…Experts deliberate at MANSA’s conference on new tax regime
MUMBAI: To ensure recovery of input credit under the new Goods and Service Tax regime, maritime entities will have to register their principals or agents State wise, else it remains a cost, says a release on 3rd June.“To the extent, we are unable to utilize the small percentage of input credit paid to our service provider, it will be cost for us and add to our operational cost,” experts opined at the conference on Implications of GST on maritime trade organized by Mumbai and Nhava-Sheva Ship-Agents Association held here.
So far, in the prevailing tax regime, shipping agencies had centralized registrations and were registering principals and agencies from where they operated. “Moving forward in GST, registration shall be taken for each State where the company has its activities/businesses. Inter-branch invoices or input service distributor registration would have to be explored for distribution and optimum utilization of input tax credit,” said the knowledge paper by Deloitte Haskins & Sells LLP.
The day-long conference had Deloitte Haskins & Sells LLP as Knowledge Partner and Lakshmi kumaran & Sridharan Attorneys as legal partner. Earlier, in the day, delivering his key note address, Najib Shah, former Chairman of Central Board of Excise and Customs said that as Indians, we must unlearn the old taxation system and re-learn the new regime.
Welcoming the power packed audience to the conference, MANSA, President, Capt Vivek Anand drew a parallel between GST with an elephant in the room with most blind people groping in the dark. He took the audience through the journey of GST since it was conceived 17 years back and conceptualized till date.
Speaking about foreign shipping lines, Capt Anand said, “Foreign Shipping lines will not qualify as `non-resident taxable person’ since they do undertake regular transactions of supply of service in India and/or they have fixed presence in India.”
Shipping companies and their agents will also have to pay reverse charge mechanism for inputs and for unregistered vendors. They will also have to make a conscious effort for the various services provided across the states and bill them accordingly.
“One of the foremost features of GST in India is that it will be an IT driven indirect tax system wherein there will be a much lower interaction with the departmental officers when compared with the existing regime. Matching of invoices issued by a supplier, with the invoices received by the customer is going to be a critical aspect for eligibility of credit to the customer,” said a white paper released by Lakshmikumaran & Sridharan Attorneys at the conference.
It requires no doubt a Himalayan effort initially by the Authorities as well as Trade for streamlining and stabilizing the migration but by apt digital technology in the long run it will prove to be a great boon for improving the Indian economy and the image catapulting it to higher levels.