A few days back, the government brought up the three new GST Returns namely – Normal, Sahaj & Sugam Forms. Now news has surfaced that simpler GST rules & regulations along with the new returns are making the GST compliance easier due to which the taxpayers are expected to file their taxes by themselves which is affecting the business of the tax consultants. As compared to the previous return files, these three are easy to file so demand for tax consultants which was there during the previous return is not seen now.
An anonymous industry insider said that around more than a dozen of partners and 50 directors from the top businesses are on the verge of quitting or leaving the firm within few months as they are not capable of handling the pressure of generating the revenue.
On the other hand, many tax heads, CEOs and senior partners accepted the pressure which was made on revenue in the sector.
Different firms had different points of view in this matter-
- A KPMG spokesperson said, “while the indirect tax revenue in the industry appeared to have plateaued, the practice for the firm was growing strongly”.
- A PwC spokesperson said, “the company was building data analytics capability around GST to provide integrated solutions and that indirect-tax practice remained an important growth engine for it”.
- While the EY and Deloitte did not utter a word about it.
The insiders said that there was a growth of 50 percent annually in the revenue of the larger professional services businesses from the GST based services between 2015-2018. Due to which there was more job opportunities, salaries and promotions to professionals in their indirect tax sectors. But the present scenario is that only 10 percent of the growth on an average can be seen.
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In multinational companies, partners are given revenue goals and they take almost 30% of the revenue generated by them in their hand. This year, people have reportedly failed to achieve their goals in a large number.
Top 10 businesses which include six multinational companies grabbed a total of Rs 1,000 crore from GST based services. The top six companies hired around 3,500 people which includes 100 partners that handle the GST services due to which they grab around Rs 850 crore annually.
An insider said that as compared to the time of rollout of GST, the time period of doing a billable work by the professionals has reduced to the 60 percent from the 95 percent.
The tax head at one of the Big Four firms said, “It’s the case with every market in the world; there are mainly three stages of revenue growth after a new tax framework is introduced. First the phenomenal growth stage, then the plateau and then the gradual decline”.
The India head at one of the multinational firms said “Now what we are left with is the compliance work in GST. The days of 40% and 50% jump in revenue are gone. We had increased the team size due to the sudden growth, now some of the partners will have to go”.
The senior employee of the company said that they are also facing problems because of the growth in the use of AI and automation.
A senior partner heading a GST team said “Automation is also a big disruptor. So, while earlier adding people meant adding revenue, now one doesn’t need to add as many people to add revenue. So not only are we hiring less people, the revenue pressure is felt by those who are in the system”.
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Suresh Nandlal Rohira, partner, Grant Thornton India, said, “The upside lifted many boats during the GST launch euphoria, but the ones who stayed wise, not splurging on the short-term urge to increase headcount, aren’t facing revenue pressure”. He said this before adding that his business is not being affected.
Many companions and directors who have seen their pay increases in the last few years, they are now searching for new things.
