'Can GST function without a glitch? The answer is NO.'

'The nation is struggling to get ready. In general, people do not know what they need to be ready for.'

'GST is a double-edged sword. On one side it is a breather, on the other side, it has increased the uncertainty of business outcome.'

 

It takes eight to nine months for developing a robust software from the time the rules are decided, warns Bharat Goenka, managing director of Tally Solutions, one of the entities entrusted as a 'Suvidha Provider' with developing ready software for customers to get them ready for the coming Goods and Services Tax (GST). A week ahead of the tax rollout, the enterprise resource planning software company launched its accounting and compliance software on Thursday. A talk with Dilasha Seth:

What are your thoughts on GST readiness, a week ahead of the rollout?

Life is not easy right now. It is not only a product problem but an outreach problem.

It is about the diversity of customer base, the quantum of customer base and expectation of your customer base. Preparing for that scale and infrastructure, in addition to partner infrastructure, is a cumbersome exercise.

How ready is Tally as a GST Suvidha Provider for the challenge?

I don't think we have been able to stop and measure how ready we are. We will only be able to say that we are progressively getting more and more ready.

We are definitely very scared that the nation is struggling to get ready. By nation, I mean individual businesses. In general, people do not know what they need to be ready for.

How much of a respite is the two-month grace period given for filing of returns?

It is a double-edged sword. On one side it is a breather, a procedural breather. On the other side, it has increased the uncertainty of business outcome.

I would not know the basis of my profitability and cash flow projections that I have done. Whether it will turn out to be true or not or whether the input tax credit that I assumed will actually be available or not will have to be seen.

Are all APIs (application program interfaces) in place and embedded in the software?

There is a reason that our Release 6 is not connected to the GST Network (GSTN, the information technology backbone for the new tax).

On July 1, they should be able to make their invoices; for that, they do not require to be connected to GSTN. We are taking them through the most robust and least risk path.

Besides, we cannot make life more complex for customers by coming out with frequent releases with minor upgrades based on APIs provided by GSTN. We are instead focusing on fewer releases with major upgrades.

What is your take on GSTN's progress?

GSTN is in a very difficult position. They are going rock-crazy trying to cope with the volatility and doing a good job under the current circumstances.

No one could have done a better job. But, it is not going to be easy for them and neither is it going to be easy for the country.

Is the problem essentially with the cramped timeline? Is July 1 too optimistic?

It is indeed very cramped. While it is easy to add a new feature to software with respect to its functioning, developing robust software takes time.

Whenever you make a change, you need to harden the software and that takes time. If you do not give it time, you end up with fragile software and get potentially surprising results.

It is a high risk environment. So, it is not sensible to try and do such mega rollouts without robust backing. GSTN are keeping eyes on the fact that they have to deliver robustness. Yet, they are under this pressure of delivering functionality.

How effective is the two months grace time? How much time does it take to make robust software?

Hardening the software takes eight to nine times from the time rules are frozen. So, is two months enough time to give a robust release, so it can function without a glitch? The answer is No.

How many customers are you adding per day in light of GST?

We are seeing an increase in customer base on account of GST. The bulk of increase is on account of those who are using pirated versions butmoving to us.

We are adding about 2,000 customers a day, as against 500 a day earlier. That said, the focus continues to be on existing customers.

Are your customers ready?

We are trying to get them ready. But, they do not know what to get ready for. There is an absence of knowledge.

Could you elaborate on that, since the rules are already out?

In the pre-GST era, 60-80 per cent of our customers were in a single tax regime.

They had to care about profit and loss account, purchase, direct cost, expenses and net profit.

Now, every single item bought from an unregistered player will also need to be reported and paid for.

For instance, if you buy a Rs 12 pen from a next door shop -- if unregistered, the firm will have to pay tax to the government directly, instead of just recording it as an expense. It is quite complex that way. And, this is only one example.