1. GST – Impact & Challenges IT/ITeS Sector

2. Indian IT/ITeS Industry - Background
Size – Rs. 10 lakh Crs (USD 160 Billion)*
Exports- Rs. 7 Lakh Crs ( USD 110 Billion)*
Countries : 670 offshore delivery centers in 78 Countries*
Employment* :
37 lakh direct jobs
63 lakh indirect jobs ,
1/3 Women workforce
Largest contributor to the forex earning of the country
* For FY reported by Nasscom

3. GST Advantage PAN India Common Rules, rates and procedures
Input credits available for States & Central tax paid
Except: Rent a cab, construction related, employee welfare and free supply
Certainty in applicable indirect taxes
software licenses deemed to be service- entry 5 (c),(d) & (f) of schedule II of CGST Act.
Zero rating for exports and SEZ units.
No tax on exports/ supply to SEZ under bond/LUT u/s 8 (1) of IGST Act
Technology based tax compliance system.
GSTN, GSPs, ASPs

4. GST downside
Increase in effective rate of tax for domestic business by 3%
Additional working capital requirement
Output, Reverse charge payment in cash & non availability of credits for certain supplies
Multiple registration- additional compliance cost
State-wise registrations, separate registrations for SEZ units/developer
STPs/EOUs are no more attractive
Only BCD exempt on allowed procurement
Export and SEZ supply zero rated only when made under Bond or LUT
Full input credits with no tax payable on output U/s 8 (1) of IGST Act & Rule 96A of the CGST Rules
Exporter to bring money in convertible foreign exchange within 12 months else pay IGST
Rule 96A of the CGST Rules
Treatment for amount received for breach of contract
On Notice pay recovery, breach of bond GST payable.

5. GST challenges
Complex procedure to avail Input credits – mismatch, capital goods
Rule 36 – credit against tax invoice, bill of entry, invoice for RCM paid, Rule 43 common capital goods and Rule 69 Mismatch of credits
Transitional issues: tax on stock, invoices of received post GST carrying old taxes, old credit notes, GSTN portal initial issues.
Increase in Refunds amounts
No zero rating for STPs, EOUs, No deemed exports, increase in rate of tax by 3%
Identification of and compliance for purchases from unregistered persons
Petty expenses, RCM on reimbursements claimed by employees
Self invoicing and payment voucher
Classification, HSN, tax rates
Cross boarder transactions
Branch to head office and vice-versa, exports & liability under reverse charge
Treatment for services provided to employees
Health insurance, transportation services etc where recoveries are made from the employees

6. E-Commerce Sector

7. Indian E-commerce Sector
Very promising upcoming sector –
USD 30 Billion in 2016 expected to touch USD 100 Billion in 2020*
Large players like Amazon, Flipkart, Snapdeal, Tata CLiQ in retail, Services aggregators like Ola, Uber, Airbnb, OyO Rooms.
Online digital services platforms: Coursera, iON digital Hub etc
Attracting large foreign investment
Startups & young entrepreneurs
Innovative ideas, identifying customer pain points, use of technology
*IBEF report 2017

8. Special compliances for ecommerce operators
Compliance obligations for E-Commerce operators
Section 52-Tax Collected at Source, compliance –GSTR-8,
non-resident operators to take registration,
TCS issue on Cash on Delivery transactions
For notified Services provided ecommerce operator is required to pay tax on services supplied through the online platform
Section 9 (5)
Compulsory registration for persons supplying goods and services on e-commerce platform
Section 24 (ix)
Tax on Goods Returns

9. Q & A
Thanks