India: companies' business easier thanks to the upcoming tax revolution

We have been talking about for some time now India and its enormous potential, but it is not always easy for companies to find the necessary information to understand what are the advantages and the business opportunity of this enormous market: today Italy is only the twenty-fourth commercial partner of India on a global level.

Nevertheless India has all the characteristics to be able to start winning projects: many economists and analysts speak of an imminent overtaking against China, the economy travels at a rate higher than 7% and the current Modi government is implementing a series of reforms precisely with the aim of unleashing the enormous potential of the country and deeply affect the economic and social system, facilitating business activities.

Among these, the recent and ambitious one GST legislation (Good and Services Tax, or the goods and services tax), which was defined as one of the most important tax reforms in the history of the country and which will enter into force on 1 July 2017.

WHAT DOES THIS LAW PROVIDE? AND WHAT ARE THE BENEFITS FOR COMPANIES?

It's about a reform that should standardize and simplify the complex Indian tax system and kick off a real revolution from a commercial and tax point of view: all taxes existing indirect, local and central will be replaced by a single lower tax, the GST. Today in India the tax system changes from state to state (a condition which causes significant slowdowns in commercial exchange as well as the payment of various taxes), but the introduction of the single taxation system will exponentially favor the business of companies who will therefore be able to carry out their commercial operations in a simpler and more direct way, avoiding the so-called "cascade effect" of taxation.

The effects of this reform will be many:

• there will be one further economic growth;
• it will be easier for foreign companies to operate in India, both in terms of Foreign direct investment that of operations import-export;
• the whole manufacturing sector and that of the services they will have important benefits.

WHAT CAN YOUR COMPANY DO? WOULD YOU LIKE TO KNOW MORE'?

Despite the great progress in terms of doing business, India is a country that still has some complexities: precisely for this reason, and in the light of the new law, it is appropriate for companies that already work in India, or that want to access the market, to know adequately the mechanism that regulates the new tax system.

Octagona, a leading company in Italy in business internationalization in India, can help you!

Octagona, present for 15 years in the Subcontinent thanks to its own head offices in New Delhi and Bangalore, is able to better support your business, building custom projects and witnessing your company with regards to all tax, legal, customs and administrative issues.

For more information on the law and about our activities contact us at the telephone number 059.9770184 or to the email address [email protected]: you will receive all the information you need.

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