The migration to Goods and Services Tax (GST) is a high blood pressure-inducing move for businesses and accountants. Running short of breath, they depend on software providers to take care of their accounting, invoicing and filing needs. And they are just as stressed.
For Bharat Goenka, the 56-year-old managing director of Tally Solutions, the day starts at 6:00 am and doesn’t end before midnight. “We are sprinting in a marathon. It’s not something anyone can keep up with for long,” he says. But seeing a nation migrate to a new taxation system is not new. In fact, the GST rollout is one big flashback for him. “In 2005, when the country moved from sales tax to the Value Added Tax (VAT) system, we saw something similar,” he says. It was the same narrative then. VAT, too, was supposed to encourage businesses to go digital and bring more businesses under the tax net. And then too, the air was thick with confusion. “Even those days, people didn’t understand the law but they simply wanted to talk to someone who understood it more than them.”
Although GST may have set out to be ‘good and simple’, it is one of the most complex transitions for businesses. Clubbing 500-odd taxes to a one-tax system under GST was never going to be easy.
A countless number of modifications have already taken place. And the worst is still to come. A tidal wave of three billion invoices is expected to hit the network on 20 September. The big question is will the GST Network be ready to support the filings of returns? As one chartered accountant (CA) says, “The GST portal, till today, has not run continuously for 24 hours straight. I shudder to think what will happen when we file the returns.”
Fair to say that the software makers, whose presence businesses barely registered, are now suddenly most companies’ first line of defence. Those who need them the most are small and medium enterprises (SMEs). “SMEs have been the least ready for GST because they’ve been thinking that GST has anyway been in talks since 2006 so it will never get implemented. So they are surprised,” says Prabhu Govindan, managing partner at KPSN Consulting, a Chennai-based accounting firm.
As things stand today there are about 60 million SMEs in India, and only about 6.5 million are under the tax net, says Goenka. Unlike in the earlier tax regime when companies with a turnover of less than Rs 1.5 crore were exempt from filing returns, now even those with Rs 20 lakh need to file returns.
This means a legion of new SMEs could potentially adopt GST accounting and filing products. Will they pick the ubiquitous Tally that has changed little in all these years but somehow still stayed relevant or the newer savvier tech companies like Zoho, ClearTax and SAP (if the SME is slightly larger)?