GST IS NOT RE­ALLY A TAX PROB­LEM BUT A TECH­NOL­OGY IS­SUE

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—DEB DEEP SENGUPTA Pres­i­dent & Man­ag­ing Director, SAP GST com­pli­ance is the hot is­sue with most or­ga­ni­za­tions in In­dia. And SAP has a ma­jor role to help or­ga­ni­za­tions be­come GST-ready as most of them use SAP ERP or other ap­pli­ca­tions. To un­der­stand how SAP is help­ing cus­tomers adopt GST-ready ap­pli­ca­tions, Dataquest had a tetea-tete with Deb Deep Sengupta, Pres­i­dent and Man­ag­ing Director, SAP In­dia s Dig­i­tal In­dia has be­come a buzz­word presently in In­dia, how do you see trans­for­ma­tion in var­i­ous in­dus­tries?

AThe dig­i­tal trans­for­ma­tion is now open­ing up to a lot more in­dus­tries in the ecosys­tem. We are hear­ing quite a bit about se­cu­rity from some time now. So there­fore, se­cu­rity is go­ing to be very crit­i­cal; es­pe­cially for a coun­try like In­dia where the mind­set is not process and pol­icy ori­ented. Other than that, the new tax regime is giv­ing a huge push to the Govern­ment’s Dig­i­tal In­dia cam­paign. Mi­cro, small and medium en­ter­prises will all have to digi­tise their pro­cesses. More tax­pay­ers are to come into the fold of the for­mal econ­omy and move on to dig­i­tal modes of pay­ment. We are see­ing a lot of ac­tion in the mar­ket from large es­tab­lished and well-known tech­nol­ogy com­pa­nies to SMEs due to GST. How do you think it will im­pact every­body? I think every­body knows the long-term im­pact of GST be­cause it is go­ing to in­crease In­dia’s tax net. Se­condly,

it will make sys­tems more trans­par­ent. As new poli­cies that come up, there will be a lot of op­er­a­tives in­volved. Com­pa­nies that have a con­sis­tent strat­egy and which can sup­port their clients and cus­tomers on a con­sis­tent ba­sis will only be able to sur­vive. Oth­er­wise, they’ll just wither away. I guess it is good in a way - at least it cre­ates aware­ness. Then it is for th­ese or­ga­ni­za­tions to be able to fig­ure out whether they can sus­tain and whether it’s an op­por­tu­nity they would want to pur­sue. In my opin­ion, when­ever one mar­ket pol­icy such as GST is rolled out, most com­pa­nies aim to be­come com­pli­ant. The big­gest ad­van­tage of GST, other than at a macro level, even at an or­ga­ni­za­tional level is that it will give com­pa­nies the op­por­tu­nity to re­design their sup­ply chain.

The ef­fects of GST on or­ga­ni­za­tions will be in three stages. Stage one – there will be com­pli­ance, trans­parency and no leak­ages. Stage two – there will be im­prove­ment in the ef­fi­ciency of the sup­ply chain. Th­ese two stages will then lead to the third stage, i.e., im­prove­ment in cus­tomer ex­pe­ri­ences be­cause at the end of the day, that’s the real im­pact which most com­pa­nies are look­ing for.

How big is the GST busi­ness op­por­tu­nity for SAP?

It’s very dif­fi­cult at this point of time to quan­tify but it’s a sig­nif­i­cant op­por­tu­nit. We cur­rently have 8500 cus­tomers in In­dia and due to GST and other dig­i­tal ini­tia­tives; we be­lieve we can have al­most 100,000 SMEs as cus­tomers in the next few years. We have ac­tu­ally pro­duc­tized our of­fer­ings, like ‘GST in a Box’, as well as a Dig­i­tal Com­pli­ance Ser­vice for GST - which is a cloud based on­line app. We are see­ing a tremen­dous re­sponse not just from SAP cus­tomers but also from non-SAP cus­tomers for this.

We are of­fer­ing en­ter­prises that have ab­so­lute man­ual or home-grown sys­tems, an op­por­tu­nity to get GST ready in 100 days on a hosted cloud model at a very min­i­mal fixed price per month. For the en­ter­prises that al­ready have their sys­tems and pro­cesses in place, we have come up with an ASP so­lu­tion. They can lever­age our ASP so­lu­tion to hook on to any GSP and get com­pli­ant. All of this is part of the first phase.

How do you pro­vide GST train­ing through on­line plat­form?

We have cre­ated a GST por­tal ( sap. com/ In­dia/ Sim­pleGST) that guides in­ter­ested par­ties to our SAP so­lu­tion cen­tres and our var­i­ous part­ners who can ed­u­cate and guide them. For com­pa­nies that have al­ready gone through our GST por­tal, we have a 24/7 helpdesk sup­port for all our cus­tomers – if there is some­thing that is re­quired.

Has GST taken the in­dus­try by sur­prise re­gard­ing the tech­nol­ogy readi­ness which is re­quired?

The an­swer is yes as well as no. In­dus­try seg­ments that are more or­ga­nized and for­mal­ized like au­to­mo­tive, con­sumer prod­ucts, etc., th­ese en­ter­prises have been pre­par­ing for GST for the last 6-12 months, at least. For th­ese com­pa­nies, it is not just about get­ting GST-ready but also bring­ing about their tier one/ tier two sup­pli­ers into GSTready mode. It is also about their cus­tomer con­tracts and in­ter­nal pro­cesses be­ing updated. GST means dif­fer­ent things to dif­fer­ent in­dus­tries and sec­tors. GST pol­icy for tex­tile is com­pletely dif­fer­ent from au­to­mo­bile. Sim­i­larly, GST pol­icy for oil and gas is dif­fer­ent.

Through SAP’s stand­point, we started our GST jour­ney way back in Novem­ber, we cre­ated GST aware­ness work­shops. We re­alised that many mid-sized busi­nesses, SMEs and MSMEs across the na­tion are the ones that needed ed­u­ca­tion and hand-hold­ing. We went to 21 cities for our GST health check drives and also launched spe­cific GST so­lu­tions for their ben­e­fit.

What are some of the big­gest chal­lenges for large or­ga­ni­za­tions, SMBs and MSMEs with re­spect to gear­ing up for GST?

Large or­ga­ni­za­tions usu­ally have mul­ti­ple sup­pli­ers. But not all sup­pli­ers will be GST ready, which is a threat to th­ese or­ga­ni­za­tions, as well as to the sup­pli­ers. Some of th­ese big or­ga­ni­za­tions have taken a very prin­ci­pled ap­proach and are will­ing to not work with sup­pli­ers who aren’t GST ready. This will push a lot of tier two and tier three sup­pli­ers to be­come GST com­pli­ant. Also, large or­ga­ni­za­tions have worked on their fall­back op­tions, so tech­nol­ogy readi­ness or pre­pared­ness won’t be a big chal­lenge. It is more about the pre­pared­ness of the ecosys­tem and to see how it op­er­ates al­to­gether.

How­ever, for SMBs and MSMEs, it is more about the aware­ness of mov­ing from an in­for­mal sec­tor to a for­mal one. But every­body is see­ing this as a tax prob­lem, which isn’t cor­rect. It is ac­tu­ally a tech­nol­ogy is­sue. SMBs need to check their level of readi­ness, aware­ness and what kind of ad­vice they are get­ting to be tech­no­log­i­cally ready, not just from com­pli­ance per­spec­tive will be the key fac­tor.

What is the sta­tus of your GST so­lu­tions cen­tres; how do they work and what has been the re­sponse so far?

Our GST So­lu­tion Cen­tres are in col­lab­o­ra­tion with our part­ners. Each of our part­ners is ready and en­abled. At th­ese cen­tres, our clients walk in for the GST aware­ness and readi­ness checks. Ba­sis their readi­ness and aware­ness lev­els, we show them how the en­tire process works. We show them how data gets up­loaded and how we tackle the var­i­ous steps within the process. At the same time, we have a method­ol­ogy by which th­ese com­pa­nies can be­come GST ready in 100 days. We do a lot of on­line and dig­i­tal mar­ket­ing through our part­ners to reach our po­ten­tial clients. They get to know that a cen­tre is avail­able lo­cally and then just walk into the cen­tre. From a busi­ness op­por­tu­nity per­spec­tive, the pipe­line has gone up sig­nif­i­cantly, specif­i­cally for th­ese op­por­tu­ni­ties over the last few weeks.

Is the com­mu­ni­ca­tions in­fra­struc­ture or­ga­nized and ready to re­ally roll GSTN?

To­day, we don’t need broad­band and VSATs and lease lines. As long as there’s mo­bile and data con­nec­tiv­ity, data can be even up­loaded in a batch for­mat. It need not be a fully 24/7 on­line ser­vice. Up­loads can be done at the end of the day. Even for SMEs, it will all be at a con­cen­trated level, not a mul­ti­ple of­fice level. I don’t think that in­fra­struc­ture will be a chal­lenge in In­dia, with the tele-den­sity and the 4G net­work in place.

What is the progress on GST Su­vidha Providers’ front?

Many com­pa­nies have been listed as GST Su­vidha Providers and it is a great op­por­tu­nity. We have cre­ated the ASP ap­pli­ca­tion for SAP and non-SAP cus­tomers, through which, they can log on to any GST Su­vidha Provider. While we have an­nounced a spe­cific tie-up with Reliance where they would bring in their GSP ca­pa­bil­i­ties, we are also in­ter­act­ing with other Su­vidha Providers to help them and their ap­pli­ca­tions.

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