Not Complying Yet? Modi Government is watching you
Before the decision to demonetise the currency, Modi Government gave amnesty and legal path to declare black money. Suddenly out of nowhere came the decision to demonetise. The impact was sudden & sent shock wave across the nation.
Everyone was talking about black money and whether any government was serious about doing anything with it. Regardless of its implementation challenges, the intent was strong enough for people to take this government seriously.
The same resolve was seen in dealing with the issue of GST. With the launch of one nation one tax, the tax system in India is destined to be simplified. The confusion related to multiple tax systems means that tax evasion will become easy to track. The tax evasion will become difficult and compliance mandatory. Once GST is launched, the companies will scramble to get their systems and processes in line with the new tax code. Compliance will become a much higher priority and the cost of compliance will increase exponentially.
PM Modi is very likely going to implement the much awaited labour reforms. After the assembly elections there is no reason for him to defer that any further. Some back door negotiations with the trade unions have already started to address their concerns related to the reforms. Once the labour reforms are in place, compliance will become number one priority for the companies.
Given the way PM Modi has come hard on the black money issue, especially his determination to go after those who have tried to hoodwink the demonetisation scheme, it would not be wise to stay non-compliance under his tenure. Stakes for companies are too high as companies cannot get compliance backdated and the penalties can be compounded from the date of non-compliance. Even the Companies Act 2013, mandate that the directors must ensure that a proper system is in place to track and manage compliance.
It is therefore very critical for companies to get compliant. It is a smart thing to do as it will increase their competitiveness as it will prepare them better than their competitors to handle the impact of incoming compliance regulations.
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