GST Opportunity for IT Firms:

GST the biggest indirect tax reform since independence besides easing the process of doing business in India is also a business opportunity in itself. Let us look at the numbers involved to gauge the opportunity size:

·         Businesses covered under GST: 6.5 to 7 million

·         Banks involved: 400+

·         Department Officers (users): 66K+

·         Tax Professionals (CA, TRPs etc.): 2 Lakh+

·         No. of Invoices uploaded per month: 5 Billion+

Under GST, businesses would be uploading invoice level data every month as opposed to filing of summary data in the form of returns practiced currently. After ‘Aadhar’ project, GST is the second biggest IT project by government. GSTN (GST Network) is the nodal agency for implementing the IT backbone and M/S Infosys has won the contract for rollout, implementation and maintenance for 5 years. GST is unique by considering IT strategy at the core of GST rollout.

Areas of interest:

• 1.      ERP-cum-Accounting packages (Online/Offline, Desktop or Smartphone based) that enable SMEs to record GST transactions, upload invoices and do return filing.
• Ex: ERP, POS billing software, accounting software
• 2.      Payment solution providers (online, smartphone based apps etc.) as over 10 Lakh crore rupees worth of payment transactions will be made in the context GST.
• Ex: Payment gateways, Digital wallets, banking apps etc.
• 3.      DSC providers. Every invoice uploaded has to be digitally signed by the dealer leading to a huge business opportunity for providers of digital signature of e-sign capabilities. Usage: 80 lakh dealers uploading in excess of 5 Billion transactions a month.
• Ex: e-Mudra, e-Sign etc.
• 4.      Storage services: The central government and various state governments would require huge storage capabilities to hold transactions data for millions of dealers for at least a few decades.
• 5.      Security services: The granularity of business data makes it highly sensitive and sharing over internet would expose it to possibility of leakage. Security service providers will be in demand from businesses, ERP/POS providers, Payment solutions and others as well.
• 6.      App developers: Various processes under GST such as Registration, Returns, Payments and Refunds would necessitate development of suitable Desktop or Smartphone based apps which can be integrated by dealers with their existing solutions or used standalone.
• 7.   Data analytics: Central and state governments would need a host of data analytics and automation tools to derive meaningful insights, provide compliance ratings to dealers and make policy decisions. Hence providers of big data analytics tools and services would be in demand.
• 8.      Tax Professionals: Chartered Accountants, Cost Accountants, Tax Advocates, Sales Tax Practitioners and Company Secretaries are crucial to successful rollout of GST. They would need specific tools for processing bulk dealer data, uploading and filing of returns, making payments etc.

Thus GSTN would promote an entire ecosystem around GST for providing IT products and services. The inherent API architecture at core of GST system would enable IT firms large and small to participate with ease. With an hourglass architecture GST system aims to act as a platform with a minimalistic G2B portal and all the applications need to be built by private players using APIs. All such forms would be called GST Suvidha Providers or GSPs in short.

Minimalistic Qualifiers:

·         The company providing GST solution should be based out of India or have a registered office in India.

·         Any GST data should not flow outside the geographic boundaries of India (that is data centre to be located within India)

·         STQC or empanelled third parties would certify the meeting of data security requirements.

The API services would be offered free during the first year of GST rollout! 

(Views expressed are strictly personal)