India Inc is GST ready, but channel partners struggle

Corporates have worked tirelessly over the last 18 months to ensure they are ready to conduct business as the government rolls out the goods and services tax (GST).

Companies across fast moving consumer goods, consumer durables/electronics and retail such as Hindustan Coca-Cola, Dabur India, Nestle India, Videocon Electronics, Whirlpool of India, BSH Household Appliances, Acer India, Shoppers Stop, Bisleri, Heritage Foods, Samsonite International are ready. However, the same is not true with their channel partners.

Dabur India Ltd said that the company was fully geared up for GST as it had engaged an external consultant for the past one-and-a-half years to work on GST. According to CFO Lalit Malik, Dabur had completed all the groundwork regarding amendments in its IT infrastructure much ahead of the actual announcement to ensure a seamless transition.

"We have also been supporting our channel partners to help them become GST-ready. While we and our larger partners are completely geared, some of the smaller suppliers and partners may not be completely ready yet. We have been holding training sessions to help them understand the new business scenario and become GST ready," said Malik.

The ground reality in the distribution channel can be easily gauged from the results of a survey conducted by EasemyGST, which shows that half of the respondents are still not aware of the GST compliance calendar.

"Similarly, 50% of the participants are unaware of the GST compliance rating mechanism, which means that they are not fully aware of the consequences if they default. An alarming 74% of the participants do not have a list of GSTIN for their vendors and distributors, which means that the business value chain will lack coordination. About 70% of the participants have not chosen a service provider for filing GST," the report said, adding that there is still much ambiguity around how GST will impact their respective industry.

Gunjan Srivastava, MD and CEO, BSH Household Appliances, said the company, including channel partners, are almost getting there in terms of preparedness for the rollout as GSTIN details are exchanged, systems are being readied, users are being trained currently. "Opting for a black out prior to the roll out dates to ready the systems will enable us to be ready after July 1, to be up and running," said Srivastava.

He added that areas like the ability of the GSTN portal and network of the government to handle the scale of transactions anticipated are something to look into. "Even today issues are being faced in getting new GSTINs / GSTINs modified. E-Way bill rules also need clarifications," said Srivastava.

Govind Shrikhande, customer care associate and MD, Shoppers Stop Ltd, said the retail chain has had a team in place almost six months ago to work closely across operational departments and partners. "We are 100% ready to implement GST in all respects. However, there could be issues that may need to be looked at in terms of rates for specific categories as well as process. For any big change, there would be execution challenges," he said.

Interestingly, companies like Nestle India, Hindustan Coca-Cola, Videocon, Acer India, Woodland Worldwide, GSK Consumer Healthcare, Heritage Foods, to name a few, have worked with experts to train their vendors and channel partners to become GST ready.

Chandrahas Panigrahi, CMO and consumer business head, Acer India, said, "We have conducted sessions and workshops in association with experts who briefed our channel partners and will help them get a clear understanding on GST. We have also rolled out GST programmes for retailers and consumers during the transition period."