‘There is need to transform outlook’
Corporates are now realising that coming to terms with GST means a more drastic change to their tax infrastructure than the basic compliance-related changes they have made so far, Vishal Parekh, regional head, South Asia, Thomson Reuters said in an interview.
“In the last several months, we have had discussions with CFOs and tax heads, and post one year of GST, there is a very different mood around tax and finance,” Mr. Parekh said.
“The entire focus was in just trying to get a infrastructure in place so that there was compliance in GST.”
Using tech teams
Most IT companies had either people on the bench to help them get their returns in place or had utilised their existing bandwidth and teams in their technology departments to help get them through the compliance process.
“Now that the one year has passed, there is a growing realisation that without having a systematic way to deal with this in terms of processes, workflows, and technology, this is not sustainable,” Mr. Parekh added.
“That’s where we have seen a growing awareness, that where they are today is good for the first year of GST, but that they really need to start thinking about a transformation in the way they look at tax.”
This transformation, he explained, means different things to different companies.
Mid-to-large segment companies, for example, could be looking at simply upgrading the GST module of their existing tax and finance infrastructure.
“Some others, which are fairly global in scale, are looking at their entire workflow and seek to upgrade their entire tax workflow, be it direct tax, transfer pricing, indirect tax, compliance, and they want to automate all of that in one go, even if it takes two years to do so,” Mr. Parekh said. Compliance in India is likely not a harder process than in other major tax jurisdictions, Mr. Parekh added.
“The US and Brazil when it comes to indirect tax and sales tax, are probably some of the most complex jurisdictions I have seen,” he said. “Tax in today’s world is complex everywhere. In India, with GST coming in, I think a lot of people would argue that it has become easier as they don’t have to deal with excise duty, checkpoints, octroi tax.”