Between January and July, Vietnam’s exports to India reached US$5.94bil, up 10.7% year-on-year.
NEW DELHI: The Vietnam Trade Office in India, in collaboration with consultancy firm KPMG India, on Wednesday hosted an online seminar focusing on India’s tax policy adjustments and its impacts and implications for Vietnamese enterprises.
The event aimed to help Vietnamese companies grasp key policy changes and prepare appropriate response strategies.
Opening the event, Vietnamese trade counsellor in India Bui Trung Thuong noted that on Sept 3, the Indian government approved the new goods and services tax (GST 2.0), which will take effect on Sept 22.
Under the reform, the multi-tier tax system will be simplified to two main rates of 5% and 18%. More than 200 essential items including electronics, automobiles, medical equipment, footwear and household goods will benefit from tax cuts.
This is a landmark reform that promises to generate profound changes in India’s business landscape and will directly affect Vietnamese investors, producers and exporters in this market, Thuong said.
Ridhima Mehta, a tax expert at KPMG India, said GST 2.0 centres on simplifying tax structures, adjusting rates and modernising administrative procedures.
Fewer tax brackets will help reduce disputes and provide greater transparency and stability while digitalised registration, filing and refund processes will ease compliance for small businesses and exporters.
She highlighted that several sectors stand to gain, notably healthcare, education, textiles, agriculture, electronics and essential consumer goods. Conversely, coal and other polluting energy sources will face higher taxes to promote clean energy.
Meanwhile, life and health insurance will be fully exempt from GST, creating momentum for India’s insurance market.
For Vietnamese businesses, the reform not only helps to lower costs and boost competitiveness but also requires swift adaptation, Mehta stressed.
Firms are advised to adjust management systems, update enterprise resource planning software, review contracts, manage inventory carefully and devise appropriate pricing strategies to maximise benefits.
Between January and July, Vietnam’s exports to India reached US$5.94bil, up 10.7% year-on-year.
Key export items such as steel, textiles and plastic products are expected to gain from the new tax regime.
However, sectors like footwear, farm produce and aquatic products may face stronger competition due to India’s temporary refund scheme and domestic consumer goods incentives. — Viet Nam News/ANN
