GST: How Indian CIOs are preparing for India’s most ambitious tax reform

The One Nation, One Tax reform is set to be a challenge for Indian enterprises as they prepare to customize their internal systems with respect to different factors such as business process localization, tax computation and supply chain management. To understand how Indian  enterprises are preparing for the GST era, Abhishek Raval spoke to CIOs across different verticals. Here is a brief snapshot of their perspective

Vijay Sethi, CIO & VP- IS, HeroMotoCorp

Our GST transition began in August 2016. It’s not only helping us but also our partners in ensuring that  the ecosystem is ready for GST. Conceptually, the way taxes were computed, will change from multiple taxes and subsume into State GST, Integrated GST and Central GST. As a result of these changes, the business set up will change. Earlier, the location of plants, warehouses and offices were also governed by taxation. All this will change. The entire logic of how the taxes, costs and order value will be computed will change. We have SAP as ERP, so we have changed the tax procedures in the ERP and then the second part is to inject the software patches and programs with respect to the new taxation system. This is done in three phases after doing consultation with various partners. By 15th June, we would be ready.

Sumit Singh, CIO, Wockhardt Hospitals
We have been talking to and planning for GST with various stakeholders for a while now. We have done an impact analysis in our entire workflow and processes where we need to prepare for.

Accordingly, IT systems, internal or vendor supported are going through the necessary enhancements. I expect we should be fine from day one of GST coming in to effect.

Dheeraj Sinha, Group CIO, JSW

We have setup a GST business advisory and decision making Apex team. This is supported by individual  business owners which in turn are supported by Tax and GST Compliance Advisory teams to help the business in taking the right decisions. Translations of directions in the systems is then a job of the IT teams which report back to the business teams for the project. This is one of the highly complex projects and touches the critical Record to Report, procure to Pay and Order to Cash cycles. It impacts all vendor, customer, material SKUs and there are significant changes in key processes in the above areas.

The Technology team is working along with the business and running it as a programme. The project has been on for more than 5 months now. The impact analysis of the new Tax regime, the modifications needed in existing codes, the new changes brought by GST are documented and system readiness is being done for the same. Impact analysis on existing solutions and custom codes has also been done and rectifications are under way. While there are a still a lot of unknowns, the configuration work is almost ready and cut-over scenarios are under discussions.

As part of the preparations, mock environment for GST compliance has been created where all the testings are being done. The vendor master, customer master, pricing procedures, pricing reviews are all tasks that are at various stages of readiness. We will be reviewing our progress around the end of May to enable us to take business calls wherever needed and pending.

Jayantha Prabhu, Group CIO, Essar Group

We are working on customizing SAP as per the GST requirement. On the IT side, we are ready. All the 8 SAP instances are completely GST compliant. For GST implementation, we are working with a third party organization. The group has set up a 10 member team for GST rollout.

Pratap Gharge, Executive President & CIO, Bajaj Electricals Ltd

We have started two projects on the GST rollout preparation. One is focused on technology and the other on business. The business re-organization, because of GST may give us some benefits vis-a-vis the other taxes. We will have to be ready to take the advantage. We are in the process of consultations with some of the warehouses, which are present mandatorily in selected states. Henceforth these warehouses may not be required in the GST regime. This can lead to changes in the IT system. As far as the GST taxation rollout itself, we have already started a rollout with one of our consultants for taking our ERP and applying the patches which are ready. We use Oracle ERP. The patches are being tested. We are almost ready and waiting for certain clarifications. As far as the new accounting standard is concerned, the Ind-AS, the IT is involved to the extent of whatever application changes are required. So, we are helping our finance department by extracting all the information in the format which can be given, which is the Ind- AS kind of a format. Broadly, we are helping in data extraction. Also certain modules are being developed  on our intranet. App designing is also on to enable the Ind-AS process.  The standard accounting practices of the ERP will not change. Only the way certain reporting is done will change due to Ind-AS. We are trying to give the necessary tools to the finance department to extract data, which is to be reported as per the Ind-AS standards.

Girish Rao,  Head – IT and Business Analytics, Marico

Right now, the focus is on transaction systems before we look at the analytics systems because the jury is still out on how GST will change the situation on the ground. The stress currently is on transaction and data acquisition systems. Once we have a fair idea of how the situation will pan out, then we will look at analytics. Our estimate is that there will be a lag of atleast 3-4 months before the analytics platform becomes suitable for GST. Having said that, route optimization will be helpful because the state boundaries will have a lesser impact in that sense. It may also lead to relocation of depots etc. Thus we are also trying to optimize the supply chain to position warehouses in places that will be friendly to supply chain rationalization.

Krishna Kant Mishra, CIO, Everest Industries Ltd

We are still in the process of finalizing our depot structure because the biggest impact will happen on our distribution network. Currently, we are having about forty depots in the country. Going forward, the number will reduce subsequently. Thus the logistics costs will have the biggest impact. The evaluation is on for zeroing on the strategic locations for depots. As a consequence, IT will have a role in the seamless communication between departments. Additionally, the SAP configurations will undergo change. It’s a major task. We need to create some more APIs for finding the vendors who are not suitable for the environment, which means if they are not complying then what kind of analytics do we have to identify such vendors. We have made our SAP sandbox, and are implementing SAP nodes for doing the final configurations. We are doing the data cleansing for our customers and vendors.

We need to access the GSTN network through some GSTN Service Provider (GSP), also known as a Suvidha provider. The Govt has certified 34 GSPs who will be providing us services and it is mandatory for an enterprise to access the GSTN through a GSP, who has certain standard APIs provided by the GSTN. There will also be companies, known as Application Service Providers (ASP) , who will provide analytics and give us solution to file returns.

Vipul Anand, Group CIO, JSPL

GST will have a huge impact on our business. We have already completed an impact analysis of GST across our business functions. With the GST law passed, now our teams have been able to compile a formal document of impact of GST onto our business processes and systems. Accordingly a task force has been formed to ensure that we implement necessary modifications onto our application platform to cater to the needs of GST impact.

While we are confident to be ready for GST across all our business locations , our larger worry is to make sure that our external stakeholders are ready and the infrastructure including portals and systems stay integrated in time as per GST needs.

Anil Goel, Chief Technology Officer, OYO Rooms

In preparation of GST, we are making investments in increasing flexibility of our tax systems so that we can implement different tax rate slabs for different sources of revenue i.e, Room rent, meals etc. at various jurisdiction levels i.e., Central, State and City, by merely changing the configuration.

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