Domestic BPOs answer GST call with plans to cash in on tax filings

The government’s goods and services tax (GST) has opened up a new business opportunity for the business process management sector, which expects to see demand from companies who may need help managing their tax filings and invoice matching processes. The GST regime, which was rolled out on July 1, requires companies to file returns every month in every state in which they do business and also needs invoices to match to allow for tax refunds. The system is geared to prevent tax evasion. 
Hinduja Global Solutions(HGS) has already launched a GST solution in India and has won a telecom customer, which is being supported from Noida, but HGS expects to start operations in Mumbai and Chennai as well. “When the system settles down, everyone will have to start uploading their sales invoice, what they call the GST credit check, input credit taken and do the plus minus — whether they have to pay more or collect a refund. This is a reconciliation exercise at every stage. If there is a mismatch between what you say and what a supplier says, that will throw up an issue,” Srinivas Palakodeti, CFO at HGS, said. “We could manage the process where there are mismatches, it would involve calling up a vendor and pointing out a discrepancy.” 
He added that this would be a combination of voice and non-voice services and would be similar to the work already being done by the company in finance and accounting and in payment processing for insurers and hospitals. 
BPO CEOs are already looking at how GST could open up new markets for them including with small-and-medium-sized companies that could not typically afford their services. 
“One thing we are looking at is seeing if it is feasible to create a multitenant shared-services model for smaller companies. So we could maybe aggregate about 50 MSMEs in a process and then they could split the costs across companies to make it more affordable,” Sandip Sen, CEO of BPO company Aegis told ET. Aegis is one of the largest BPOs in India focused on the domestic market. 
But not everyone is convinced that this could be a large long-term opportunity for the domestic BPO sector. “In the short term, yes, everyone is looking for extra help and it is an opportunity for BPO firms but in the longer term, GST is designed for automation. We see that bots will be used as the system settles down. 
Companies are even looking at consolidating their finance and accounting operations in a shared services centre, but I don’t know if that will translate into contracts for BPO players, “ Milan Sheth, Partner-Advisory Services & Technology Sector Leader at consultancy EY, said. 
“The big companies already have Finance & Accounting teams, so they would be able to manage. It’s the next rung of mid-level companies that would likely be interested. They would not likely go and hire a whole new set of people to do GST filing. We are looking at the space,” Susir Kumar Mangalore, executive chairman of BPO company Intelenet told ET.
Source :  The Economic Times

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