CXO Talk: Preparing for the GST roll-out

Industry stalwarts share some perspectives on the game changing tax reform and how they’re gearing up for the transition. By Satyaki Sarkar

July 1, 2017 is a day etched in many people’s minds. It’s the day earmarked for the roll-out of the ambitious Goods and Services Tax (GST) Bill. Industry leaders across verticals have been weighing its impact and ramifications, and discussing how best to adapt to it. Most see it as a positive step that will boost economic growth and the reduce inflation rate. We spoke to five technology and business leaders to get a better understanding of how India Inc is approaching it.


Vijay Sethi, CIO and Head CSR, Hero MotoCorp Ltd
“We started our GST preparation almost more than eight months ago, and since our organisation uses ERP to make the production process more organised, that is the first thing that we had to make GST ready. After that was done, we formed our own internal GST council, and provided extensive training to our team on what GST exactly is, and everything they should know about it. It is not just about our own team, but even our stakeholders, vendors, dealers, and everyone else who would be affected. So we have had elaborate discussions with all of them to figure out how to be ready for the changes. All the necessary steps that can be taken at this stage have been taken, and we expect that by June 25 or so, we should certainly be ready for GST. One of the major challenges continues to be the lack of clarity regarding the law, while the other is that the Goods and Services Tax Network (GSTN) itself is still not ready, and hasn’t released the final system as of now. There are quite a few moving parts, and it is only after the law has been passed that things will become clearer and settle down. It will significantly enhance the IT processes of every organisation. The first few months will see quite a bit of turbulence, yes, but once things settle down in a few months, it will definitely lead to a huge increase in transparency and productivity in the system, besides cutting down costs.”

K Satyanarayana, Co-Founder and Director, Ecom Express Pvt Ltd
“We have been preparing for GST for quite a while now, so as to get our systems working to meet the compliance requirements. However, having been in the valuechain business we have been GST compliant from the start. As such I do not need to make any changes in our infrastructure, only in the strategic processes. On the compliance side, we are working to be aligned with the customers in terms of the changed taxing structure. We have appointed a consultant to help us get ready with the state level registrations, do a complete workaround of the system, and also guide us through the implementation of GST so that we can be ready on time. After GST is implemented the entire taxing model will become centralised and consolidated into one. Thus, we will have a single filing of returns, single registration, and so on. This, in turn, will lead to all 30 states (that we operate in) being governed by a single administrative body, making all of them synchronised. Transport, logistics, and distribution will become completely streamlined. Tax levels will also be changing, and being a logistics provider, we will have to see the rates charged in various states to understand the full impact of it.”

Jayantha Prabhu, Group CIO, Essar Group, and Head – India Business, AGC Networks
“We’ve spent the last six months preparing for and making ourselves ready for GST implementation. Since Essar is a global conglomerate and we have multiple verticals like steel, oil, power, shipping, BPO, retail and more, there are a number of different steps we have taken. We have already completed the technical upgrade part, and now we are modifying the SAP software and have started applying it to the organisational functions. Besides this, we have also started identifying the GSP and ASP provider and are also working with a separate team on the business transformation side. The business impact of GST is going to be huge, and everything from the depots and selling posts have to be re-engineered. One of the biggest challenges is getting clarity from SAP and the government’s side, and implementing measures to adapt to the changes in the limited time that we have. We have set up a control room, and the critical taxation team is working closely with the IT team to analyse the probable impact, the processes that need to be changed, and the kind of support that is needed from IT. The work is on continuously and we have a lot to do in the next one month.”

Rajesh Uppal, Executive Director – IT and CIO, Maruti Suzuki India Ltd
“The thing that nobody in the industry will admit is that at this stage there is not a single organisation that can claim that they are actually GST ready. We are all making preparations for it, but the ultimate impact and how to deal with it is something that we will have to figure out only after it has been passed. However, I can say with confidence that the steps we are taking for it will certainly reach completion before July 1. We have developed a research base to identify the implications that GST would have on the business, how it would change the tax structure completely, and affect our supply chain as a whole. Our entire value chain has been built to be GST compliant. At this moment the biggest challenge we still face is that some of the government’s strategies are still not that clear, and that is something that makes preparing for it very difficult. However, going forward, I feel that GST would bring about a positive impact on the country’s economy and businesses. Our tax management wil become a lot simpler and this reform is going to have a far-reaching impact on the industry. While the road might be a bit rocky at first we will be able to sail through smoothly enough as an organisation.”

Kamal Karnatak, Group CIO, RJ Corp
“We have been preparing for GST from two angles. One is from the business side, and the other is from the IT side. On the former, we are calculating the impact it would have on processing, sales, and even purchase of materials. Where the IT landscape is concerned, we have set up an analysis panel to check the impact of GST while we are purchasing or selling something. Also, the government has introduced GSP and ASP, which we would be using to understand how returns would be filed post GST-implementation. Several things are still taking time, as far as the process of preparation is concerned, especially because the government hasn’t clarified the rates and rules implicitly. Because of this even IT companies aren’t being able to release their patches, and report formats and return filing methods aren’t finalised. However, I feel that in the long run it is definitely going to have a positive impact on business. It would make tax filing easier, consolidation of taxes would help prevent tax evasion, and it would eventually help the government even lower the tax rates due to proper filing.” 

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