In a paper published by BCG and IAMAI (http://www.bcgindia.com/documents/file180687.pdf ), we see a fantastic growth in adoption of internet amongst Indian citizens. So should this mean adoption of IT amongst corporates is also on the rise?
The answer is “Yes”. The advent of GST will see a marked rise of digital usage in India Incorporated. While the larger conglomerates are in an advanced stage – be it having business application software to help run their businesses, or specialized digital shops, there exists a large group of enterprises in the mid and small segments who either have no IT infrastructure in place to support their businesses or are in a very nascent stage. This set will require getting on board specifically from a compliance point of view even if they are managing their businesses manually.
The Ministry of Finance has set up a special purpose vehicle – GSTN that will be the IT backbone of the new tax regime handling online everything from registrations, determining and awarding credit, filing returns, to audits and disputes settlements.
GSTN is a mega digital tax office for indirect tax assessees, administrations and service providers (or Suvidha providers). More details regarding the organization, set up and operations are available at their website ( http://www.gstn.org/ ). This robust system is the backbone of the tax reform, and it will provide a common and shared infrastructure for all tax administrations.
Thus the tax reform will have a large social and economic impact where the focus is on providing a convenient and user friendly experience to help adoption and overcome human resistance. The potential usage is pretty huge – close to 70lakh ~ 1 crore tax payers will be onboard.
Apart from registering online, all registered buyers and sellers must upload their sales invoices, and their purchase invoices onto the GSTN portal. Periodic returns as will be prescribed by law must also be filed online. GSTN may provide all registerd buyers and sellers with a predefined dash board so that data can be viewed and downloaded.
IT adoption to manage businesses and / or compliance which hasn’t been very encouraging, will receive a thrust with this legislation.