July 1st, 2017 marked the beginning of a new era for the Indian economy as the GST bill was launched. With the biggest tax reform till date, a single, unified Goods and Services Tax has replaced multiple taxes such as VAT, service tax, octroi, etc. The purpose behind GST implementation is to simplify the tax structure and put a check on tax evasion. Though the long-term impact of the new taxation system is yet to be seen, businesses need to restructure themselves to adapt to the change. GST compliance is perhaps the biggest worry that enterprises are facing today. Once again, they can look up to their IT partners to come up with robust and reliable GST solutions. However, it is important to understand the new taxation system and the changes that would be needed post-implementation.
Changes That Businesses Would Come Across In The New Taxation Scenario
There would be numerous changes that businesses are likely to encounter after the implementation of the new taxation structure. Primarily, these would relate to the maintenance of records and business operations.
- Businesses of all types, including e-commerce enterprises, have to gear up for maintenance of massive records after the GST roll-out. Every single transaction would have to be recorded at every stage till the goods and services reach the consumers.
- At the same time, all the documents such as registrations, purchases, returns, refunds, etc have to be in an online format.
- Also, merchants would have to upload invoices and file monthly returns online.
- Moreover, there is a need to reconcile the sales records with bank details so that every transaction is accounted for.
Obviously, the entire system would go complex for businesses, particularly in the initial stages when things are still ambiguous. This brings the need to go tech-savvy and adopting an automated GST solution serves as the best alternative.
How Technology Can Assist A Business With GST-Compliance
Small businesses as well as big enterprises, will have to rely on IT providers to get robust GST solutions. An effective solution would focus on automation of the process of transaction recording. It would prepare the business for being compliant as 100% transactions would be recorded. There are two ways advised for this purpose, firstly to customize and update the existing software solutions and secondly, to have a new one designed. There may also be the need to evaluate the existing solutions and get the required upgrades or patches for compliance.
The implementation of GST is not only about economic reforms but about technological revolution too. Businesses can make a smooth transition by embracing technology solutions. At the same time, digitization will serve dual benefit as, besides making them compliant with the new taxation system, it will open up new frontiers for enterprises.