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This is how CIOs in the manufacturing and automotive space interpret GST

Soumik Ghosh | Nov. 4, 2016
After months of debate, India finalized a tiered GST structure and moved one step closer to a single tax model aimed at creating a more business friendly tax regime.

The GST rollout is also being well-received by the top guns in the steel business. "We're expecting some positive business following the GST implementation. Overall, for the country, inflation can be controlled. The slabs and rates will be made more uniform now, so that's good for our economy," says Vijay Bhaskar, DGM-IT & CIO, Visa Steel Ltd 

Bhaskar believes that there will be a lot more transparency in the process, and life will be made simpler. The steel manufacturer also foresees logistics rates coming down.

The real question, now: What does it mean for your IT infra?

"From an IT infrastructure point of view, once people migrate to new models, things will be more stable as there won't be many changes from there on," says Bhaskar.

DV Seshu Kumar, Head - IT, Orient Cement Ltd is not too worried about the IT revamp at his organization. "

Since we're using the latest ERP, we don't foresee a major overhaul in the IT infrastructure. But, from the application-front, we have to change a lot. The supply-chain management, though, is going to change drastically," says Kumar.

Sr. General Manager - IT at Ramco Cements Ltd, Murugesan Ganapathy, seconds Kumar's foresight on supply-chain being impacted. "As a matter of fact, we're still not very clear on how we're going to handle all these changes. We'll be brain-storming with our chartered accountants next week to put together a GST rollout," says Ganapathy.

"We'll also now have to figure out how to handle all the pending work orders and purchase orders. Now, if we have 40,000 items, we'll have to implement this in all of them, and it will be time consuming," he adds.

All swell, but did you read between the lines?

Something really important for manufacturers to consider is that most manufacturers with very large investments are provided state incentives, based on the current VAT and CST rates. Now with CST out of the window, the manufacturers could take a hit.

Jai Prakash Yadav, VP-IT, Maruti Suzuki India Ltd brings to light the immense amount of resources and time required to accommodate the changes brought about by the GST.

"There'll be a massive shortage of manpower when it comes to implementing the GST. A lot of consulting needs to be done, and processing of taxes will be more cumbersome than it currently is," he points out.

There's also this ambiguity on freezing upon the retail prices goods are sold at. 

"I'm an eternal optimist. But, when I talk to legal experts, there are a lot of areas in which I don't get answers for. For instance, what is the scheme for deciding MRP?" questions Aneel Kumar, Head - IT, Goodyear India Ltd.


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