Teething problems

GST puts a great deal of dependence on compliance, wherein item-wise details of all supplies would need to be uploaded to the GSTN portal. This is going to be a challenge, especially for SMEs who will find it difficult to meet documentation and other statutory requirements according to the GST ecosystem.

Creating a balance between various segments of industries may not be easy as the entire compliance process is online and it is resulting in a varied incremental burden for different classes of businesses. Hence, optimal synchronisation of GSTN with taxpayer’s enterprise resource planning (ERP) or accounting packages is the need of the hour to make life easy for businesses.

Though large ERP suppliers had released GST-specific solutions, last-minute changes in the law had new patches getting released even during the hours when GST was going live.

So it’s imperative that whatever we have done to make our systems compliant, our existing ERPs should be tested and retested in the days to come so that the niggles are sorted out without much business downtime. Also, one needs to check the accounting entries from an audit perspective.

Several organisations would have gone live on GST without all the master data (especially, Vendor Master, Item Master, HSN/SAC codes) in place. So, we need to keep updating our master data so that in the days to come we have the complete master data in place.

While the Government has given two months for the first return to be filed (September 5 for a consolidated return for July) and subsequently complete return to be filed on September 20 for July and August, we need to rush and get our compliances in place. However, businesses should not relax as many practical scenarios will evolve over the next two months, and the first return needs to be filled diligently.

So, the next important requirement is to choose a GST Suvidha Provider (GSP) or Application Service providers (ASP) (if we have not done yet) and get the accounting and ERP data in sync with the return requirements and subsequently prepare the data sheets in the systems. SMEs can do the compliance directly with GSTN if they don’t want to go through the ASP/GSP route.

Organisations are very concerned about ensuring security and integrity of data and keen to know how ASPs and GSPs will interact with ERP systems while extracting transaction records. We have a deeper understanding of how the data will flow back and forth between the systems and how the checks and balances are created to keep the data secured from all possible aspects.

On the one side of the coin, small taxpayers with inadequate infrastructure may find the compliance process difficult. GSTN has recently proposed the facility for filing of offline returns which can be availed from July 17.

However, its efficacy can be only tested after the facility is made available. On the other the side, large corporates are grappling with a new set of tax rules, aligning processes, automating tax computation and, finally, reconciling all the input and output invoices.

The offline facility may not be very handy for these organisations. Naturally, there would be several teething problems which are inevitable as a new system has been implemented.

The writer is Partner-Technology Consulting (GST Transformation), PwC India. With inputs from Roshan Gupta. The views are personal