Is India’s IT Infrastructure Ready For GST?
The Goods and Services Tax (GST) brings about radical reforms in indirect taxation in India. The reforms particularly affect enterprises. They need to know a number of things for a business: taxes, tariffs and rate slabs, procedures for calculation and compliance. Apart from the input tax credit provision, there are several other factors in the GST, which would need time to be incorporated in business solutions. Those factors include destination system, twin rates, exclusion, etc. New multiple GST-compliant modules for the enterprise resource planning (ERP) software. Similarly, the ERP needs to be synchronized with supply chain models to support inventory supply management, an integral part of warehousing and manufacturing companies.
“There are eight parallel tracks going on in the group. It has caused huge amount of pressure on the IT teams. In my journey, it is probably one of the toughest projects as far as IT is concerned. For example, I am personally looking after the entire project on GST for the whole group. There are 54 legal entities, 70+ GSTIN IDs, almost similar number of locations. There are issues like supplier integration, customer presentations, internal preparation, dedicated supplier training, etc. We have to indulge in huge data collection process for the suppliers, dealers, and customers. This is, to me, a countless job with never-ending closure. It requires huge efforts with very little results,”says a CIO from a large Auto Ancillary Conglomerate.
According to a survey by DynamicCIO, 66% CIOs say they are not GST-ready and need time to ensure compliance. Most of the CIOs said that the GST rollout will impact their lives to a large extent. As many as 90 % believe that the new tax law has or will impact their lives to a large extent (68.18 %: greatly (needing overhaul of the software). Around 68.18 % of CIOs said that the GST rollout will involve a lot of changes to the existing systems and business processes and may even entail acquisition of new hardware and software, along with a new approach to taxation.
“There is the GSP/ASP/GSTN data upload/reconciliation and a host of other activities for, which even basic testing is pending in most enterprises. A lot of companies are yet to decide whether to go for a GSP who is also an ASP or decide an ASP and then see preferred GSP or vice versa,” says Vijay Sethi, CIO, Hero Moto Corp.
Only GST-registered enterprises will be able to claim the tax credit as an integral part of the day-to-day business activity. No wonder, enterprises are in a hurry to ensure compliance. However, that is easier said than done.
“I expect lot of work for IT teams for the next 3-4 months, as there will be lot of learning that would need to be incorporated after the rollout. As users come out with more business scenarios that were not thought through during earlier rounds of testing, there will be work to be done. IT has to work to incorporate clarifications regarding various rules. Will the data downloads and uploads be as smooth as being projected by most ASPs/GSPs, I think one should just go back and look at most software implementations, despite best of global vendors and multiple rounds of testing, there are plenty of bugs,” adds Vijay.
Only time will tell how successful Indian enterprises are in adapting to the radical new tax reform.
- Weekly Rewind: Top 10 Stories On CXOToday (Jan 15-20)
- WhatsApp Launches ‘WhatsApp Business’ For Small Businesses
- Is It Time To Say 'Goodbye' To Passwords?
- The Promise Of Cognitive Computing In India
- Weekly Rewind: Top 10 Stories On CXOToday (Jan 8-13)
- Top 5 SMB Tech Trends To Rule In 2018
- Hyper-Converged Infrastructure To Accelerate IT Transformation
- 2018 Will Be The Year Of The Hybrid Cloud
- Indian Railways On Track To Bigger Tech Innovation
- Indian Cos To Heavily Invest In Cyber security This Year