India’s big GST break

Accountants in India are set for a hefty windfall as the country prepares to abolish its complex patchwork of indirect taxation in favour of a single national goods and services tax

Raghavendra Verma, journalist based in New Delhi

1 November 2016, Accounting and Business International

‘Virtually every single company needs to get prepared for GST, which is not only a tax change but a business transformation,’ says Mahadevan Subra Mani, senior director of Deloitte India in Mumbai.

US$250m opportunity

Accountancy firms, including the Big Four, will be providing tax reform advice, technology assistance and supply chain-related consultancy to Indian companies, says Navin Agrawal, partner at KPMG India. Indian businesses are expected to spend between US$250m and US$300m on services related to the introduction of GST over the next 18 to 24 months, according to Agrawal.

KPMG has already created a project management office for GST-related market assessments, proposal developments, research, project execution and back-end support. ‘Many tax and accounting professionals are working full time, and we are in the process of identifying and training the other resources in specific sectors,’ says Agrawal, who is leading the firm’s GST initiatives.

The new business has already started rolling in. ‘Some of our clients are asking us, even before formal engagement, to come on a chargeable basis to train their staff for GST and share the developments in their sectors,’ says Agrawal. He stresses that the GST impact will vary from sector to sector.

Some of the key sectors that GST will benefit include industrial manufacturing, pharmaceuticals, FMCG (fast moving consumer goods), automobiles and retailing, says Agrawal. ‘These sectors have supply chain efficiencies, higher margins and seamless tax credits,’ he says. ‘Some of the sectors with relatively less GST impact are financial services, technology, media and entertainment.’ -Read more-