Many firms not ready for new Tax Collected at Source regime: EY-SAP India
A large segment of companies in India is not entirely prepared to deal with various tax implications of the Tax Collected at Source (TCS) provisions that come into effect from October 1, 2020, an EY-SAP India Survey said on Tuesday.
The survey conducted earlier this month includes responses of over 110 corporate businesses across India to assess their readiness to implement TCS with respect to compliances, validations, and reconciliation with various reporting requirements.
“About 85 per cent respondents acknowledged that their current tax function framework is not completely geared up to comply with the new TCS regime. Our conversations with many business leaders also pointed in that direction,” EY India Digital Tax Leader Rahul Patni said.
He added that 80 per cent of the organisations surveyed anticipate issues around applicability and updating systems and processes as a significant challenge to comply with the new TCS regime.
Also, 81 per cent recognised that reconciling data and ensuring accuracy due to TCS compliances will increase manual intervention for their tax teams.
Given the intent of TCS provisions, leading organisations are looking for digital solutions which help to not just comply, but also proactively perform reconciliation from a tax audit readiness and internal audit perspective,” Patni said.
SAP India Vice President, Platforms and Technologies, Anand Raisinghani said with an increasing thrust from the Government to focus on leveraging technology to ensure tax compliances and undertake tax risk assessments, the tax and finance function of organisations need to adopt technology faster than ever.
As per the EY-SAP India survey, organisations are expecting to face significant challenges with respect to reconciliations, data, systems, processes, enables tax audit readiness, and compliance with the new TCS regime.
EY has developed ‘DigiTCS’ – powered by SAP’s Business Technology Platform – to offer an automated solution for TCS compliance.
Being hosted on SAP Cloud Platform, making it scalable, secure, modular and integrated with customer’s SAP ERP (Enterprise Resource Planning solution).
“Our customers need to stay compliant with the evolving regulatory tax framework. As SAP is the financial system of record for the majority of Indian enterprises, we responded swiftly to ensure required provisions form part of our solution offering,” Raisinghani said.
He added that with EY, SAP delivers DigiTCS that will empower companies to adapt to the new Tax regime providing them ease of deployment, security and no disruption to their existing process and business.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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