The goods and services tax will be coming with a lot of compliance and it must adhere to those rules and regulation must not be broken in any case to avoid any legal or operational loss proceedings. In the same regard, the companies which are above the revenue of 500 crores must be ready to be compliant with the upcoming GST, but it is more or less concerned with all those suppliers it is associated with as the registration issue prevails after months of follow up.
The issue stucks with the input tax credit, as the provision, demands that both the supplier and receiver must file their return and must be registered with the GST to avail the input tax credit after uploading their invoice on the GSTN. It is also speculated that if the ITC is not properly maintained than the business units may face a cash crunch.
A recent interview was conducted with the accounting technology providers who are majorly dealing in providing the enterprise resource planning (ERP) software to the corporates and also maintaining interactions to create a methodology within the organization to make all their clients GST ready.
A renowned person, Prashant Pillai, director of the corporate segment at Thomson Reuters explained the problem in a short way that if the suppliers will not comply with the GST provisions, they may face heavy issues in the liquidity. He also added that “For example, if input credit is not available for a company, it would not only block its cash flow but would also require it to arrange additional funds to run its business. So, there has to be a cash flow management challenge as well for certain types of corporations depending on the complexity of the suppliers.”
As the Thomson Reuters are into the software solutions provider which also works as the ‘bolt-on’ as to make a variation of ERP’s which could compatible with the GST. The companies like Thomson Reuters, it has been seen that there is a wide chaos in the initial days which has ignited a lot of large organizations to indulge with their suppliers and market ecosystem in making aware them about the GST on a vast array of filings of return and other compliance related issues.
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These corporates are making sure that the suppliers soon transforms their knowledge and upgrade their system to comply with the GST so as to avoid any chance of mismatch of ITC or any other problem. They want their suppliers to match their GST compliance level in order to continue business in a hassle-free way.
Srikumar Mukherjee, adviser, applications, Oracle India, mentioned that “GST being a transaction-based system, businesses are also working with their suppliers and customers — so that the complete supply chain process becomes seamless according to GST laws.”
He also added that “Businesses are now tackling multiple factors to align themselves with the changes in the model laws of GST. Having said that, I still feel that bringing in the new tax regime from July 1 is possible with support from the government.”
