An epic shift has already started in the Businesses Finance function. Taxation is transforming from paper-based to completely digital, right from GST filing to GST refund. Indian Government has already accepted the digital way, so why should the organizations be left behind. This is the era of digital tax constant compliance. Currently, the compliance with GST, sales, & other transactions related tax expects the organizations to adopt the e-invoicing and electronic ledgers in the approved format by the government.
The augmentation in digital tax is the latest development that has vast transparency for GST filing and returns.
Compliance, a Major Challenge for Businesses
Since GST has been introduced the main aim of the government is to reduce risk on non-compliance by consolidating multiple taxes and increase the efficiency of the tax process by enabling tax technology solutions. There are a lot of compliances that need to be followed which most people are not happy about. It’s almost twenty-seven months since the inception of GST, India’s biggest and boldest tax reform hit the taxpayers in India and so have the challenges hit the government of India. There has been slow growth in the GST collections. There are some major challenges that have come to notice.
- The delayed growth of the GST revenue collections has forced the states and center to move aside. The collections have not reached as predicted. There has been a slowdown in consumer demand, the effect on slow collections has been amplified. Let’s look at the graph below that shows the slow-down in GST collection from April-August.
- The second challenge faced is the fraud of overhauled and faked invoices given to claim a refund that has been the reason for the fall in total revenue. In the last week of September Directorate General of GST Intelligence exhumed a Rs 400 crore fraud to claim GST refund. This is something not to be ignored. Fraud is a challenge that needs immediate rectification and must stop.
- The third challenge that is being faced is that the states are not agreeing to bring items like petroleum products, & electricity under GST. They are not even agreeing to reduce the number of rate slabs such as nil, 5%, 12%, 18% & 28%.
These are the 3 major challenges which call for a Digital Transformation. Where there are some who still think GST is a burden that has only increased the risk of non-compliance and reduced efficiency there are also some who are leveraging from GST to enjoy the intended results.
How are successful businesses handling these challenges?
Successful business and businessmen who know the importance of GST and technology have already started using the digital transformation strategy.
- Implementing Software Tools.
They are using technology to improve the existing business processes by implementing software tools to all the processes in the compliance data lifecycle. They have established new business methods by innovating the possible use of GST data and integrating new tools like AI. This not only makes your system powerful but also is a step towards empowering your employees. This diagram below gives you an overview of how the same will work.
- Applying Robotic Process Automation (RPA)
Business is implementing tech in the existing processes with the help of RPA. They have applied RPA in their current transactional tasks like data collection and data extraction that can reduce the manual work by 50%. This allows the finance function to increase their time on strategic tasks that will help to boost business performance.
- Using Big Data technology for data repository
Businesses can easily build a central data repository by using Big Data as it can easily manage the regulatory changes going on. There have been rapid changes in the indirect taxes reporting norms, having a data repository will allow quick execution of the necessary modifications.
GST Data and the new age technologies like AI, Big Data & Blockchain can be of great aid to help enhance revenues and reduce the losses. Adapting the digital transformation cannot be done overnight, hence business owners need to sit with their Financial Leads and Teams to make this a possibility and ensure that you are safe when it comes to GST Return Filing. This cultural change in Tax Technology will not only make life easy but will take you a step ahead of the others. You will be away from any frauds and have an error-free filing.
If you are looking for any assistance, then Cygnet GSP is here to help you. They are experts in tax technology and have helped many companies to file their GST.