The Goods and Services Tax (GST) has been launched in India and we can feel and see the affects of this gigantic tax reform which affected every part of economy no matter how big or small. The well-reputed Information Technology (IT) sector of India which is the reason of the various IT revolutions and developments also come under the reach of GST. By removing the cascading of taxes and replacing the various indirect taxes with a single GST, this tax reform has simplified the tax structure of India and IT sector has positively affected from this reform.
The association of Indian economy with Information technology (IT) is very well aware of all the changes upcoming along with the GST and has also issued a warning that serves not to take the information technology in an simple way as it adds to the economy in a very intense proportion.
Updating Business Software
The greatest obstacle is in changing the IT systems which require coordination between assess specialists and innovation groups. Much of the time, a portion of the ERP programming that were given by the IT majors must be upgraded and refreshed with the new GST rules. Organizations are for the most part overhauling their enterprise resource planning (ERP) and accounting software to oblige the complexities of calculating GST. It is possible that they have to redesign their current software to the new form or utilize particular GST software.
Taxability of Installing New ERP
Organizations introduce their accounting software and ERP in groups. For instance, ERP usage is done in batches. It is a long haul contract which spreads over years. ERP experts comprehend the necessities of the business; design the product in that way. There will be the periodic supply under the GST and will be taxed accordingly.
Software Developers and Sellers are affected by GST –
There is a race for all technical organizations to build up GST software. GST will affect these organizations emphatically by opening a tremendous market in India. The dire demand for GST software by every one of the organizations will mean a gigantic lift to the software developers.
Export of IT Services –
Because India is one of the biggest exporter of IT services in the world the export of information technology is affected by the GST. The IT services which are exported by India are the important source of foreign exchange. With coming of the GST the export of the IT service will get benefit.
Freelancers get the benefit from the GST –
Specialists offering IT services, for example, planning, application designing, website designing and so forth. Prior paid a service of 15%. This has now expanded to 18% under GST.
In spite of the fact that the GST rate for services has expanded to 18%, IT industry will profit by GST, because of the enormous raise in the sale of the software. Different variables like accessibility of ITC will cut down the working expenses and consequently, it will expand the general profitability of the IT sector. Yes we get a win-win situation for the IT sector because of GST.