As India readies itself for Goods and Services Tax (GST), a large number of companies will find themselves looking for software to help them comply with the new filing norms it requires. GST is the government’s attempt at tax reform and brings the entire economy into a single market. Unfortunately, this also means a lot of extra tax filing work for small businesses.
GST rolls out on July 1, 2017, so businesses don’t have a lot of time to comply with the new norms. Where there is a demand for technology, someone always shows up with the supply. In the case of GST, a bunch of firms are offering GST software that helps businesses comply with norms. GST rules require businesses to file tax returns thrice a month, and have four different tiers of taxes for different kinds of products. That’s why a lot of businesses are going to find themselves relying on GST software to ensure compliance.
ClearTax is one of the companies that offers such software and its CEO Archit Gupta says tax-related preparation and filing activities never happen in isolation, and this is a big pain point. “There are people that you’re always dependent on, for the accuracy and timeliness of your tax preparation," says Gupta. "This pain point is even more critical under GST - where the input tax credits that a business can claim are dependent on the accuracy and timeliness of its ecosystem.”
“A small business can work real-time with its tax expert on preparation or filing," he adds. " A large enterprise can work real-time with its ecosystem of vendors and dealers on its tax preparation and filing.”
He says that using ClearTax’s software, tax preparation firms can work with clients real-time to help them claim input tax credits. “This way, we make the software simplify reconciliation for accurate tax credits,” Gupta says, adding that this is one of the biggest pain points with GST.
ClearTax’s GST software integrates with “all accounting software” according to the company, which also added a free HSN code finder for GST compliant businesses, which helps them find the correct code corresponding to each product they sell. There are some companies such as Zoho, which have integrated GST features into their own accounting software. Zoho Books is an online accounting software that lets businesses “customise every aspect” according to business needs, the company claims.
Reshma Roy, head of marketing at Zoho Finance, says Zoho Books manages end-to-end accounting and pushes all transactions to the GST portal, so its users don’t need to use a separate app just for GST. The software has a lot of GST-related features such as generating GST compliant invoices and filing GST Tax Returns.
“Zoho Books is a GST ready accounting software with which you can manage your business accounting and file your GST returns - all of it from a single place,” Roy says. It’s a cloud-based accounting software so businesses can access their data on any device, wherever they are, she says. The app is a full-fledged accounting software and for Rs. 2,499 per year per organisation (plus taxes), it lets you manage all of your accounting needs.
SahiGST is another website that helps businesses ensure GST compliance. Its CEO Annkur Agarwal says companies like SahiGST have an opportunity in this market for the first time. “Largely the compliance software market in India is comprised of desktop-based apps," says Agarwal. "With GST, we feel for the first time, the government is truly moving the process online by making it API driven.”
He explains how the business has changed recently with the possibility of a shift to the cloud. “While mostly all traditional players are with a desktop solution (some adapting to cloud), SahiGST is amongst the 'cloud first' lot," he adds. "I think this is a major change for businesses & finance professionals."
Agarwal believes that Indian small-medium enterprises (SMEs) have a long way to go in terms of adopting software tools. “We think there is a huge gap in the market in adoption of software tools," says Agarwal. "Everyone in the organisation sharing a common gmail account password to interact is very common in India SMEs and the CA community too.”
“So the challenge is to get adoption and training. We have focussed on that,” he says. The company charges Rs. 12,000 per year and allows unlimited number of filings. Since GST rolls out on July 1, time is running out for companies to ensure readiness.
ClearTax CEO Archit Gupta says the company’s GST software is ready for that. “For SMEs, they can start using ClearTax BillBook software and start creating GST invoices," he says. "It supports the creation of all the documents needed for GST. SMEs can visit our site, register and start using the software which will work both offline and online." ClearTax says several enterprises have legacy systems that they’re having trouble upgrading to GST compliance and that Cleartax's software is ready even for these companies. ClearTax charges Rs 5,000 for SMEs and Rs 2 lakh for enterprises. ClearTax BillBook for invoicing is available free of cost.
Several big companies such as SAP, Microsoft, and Deskera are also working on helping customers comply with GST norms. If you use software from these companies, contact customer support to figure out a smooth transition path. They don’t require you to install other apps for GST compliance and claim that their software is ready for GST.
Here are some other companies offering GST compliance software. You can take a look at these and figure out which one works best for your business.
Tally is one of the most popular ERP software in the market right now. Tally has released a preview build for GST, which you can use to ensure that your business is following all norms. Its final build for GST compliance isn’t ready yet though. Check out Tally’s website.
GST Star is a website founded by Infosys veterans. It offers a variety of GST compliance services starting at Rs. 500 per month. Check out GST Star online.
A tax expert joined us to talk about the impact of GST on prices of gadgets and IT services in India on Orbital, our weekly technology podcast. You can subscribe to it via Apple Podcasts or RSS or just listen to this episode by hitting the play button below.