Technology is used for tax administration since long in India. Then came online filing of returns which further added to our convenience. With the advent of technology, much of our time and efforts have reduced and accuracy has increased. As Indian Government has already passed the GST Law, almost everything of tax structure will require great digitization. Without technology on your side, GST implementationand compliance is going to be a tough task.
How will technology help you in GST compliance?
GST is a unified tax which will subsume and replace many indirect taxes. This means that the tax structure will change thoroughly – from tax rates to the method of paying taxes to calculating prices. But the question is why will technology be the driving force in implementation and compliance of GST? How is technology going to help both businesses and government in making their work easier?
The main aims of Indian Government by implementing GST are to reduce tax evasion and simplify tax compliance for tax payers. In the current tax system, government is not able to detect tax evasion and thus faces loss of income too. Also, due to number of taxes and their complexity and cascading effect of taxes, tax payers many-a-times avoid paying taxes. In the prevailing tax system, there are several cases where the government has not been able to detect evasion and loss of tax revenues.
For instance, GST has introduced invoice matching of buyer and seller to reduce frauds and duplications of claims. With millions of tax payers across the country and billions of invoices to be matched every month, the need for a robust technology infrastructure is critical. Doing this manually is a mammoth task.
Not only this, using technology will enable efficient tax administration. Registration, filing of returns, auditing and performance analysis, etc. will be possible with little or no human intervention. GSTN will also make available many other useful features such as offline capabilities, alerting capabilities, mobile/tablet interface, and additional mechanisms to avoid duplicity of data etc.
What’s the next step?
GST is ready to get implemented from July 1, 2017 and will be administered through a common platform – GSTN server. Businessesshould do away with manual systems and adopt a GST ready business software to ensure hassle-free and accurate tax compliance. As a business:
Realize the impact of GST
Understand the need of the hour i.e., GST compliance
Adopt and adapt to technology for better compliance