India’s information technology (IT) industry is likely to benefit in a big way as the goods and services tax (GST) roll-out leads to companies spending a few thousand crores of rupees in becoming GST-ready.
While many large businesses, with thousands of partners and customers spread across the country, are spending “significantly” to upgrade their IT infrastructure, the Union government will also invest in setting up the technology infrastructure for GST and its maintenance.
GST is slated to be rolled out from July 1 and will replace the existing tax compliance system for businesses.
“For the GST regime, businesses and organisations will have to upgrade the enterprise resource planning (ERP) and billing systems. It will be a very large and complex transformation and, therefore, it will create a huge opportunity for the IT services companies,” said Sanchit Vir Gogia, chief executive, Greyhound Research.
Gogia believes that it would not only bring in opportunities for technology services, but also for professional services to simplify the taxation and compliance processes for various organisations. In fact, technology services, professional services and necessary hardware upgradation put together, businesses may spend, Gogia added, few thousand crore rupees.
Infosys, India’s second largest IT services firm, bagged a five-year contract worth Rs 1,380 crore in 2015 to implement the GST Network — the nodal agency that will implement the technology and the IT backbone for the unified tax regime, along with the maintenance for it.