Impacts of Goods & Services Tax (GST) Bill On NRIs

Goods and Services Tax (GST) was introduced in India on July 1, 2017, to eliminate various indirect taxes (such as Service Tax, Sales Tax, Central Excise Duty, VAT, etc,) and implement a single taxation system on both goods and services all across the nation. Since its implementation, It has generated a positive momentum in India and impacted the people and business organizations working in different sectors. Due to GST, there is a significant change in the pricing of several goods too. Just see the chart below to understand the impact of the GST.

GST has benefited customers in many ways. 16 million Non-Resident Indians (NRI), who do business and make financial transactions in India, are also in an advantageous position. The implementation of GST in sectors, such as cement, multiplexes, DTH, film production, automobiles, warehousing, logistics, etc, will make India an attractive country for NRIs who want to do business in these sectors.

Some major effects of GST on NRIs are highlighted here below-

Positive Effects

(a) A single taxation system is good for investments. GST will decrease the actual cost of real estate projects. It will also encourage more and more people to boost investment in the property sector, making it easier for NRIs to buy good homes in India at affordable rates.

(b) GST will bring clarity in the tax system and avoid the double taxation system. It will keep NRIs from multiple taxation or indirect taxes when they move one state to another to expand their business.

(c) As NRIs live in foreign countries, they have a little knowledge or control over the taxation system in different Indian states. GST brings uniformity and transparency about the taxation process in India. It helps NRIs to make business transactions easily and quickly in the country without having any suspicion in mind. International law firms India can be a helping hand for you if you are willing to invest in India as a businessman and make your tax liabilities reasonable.

(d) As GST discourages tax evasion, NRI will be able to make transactions with only those business organizations or firms that have paid their taxes off. It reduces the corruption level and creates a positive environment for doing business in India.

(e) As GST is not applied to goods and services exported from India, so, NRIs involved in export business will get benefited up to a great extent.

(f) The government has reduced the price gap between organized and unorganized sectors by including the unorganized sectors under a common tax regime.

(g) GST has simplified the NRI’s investment process and improved compliance of business laws by NRIs.

Negative Impacts:

Due to the implementation of GST, it will be costly for NRIs to send money back to the home country. The government of India will impose a 12.36% service tax on the fee or commission given by agents to send the remittance amount to India. You can seek the help of Tax Law firms in India to understand the different tax provisions of GST and its application in your industry.

Concluding Remarks

GST has impacted the people belonging to all categories and business organizations. Here we discuss the impact of GST on NRIs and highlights how it brings and positive results for them. If you are an NRI, keep the above-mentioned things in mind and do business easily in India.

Source: http://www.apsense.com/article/impacts-of-goods-services-tax-gst-bill-on-nris.html

Michael Brown is an experienced law marketing specialist working with Ahlawat & Associates (expert mergers and acquisition lawyers).