The new tax regime, which aims to replace the current taxation rule, is set to roll out on the July 1, 2017. GST has given birth to an entity called a GST service provider, who will help businesses with the registration, uploading of invoices on the platform and guide them through the entire transition. There is a lot of confusion about the transition from the current regime to GST, businesses seek clarity on the input tax credit on their inventory, the number of invoices to be filed and the method of maintaining records. GST has thus, given birth to service providers who will help businesses with the entire procedure. GST is spawning a $3 billion industry, which consists of chartered accountants, consulting firms and service providers.
Entities that have been working closely with small and medium scale enterprises have turned into a GSP and is aiming at generating business from companies. Apart from GSP, GST has also given birth to ASPs, or Application service providers that use the purchase and sales data from the taxpayers and convert the same into GST returns for the purpose of online filing. This was earlier carried out for the Income Tax Filing of individuals and companies. The entire industry is undergoing business process re engineering, which means that every business will have to go through a transition from the current tax regime to GST and the service providers aim to gain business through the same.
SAP and Oracle, the big players in the ERP business, could generate revenues of atleast $1 billion in the next two years. Tally Solutions has about 11 lakh users of the accounting software and it has already received 6 lakh subscriptions from the businesses. The cost of their software varies between Rs. 18,000 to Rs.54,000, the annual subscription for the same is Rs.3,600 for a single user and Rs. 10,800 for multiple users. The company aims to garner as much business as possible in order to help businesses tackle GST with ease.
Smaller players in the industry are also eyeing huge turnovers. ClearTax, which is an online set up that helps file income tax returns, is now expanding into the GST arena with the software. It senses a huge opportunity to grow the business in the next two years. Companies have also hired a huge workforce to meet the demands. ClearTax has hired around 400 employees in the last one year.
The big four accounting firms are also bracing themselves for the transition. Deloitte has around 250 new recruits, while PwC has about 200-250 new recruits. For the larger companies, the turnover will run into crores, while for smaller companies, they are banking on the volume and charging a lower fee in order to reach out to more clients. They are offering service for filing returns, uploading the information on the portal and guiding through the process of transition for the business.