GST Bill: Security channel partners unsure about impact

Security channel partners highlight their thoughts on the GST bill, which has been cleared by the Rajya Sabha.

Finally, the government has woken up from its slumber and passed the Goods and Services tax (GST) in Rajya Sabha with more than two thirds majority. Now, the bill will head back to Lok Sabha for the ratification of amendments, trailed by ratification of the Bill by a minimum of 15 states in their respective assemblies. The intended deadline for the rollout of GST is April 1, 2017.

It will give a face lift to the entire economy and bump up the GDP by a percentage or more.  But let’s see what kind of impact will GST have on security channel partners.

Kota Subrahmanya, director, Central Data Systems:

It is too early to say how it will impact the partner community. We are waiting for the new tax structure in products and services to be introduced. At present, we are paying around 5.5 percent on products and 15 percent for services. When GST is fully rolled out, single tax might become 15, 18 or 22 percent. Moreover, there will be less complexities when we sell products from one state to the other as we don’t have to pay many taxes. Also, whenever we get involved with multinational companies (MNCs), we’ve to pay VAT on products, service tax on service, customs duty and so on.  Thankfully, our documentation will reduce.

Vishal Bindra, CEO, Acpl Systems:

At present, it is premature for us to react if it is good or bad. We need to wait for the final outcome and taxation rates to come out. When adjustments start to happen, things will change for good. For instance, with the implementation of GST, our market expansion will improve as there wouldn’t be a need to pay multiple taxes. One would not have to maintain books separately for value added tax and other taxes. Things will become easier. It will not have a major impact on foreign OEMs. There will be less compliant and regulatory issues. Overall, it will help the entire economy.

Pankaj Rajput, CFO, Versatile Infosecurity:

Today, a lot of time is consumed by the accounts team as multiple taxes need to be filed. After GST, we’ve to file only one return. A state would have no power to tax.  That said, at present, we are paying 5 percent on hardware and 20 percent on licenses and renewals. There is a possibility of it coming down to 18 percent. This will reduce the cost for the end customer.


 V. Anand, CEO, Raksha Technologies:

While the whole country is excited about the introduction of GST, what is not clear is the impact on business we do with customers in special economic zone. There are tax waivers given to a lot of companies in these zones, so I'm not sure how the law will be applied.  Moreover, I believe there will be an overall price increase in the cost of products to customers as the software license business works with discounts from MRP.