Customers browse items at a wholesale store selling sunglasses near Mangaldas Market in Mumbai (Photographer: Dhiraj Singh/Bloomberg)

GST: Chartered Accountants To Run The Show For Small And Medium Traders

Chartered accountants are all set to be a busier lot post the Goods and Services Tax (GST) rollout as most small traders feel unprepared for the new indirect tax regime.

Most of the retail and wholesale shopkeepers that BloombergQuint visited at Dadar in Mumbai, hours before the tax reform gets rolled out, said that they felt unprepared and were relying on their chartered accountants for all their tax queries. As a result, chartered accountants have a lot of work at their hands.

Chartered accountants Deepak Shah and Sunil Gabhawalla, who are also representatives of Bombay Chartered Accountants’ Society, told BloombergQuint in an interview that their work will increase manifold.

“For each returns cycle, there were one to two interactions that we had with our clients so far. Now post GST, at least 15-20 touch-points will be required for each return,” said Gabhawalla. With 36 returns to file in a year, each accountant by that measure will be interacting at least 720 times with each client in a year. That, according to Shah, will only make things difficult at both the ends.

The problems for traders do not end there, and the chartered accountants felt that they were unprepared even hours before the indirect tax gets implemented.

“As of now, traders are actually not prepared. They are still in a wait and watch mode. They don’t know how to go about the billing tomorrow because the small traders are not equipped with computers or any software or system as of now. So, for them it is a big challenge,” said Shah.

Whether it is the implementation date, prices or raising invoices , there is a varying level of uncertainty among traders, said Gabhawalla, who also pointed out that it is now not about how to profit from GST but on how to survive from it that is worrying the traders.

There are some of the assessees who were exempted from taxes so far, like the textile industry, are now being taxed under GST. There are others for who registration opened post June 25. There are technical problems with the GST portal and because of this a lot of them have still not been able to register, he said.

When asked to summarise what GST brings to the small and medium traders, they unanimously agreed it is “a pre-mature implementation of the law that is path-breaking”

With or without hiccups, GST will roll out tomorrow and every trader in the country will have to comply. It is yet to be seen how long the transit time would be to adapt to the new tax structure.