of Commerce & Industryhttp://commerce.nic.in/DOC/PressRelease.aspx?Id=6367
Ministry of Corporate Affairshttp://www.mca.gov.in/Ministry/pdf/CompaniesMediationandConciliationRules_10092016.pdf
Global Competitiveness Report 2016India's growth is outpacing China's. Here's how they did it - World Economic Forumhttps://www.weforum.org/agenda/2016/09/indias-growth-is-outpacing-chinas-heres-how-they-did-it
India's economy: Why the time for growth is now - McKinsey Global Institutehttp://www.mckinsey.com/global-themes/india/indias-economy-why-the-time-for-growth-is-now?cid=podcast-eml-alt-mgi-mgi-oth-1609
India's Economy after Rajan - Project Syndicatehttps://www.project-syndicate.org/commentary/india-economy-after-rajan-by-gita-gopinath-2016-06?barrier=true
India Economy, Politics and GDP Growth Summary - The Economisthttp://country.eiu.com/India
Modi Forges a Pragmatic Foreign Policy - Wall Street Journalhttp://www.wsj.com/articles/modi-forges-a-pragmatic-foreign-policy-1473353658
Three Takeaways On U.S.-India Defense Ties - Forbeshttp://www.forbes.com/sites/alyssaayres/2016/08/29/three-takeaways-on-u-s-india-defense-ties/#551eff677c61
43
INDIA'S ECONOMIC PERFORMANCE AND BUSINESS IMPERATIVES
BMR Advisors is a professional services firm offering a range of Tax, Risk and M&A advisory
services for domestic and global businesses. The firm enhances value for clients by focusing
on solutions that are innovative yet practical, such that these can be implemented. This is
achieved by blending domain expertise with analytical rigour while maintaining an
uncompromising focus on quality, and by hiring and nurturing high quality professionals with a
passion for excellence. The firm has won the confidence of numerous Fortune 500 companies
and has been consistently ranked amongst the top Tax and M&A brands by several
independent surveys. BMR is committed to making a difference to clients and to its people,
and seeks to deliver this through the integrity of its effort and by living its core values:
INTEGRITY
PASSION FOR EXCELLENCE
PERSONAL GROWTH
RESPECT
STEWARDSHIP
BMR and Community
BMR has a strong commitment to good citizenship and community service. Through the firm’s
‘Go Green Initiative’ we adopt environment friendly practices at our work place. The firm
actively supports the work of SOS Children’s Village, Indian Red Cross Society and MillionTrees
Gurgaon campaign.
ABOUT BMR ADVISORS
www.taxand.com www.translink-int.com www.kroll.com
OUR GLOBAL PARTNERS
OFFICE LOCATIONS
GURGAON: 22nd Floor, Building No. 5, Tower A, DLF Cyber City, DLF Phase III, Gurgaon 122002, India | T +91 124
669 5100 | F +91 124 669 5001 BMR House, 36B Dr RK Shirodkar Marg, Parel, Mumbai 400012, India | MUMBAI:
T +91 22 6135 7000 | F +91 22 6135 7070 Level 2 | Prestige Nebula | 8-12 Cubbon Road | BENGALURU:
Bengaluru 560001 | India | T +91 80 6642 0000 | F +91 80 6642 0001 No 37 | ‘Workafella’ | TTK Road CHENNAI:
| Alwarpet | Chennai 600018 | India | T +91 44 4298 7000 | F +91 44 4298 7001 601, Lunkad Sky Vista PUNE:
(Next Dorabjee’s Town Square), New Airport Road, Viman Nagar, Pune 411014, India | T +91 20 668 19000 | F +91
20 668 19000
44
Being consistently rated amongst top Tax and M&A brands in independent surveys, BMR
Advisors is committed to bringing relevant, meaningful and topical research. Our constant
endeavor is to publish industry-leading insights, collaborate to share knowledge and drive
thought provoking conversations which shape public policy in India.
India's Economic Performance & Business Imperatives – Previous issues
Disclaimer:thThe information contained in this report is for general information purposes only as on 20 October, 2016. While the
firm endeavors to keep the information up to date and correct, we make no representations or warranties of any
kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the
report or the information provided therein. All information contained in this report is acquired from publically available
sources and hence any reliance you place on such information is therefore strictly at your own risk and the firm
accepts no liability in relation to the use of the report. The firm reserves copyright of this report and hence, does not
allow anyone to sell, re-publish or re-distribute the report or derivatives thereof.
© Copyright 2016, BMR Business Solutions Pvt. Ltd. All Rights Reserved