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The proposed Goods and Service Tax will lead to the evolution of a harmonized tax system in the country. Successful integration of GST would give India a world-class tax system and will boost the tax collection. It will also end the pending distortions of different treatments to the manufacturing and service sectors. For example, after GST, a retailer can set off the input credit of CGST and SGST on procurement of services like rentals, freight, advertisement, which currently attract service tax, against the output tax levied on the sales of goods from his premise. With the introduction of GST, the issue of inability to offset the input taxes should get resolved. Change in the indirect taxation structure will impact all industry sectors. Starting from the taxes paid on raw materials by a manufacturer to the invoices raised by a retailer for an end consumer of a good – all steps of the value change will experience a change in how taxation takes place.
GST will have multifold impacts on ERP systems, some of them are anticipated in advance and some post implementation consequences remain unknown. Since the ERP vendors are rigorously preparing for the new GST environment, the rules must be followed and necessary changes be made in their business environment without causing inconvenience to their customers. In the due course of this transition, the vendors must test their preparedness on the following parameters.