How Businesses Will Gain From GST’s IT-Focused Approach – CXOtoday.com
Easily one of the largest and most eagerly anticipated tax reforms in India, the Goods and Service Tax (GST) bill has dominated business-related conversations in recent times. With the tax replacing 17 indirect taxes and several hundreds of different rates across 29 states with just five common tax slabs, everyone – from manufacturers, SMEs, and distributors to retailers and end-consumers – has discussed and debated its implications, benefits, and challenges in great detail. But even as the GST dialogue continues to rage across the economy, there is one aspect of this momentous development that most stakeholders are paying scant attention to – technology.
The role of technology in enabling GST
Considering that indirect tax administrations under the Central and State governments are currently expected to cumulatively serve anywhere between 65 and 70 lakh Indian taxpayers every year on average, the scale that a reform like GST is targeting becomes apparent. But while meeting the demand for various services pertaining to indirect tax filing and recordkeeping cannot be an easy task by itself, what further complicates the situation is the fact that these administrations have all previously operated under different laws, regulations, procedures, and formats.
The GST rollout is expected to address this complicated tangle by leveraging technology to unify disparate tax regimes under a holistic and all-inclusive indirect tax ecosystem. A shared IT infrastructure which enables a single-point interface between the taxpayer and GST stakeholders has been readied to achieve this aim.
How Indian businesses will benefit
How does this help Indian businesses? For one, it facilitates unparalleled convenience pertaining to indirect tax filing. Businesses, particularly those operating across state lines, were earlier required to file their taxes separately to different regulatory bodies, which increased the documentation hassles for business owners. The GST will replace this multitude of taxes with a single tax. What’s more, businesses can register themselves on the GST portal using their PAN details and file their returns as well as process payments. This will not only facilitate a more seamless documentation and filing process for businesses across the country, but will also significantly bring down compliance costs. Logistical hurdles will also decrease, facilitating smoother flow of goods and services across the country.
What, however, is more significant is the focus on IT as an enabler of the GST rollout. The open data standards for API definition and integration with third-party sources defined by the GST network are bring leveraged by leading accounting firms like SAP, Oracle, and Tally Solutions, which are facilitating accounting solutions compliant with GST for businesses. The development of mobile applications that can generate invoices and process returns for extremely small retailers is also being encouraged to further increase the convenience and accessibility of businesses to the GST network.
Why IT readiness is the need of the hour
The major challenge in front of Indian businesses, in this scenario, lies in bringing their internal business infrastructure up to the same level of IT maturity and creating a future-ready system capable of meeting today’s requirements whilst accommodating for tomorrow’s demands. This will require significant expenditure of both time and money, but its eventual dividends will make this one-time investment a worthwhile business decision.
The ambitious vision of bringing an economy as vast and complicated as India’s under a unified tax blanket is fraught with challenges for all stakeholders. In every challenge, however, lies an opportunity. So it is with GST and Indian businesses. Businesses which utilise technology to adapt to this changing paradigm will be the ones driving the growth for the country’s economy, as well as themselves.
[Disclaimer: The views expressed in this article are solely those of the authors and do not necessarily represent or reflect the views of Trivone Media Network’s or that of CXOToday’s.
[Copyright By Rajiv Bhalla]