Managing GST compliance using technology

In Tax

Our DigiGST® offering hosted on a secure cloud is your single-point solution for GST compliance.

Related topics Tax Tax planning Tax compliance

The team

Venkatesh Narayan

Venkatesh Narayan

Tax Technology and Transformation Leader

Uday Pimprikar

Uday Pimprikar

EY India Partner and National Leader – Indirect Tax

Introduced in July 2017, Goods and Services Tax (GST) has been a game-changing tax reform in India. GST has laid the foundation for a more efficient tax system, has rationalized the tax structure and simplified the compliance procedures by replacing multiple central taxes and duties, as well as local state taxes.

A key component of GST is the automation of compliance procedures to reduce errors and increase efficiency. GST requires greater integration of tax domain knowledge and technology, as compliance has become paperless and data-intensive, with sector-specific nuances.

The digitalization has also created a new paradigm in tax administration and compliances.

Essentially in the new ecosystem, organizations have been imposed with significantly more onerous responsibilities of being granularly true and correct in relation to tax reporting and have been made materially responsible for the compliances of third-party in the supply chain.

The legislation also imposes higher corrective implications in case of errors resulting in short payment of taxes or incorrect availment of credit.

Besides this, the new paradigm mandates a higher auditable demonstration of bona fide. Furthermore, the dual tax mechanism adopted by India leads to higher risk of blockages, leakages and incorrect treatment of taxes.

What EY can do for you

EY, being the one of the largest ASP-GSP (Application Service Provider – GST Suvidha Provider) solution providers, acutely realizes the changing compliance landscape. DigiGST® has the ability to granularly deal with the reporting requirements and can control the enhanced risks. The solution is a secure cloud platform that is intelligent, robust and scalable to meet the GST compliance needs of all. DigiGST® also assists in enabling the corporates to handle the cross-functional work-related processes seamlessly.

Key benefits

  • Data privacy

    DigiGST® achieves data privacy via an end-to-end encryption of data, be in transit or at rest. It has an in-built advanced security to prevent data theft and we provide 24X7 data monitoring by using EY’s own Security Operations Centre (SOC).

    DigiGST® achieves data privacy via an end-to-end encryption of data, be in transit or at rest. It has an in-built advanced security to prevent data theft and we provide 24X7 data monitoring by using EY’s own Security Operations Centre (SOC). 

  • Intelligent

    DigiGST® is enhanced with the evolving GST changes to provide intelligent tax analytics. The robust solution is capable of conducting intelligent validations, with a list of more than 200 validations ranging from a duplication check, GST Identification Number and Point of Sale (PoS). These validations are pivotal for meeting the demands of accuracy at the granular level. 

  • Customizable

    DigiGST® has the flexibility to customize the needs of different companies, business units and sectors with a robust in-memory multi-level reconciliation for timely error detection and to avail appropriate credit.

  • Working capital management

    DigiGST® can help reduce working capital blockage through appropriate tax payment, timely credits and reporting. This helps in achieving efficiency in cost of compliance with cloud services model.

  • Analytics and reporting

    DigiGST® comes with insightful and intuitive real-time reports. These reports and analytics are essential for clients in mitigating tax risks and material costs.

  • Easy to deploy and manage

    The solution does not require any additional hardware or software requirements and keeps the system maintenance costs in check.

  • End-to-end compliance

    The suite helps monitor the GST compliance of the company’s business ecosystem including supply-end vendors and delivery-end distribution partners.

  • Helps in keeping records

    The solution keeps a trail of decisions taken and reporting done to prove bona fide data source, as also assist in identifying problem areas and discrepancies in the processes.

  • Management of tax costs and risks

    Intelligent analytics provides insights on the areas of leakage and thereby, brings tax efficiencies. Our insightful dashboards also assist in efficient tax management as also astute commercial conduct and negotiations with stakeholders.

Seamless transition

These three easy steps will ensure a seamless migration from your existing provider to DigiGST®.

Seamless transition

Collaboration with SAP

EY and SAP have collaborated to offer DigiGST® on SAP Cloud PaaS services and clients’ SAP enterprise resource planning (ERP) platforms ECC and S/4.

All the business logic related to GST return preparation and Annexure-2 PR reconciliation is implemented on cloud. GSTN Application Programming Interface (API)are invoked from the cloud platform to save the data to GST Network (GSTN) and file the GST return. The summary and transitional data that is most relevant for business users is made available for the seamless integration with the ERP. This potential reverse integration has tremendous benefits on the organization’s cross functional automated work processes. To summarize, ERP has the most relevant user interface and workflows, the complete business logic and full-fledged compliance functionality is available on cloud platform.

Seamless integration between ERP and cloud application is achieved using secure APIs (for forward integration from ERP to cloud solution) and using APIs over SAP Cloud Connector (for reverse integration from cloud to ERP).

In addition to the inherent strengths of the solution, there are several advantages to DigiGST® being a collaboration between EY and SAP.

Collaboration of DigiGST and SAP
Key benefits
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  • New compliance regime is ready

    At a conceptual level, even before enumerating the benefits of DigiGST® SAP, it is pertinent to note and appreciate that the compliances mandate under the newer tax regime cannot be handled by solutions that merely assist in reporting transactions. The DigiGST® can handle the newer tax regime and is designed to assist organizations in their work processes to meet more onerous and granular requirements. The solution has been built by incorporating the tax domain knowledge of the one of the largest indirect tax practices in India and by garnering tremendous experiences in managing some of the largest compliances in the country.

  • Allows secure access to information

    Using this solution, businesses will be able to restrict the access of information to relevant business users based on an organization’s attributes such as sales organization, purchase organization, plant and profit centre that are applicable for their business users.

  • Provides real-time aggregates

    As the solution is built on SAP in-memory database, the aggregates on transaction data is built in real-time, enabling quick decision-making and improving operational efficiency.

  • Offers modular access

    The solution is packaged with multiple sub-modules, using reverse integration APIs, which can be independently enabled and disabled from the cloud platform based on customers’ preferences during onboarding.

  • Enables process extensions

    The solution will enable customized process extensions to be built on ERP by leveraging on the data fed back from DigiGST® cloud compute solution through reverse ERP integration.

  • Eases access to the GST compliance data

    GST compliance data submitted to the government, at the summary level, is made available in the ERP, along with the compliance ledgers.

  • Cross-functional integration

    The solution allows seamless integration of tax compliance into the ERP, thereby enabling organizations to handle their cross-functional work processes, compliances and mitigating tax-related commercial risks in an accurate manner.

  • Reduced risk

    Seamless integration of granular GST compliances to other commercial functions ensures reduced working capital and commercial risk.

  • Intelligent data analytics

    The solution provides insightful data analytics that facilitates organizations to take decisions regarding their GST compliance and credit utilization as well as provides them insights on purchase and sales trends.

  • Cost efficiency

    The robust integrated solution ensures better management of credit, which materially enhances the company’s efficiency in availment of credit, thereby, reducing credit blockages, risks and costs.

How to make the transition to DigiGST® on SAP?

All SAP users can easily transition their existing GST filings through DigiGST® Tax Compliance Integrator, which includes an extractor program and APIs for pushing the extracted data to cloud platform for ECC and using standard SAP document attributes. Customers can choose to build their own extractors and provide data as per EY API specification or can even customize and extend the sales and purchase extractor program, which has been designed to extract from SAP (supports ECC and S4) base tables related to finance (FI), sales and delivery (SD) and material management (MM)

DigiGST® is helping Indian businesses achieve compliance

(Figures for filings done till 11 November 2019)

28%

of the invoices reported through GSPs were reported through DigiGST®.

7%

of the invoices reported to GSTN were reported through DigiGST®.

Over

1,33,000

GSTR 1 filed through DigiGST®

Over

690 mn

invoices processed and submitted to GSTN.

More than INR

6,21,000

crore (over USD $ 87b) outward tax liability reported through DigiGST®.

Over

10,000

GSTR 9 auto generated through DigiGST®.

More than

1,000+

companies filed GST returns through DigiGST®.

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