An unexpected revenue has been garnered by the global accounting firms in lieu of their consulting for all the business firms who are seeking their advice upon GST. All these business firms are taking a pool of suggestions and advice from these global accounting firms to build their IT infrastructure and to apply new tax accounting rules ahead of Goods and service tax which is scheduled to implement on July 1st.
The GST is approaching at a fast pace towards the Indian taxation system and for the sake of compliance, the business units are readily paying these global accounting firms a hefty amount of money. The name tag of consulting fees can cross as much as staggering 150 billion rupees ($2.3 billion) for all those big giants like PricewaterhouseCoopers LLP, KPMG LLP, and Ernst & Young who can avail benefits of this shift accordingly.
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In this directions, these accounting firms have also started to outsource the specialists in the tax framework to make ready all those client firms for the upcoming GST. Still, a hitch is present into the consulting as there are no finalized guidelines available to which the companies can implement upon.
PricewaterhouseCoopers partner Pratik Jain told that “Corporate clients want more detailed guidelines and illustrations based on specific sectors, clients have complained that guidelines for getting credit for taxes paid are more restrictive, and lack of clarity on registration of taxpayers with multi-state operations is a huge issue.”
Bloomberg reported that, without the details information, it will be tedious for all the organized sectors to align themselves with the GST starting from July 1st, in which there are approx 40 million small scale business units comprising 70 percent of them as unorganized which have started the registration process yet.
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Bloomberg also mentioned that “The complex process of converting more than 1 billion consumers into a unified, common market has also created demand for enterprise resource planning.” Various IT companies giving consultation over upcoming GST estimates that over 200 queries are daily depositing with each consulting firm it is a bulk matter for the up gradation now.
There is a need for more clarity over the rules and regulations along with the tax rates which are yet to be decided. At current, India has over 3 lakh sales tax accounting professionals who are responsible for making small business units to file the returns and making them stick with the tax laws and regulations. Along with it, a total of 1.5 lakh chartered accountants is there readily helping the firms to comply with GST. Around 80 thousand of CAs needs to be trained for the GST in order to make them eligible for further assistance.
An opportunity will be striking the accounting firms, as well as IT firms with software products as a representative from an imminent accounting firm, mentioned that there is an approx 10 billion of revenue which is generated from the business units, out of which 6 to 10 million is consumed in the accounting part. But the figure will be doubled as soon as the GST actualize and will be constant for the first year.
