Indian IT Industry Taps Into GST Opportunity
The Indian IT industry is leaving no stone unturned to tap into the humongous opportunities arising out of the Goods and Services Tax (GST) rollout effective 1 July. The IT companies have opportunities for developing a point of sale (PoS) billing systems, payment solutions, ERP solutions, e-signing products, among others.
The Goods and Services Tax Network (GSTN), a nonprofit non-government company, will act as the IT infrastructure backbone and provide shared IT infrastructure and service to both central and state governments including taxpayers and other stakeholders. It will be the interface between the government and the taxpayers providing all front-end services like registration, returns and payments. The GSTN has, in turn, selected 34 GST Suvidha Providers (GSPs) to provide an additional channel of filing returns and other compliances related to the GST.
In 2015, IT services major Infosys bagged an order worth Rs 1,380-crore from the Centre to build technology infrastructure for the GSTN. Under the terms of the contract, Infosys will also operate it for five years after making it ready. This year on 12 June, Infosys' CEO Vishal Sikka met Finance Minister Arun Jaitley to discuss the company's preparedness for the GST rollout. Two days later, Infosys announced a strategic partnership with specialist IT services provider Bodhtree Consulting which will act as an Application Service Provider (ASP) wherein the clients of Infosys will have an option to utilise the GSP platform of Bodhtree Consulting for their GST filings. The size of the project is estimated to be over Rs 200 crore spread over a period of three years.
GSPs and ASPs will together provide the much-needed support to taxpayers in the IT ecosystem for GST filings and other related GST compliances. ASPs will focus on taking taxpayers' raw data on sales and purchases and converting it into the GST compliant returns. These GST returns will then be filed on behalf of the filer with GSTN via Bodhtree, as GSP. ASPs will act as a link between the taxpayers and the GSPs.
Even global MNCs are not missing out on the opportunity to capitalise on the GST rollout. For instance, during its recently-concluded maiden OpenWorld event in India, Oracle announced the availability of Oracle Enterprise Resource Planning (ERP) Cloud in India to help local and multinational firms operating in India prepare for the GST. "Oracle ERP Cloud delivers built-in features to facilitate compliance with new GST regulations, provides native support for GST Network integration and reporting, and support for local requirements including withholding, payment processing, and statutory reporting," the company said.
To ensure a seamless customer experience, Oracle released their GST solution in a phased manner beginning November followed by March and then the latest update in July. "Whenever there is clarity on a particular law, we release that part," said Ajay Kumar, Director, Sales Consulting - ERP, Oracle India. "Customers are at different levels of maturity…but if you give them a good value proposition, they are willing to invest in GST-related technologies."
In the same month, Reliance Corporate IT Park Ltd (RCITPL), a subsidiary of Reliance Industries, signed a Memorandum of Understanding (MoU) with German technology major SAP to launch 'SARAL GST' solution for taxpayers in the GST regime. SARAL GST will leverage the expertise of RCITPL as GSP and SAP as the ASP.
"GST is not just a tax reform but is an unprecedented opportunity for companies to improve functional efficiencies and realise increased profitability," says Neeraj Athalye, Head, S/4HANA & GST Adoption Drive, SAP India. "Besides helping businesses get compliant with the new law seamlessly, SARAL GST will also enable them to benefit from the GST vision."
Recently, compliance solutions company EasemyGST partnered with Microsoft India to enable customers, mainly SMBs to comply with GST in a secure manner. EasemyGST's cloud-based GST compliance platform will integrate its solution with Microsoft's key business products including Office 365, Dynamics Navision and Axapta. EasemyGST runs on Microsoft Azure's India data centres to ensure data sovereignty.
Speaking about the partnership, Bertrand Launay, COO, Microsoft India, said, "The integration of EasemyGST with Office 365 enables customers to become GST compliant in a timely and effortless fashion. Microsoft's trusted cloud principles will further ensure security and better control of the tool for the businesses and enable them to be a part of this new wave of tax transformation further facilitating the government's Digital India initiative."
DATA CENTRE OPPORTUNITY
Cloud-based service providers are also expected to gain from the huge storage requirements arising out of the GST. "While the application will be in the front, the storage bandwidth in the backend will be so massive that no single provider will be able to do it. It's a manifold business opportunity," says Seema Ambastha, Senior VP - India & Global Business at Netmagic.
In preparation for the GST, Netmagic (an NTT Communication company) is upgrading its overall capacity, government community cloud, and managed services capabilities. By April 2018, Netmagic is set to make operational two new data centres, one each in Mumbai and Bengaluru, thus expanding its total floor space from 600,000 sq. ft. to 1.2 million sq. ft.
Pi Datacenters also feels that with the GST rollout, the governments would require significant storage capacities to hold transactional data for millions of businesses of all sizes for decades. "In line with the rise in storage capacity requirement, significant requirement of computing environments (platforms) for test and development of GST compatible application is foreseen. For data centre service providers, tapping into this surge in demand would be key. The enterprises would require a secured turnkey environment to ride on, for their new GST ready applications to run," says Mohan Kumar, CFO, Pi Datacenters.
