PREPARING FOR NEW REGIME Experts say subsidiaries created to avail of excise duty incentives will be irrelevant, and mergers will help reduce compliance work Various companies are rushing to merge their subsidiaries with themselves ahead of the implementation of Goods and Services Tax (GST) to reduce tax, operational and administrative costs and to eliminate multiple legal entities. At least 100 companies, such as Asian Paints, Sun Pharma, L&T, BPCL, Sundaram Finance, Religare Enterprises and Arvind, have announced the merger of their subsidiaries with the parent in the last three months. Many of the companies had created multiple units in the past to save on taxes but such incentives will cease to exist under GST. “With the implementation of GST, all the tax planning and tax savings structure would be invalid and those subsidiaries which were created for availing the excise duty incentives will be irrelevant,“ said Sachin Menon, headindirect tax, KPMG. “GST would also curb sc