CHENNAI: IndiaFilings, a cloud-based services platform helmed by Chennaiite Lionel Charles has dedicated itself to enable entrepreneurs kick-start and boost their venture
What would a budding entrepreneur do to file Goods and Service Tax (GST) returns? Will he hire an accountant or possibly try to fathom the various forms that need to be filed at a particular time in a financial year?
But none of these questions would have come to the mind of businessmen when the GST was rolled out on July 1, two years ago. With the government bullish that it is a reform which will transform the country, businesses were looking forward to the positive changes that the tax reform was set to bring.
Today though, there are questions that need to be answered. Helping businesses settle their doubts is IndiaFilings, a firm that wants to make India an easy place to do business. Founder and CEO, city-based Lionel Charles, speaking with CE reveals what he thinks is an important attribute to do business, the current scenario surrounding GST and the government’s vision of the $5 trillion economy.
Could you tell us about how IndiaFilings was conceptualised?
IndiaFilings was started to make it easy to do business in India. We kicked off by tackling the problem of starting a new business in 2014. Since then, we have helped start over 20,000 businesses and have made it possible for an entrepreneur from anywhere around the world to start a business in India through an app. After incorporation, we saw that entrepreneurs were struggling with tax filing, GST and other compliances. So, we launched our Ledgers platform in 2017 for accounting, GST filing and Income Tax filing. Today, over 40,000 customers use Ledgers and we are growing aggressively.
Is this your first stint at starting a venture?
IndiaFilings is not my first venture. After studying in the USA, I returned to India in 2010 and tried starting a nutraceutical import business. But, that business failed. However, I had learnt a lot about digital marketing while starting that business. So, I took a lot of that learning and launched IndiaFilings.com. In business, the biggest failure can be not doing anything, as business is all about doing something, getting better and learning from mistakes.
How has your company grown from its early days?
We started with two people in a small room. Today, we are a team of 500 people across seven offices. We are profitable and are targeting over `100 crore in revenue in the upcoming financial year. We have been able to achieve this while being bootstrapped.
How do you think GST has changed the scenario in India?
GST is a game-changer for India. Before GST, the price of a product could differ from state to state based on the VAT. GST has made India one giant market. This is a huge advantage for businesses that are built on transparency and ones who can compete efficiently. Without GST, high growth rates would not be possible and the businessman would have to contend with more compliances and be limited to certain regional markets.
Despite its positives, GST has still brought along with it more questions. Some states are yet to get their share from the Centre. Your take on that.
Yes, there could be a delay in some states getting their share of payments. But, it has to be understood on a case-to-case basis. Most businessmen do want to be tax-compliant and want to pay taxes. But, when their margins are hit or they are having a liquidity crunch themselves, GST collection lags. The government is now working on various measures to push growth. India needs a growth rate in excess of eight per cent. If that can be achieved, it would solve various problems like GST collection, unemployment, demand etc. The fundamental problem is we need faster GDP growth. If that can be achieved and Indian businesses perform well, other problems would be sorted.
Could you tell us how many clients you handle at the moment and general sentiments about GST or tax filing in Chennai?
We service over 70,000 SME clients. Overall, Tamil Nadu and Chennai have a very good population which understands the importance of taxation — wherein people generally want to pay taxes and be compliant. However, say a business is not doing well and the promoter is having to pay taxes by pledging assets or having to prioritise tax payments over business development or improvements, then it becomes a tougher proposition. If our businesses do good and there is growth, by nature our businessmen are happy to pay taxes and be compliant.
Has the economic slowdown reduced tax filings? The number of tax filers is growing. However, tax filing is not growing at expected levels. The fundamental is business growth and income growth. If that can be set right, growth in tax filing and tax payment will happen automatically in India.
Basics
GST filing can be done very easily through the businessowner on the GST portal for free.
Persons or businesses registered under GST have to file GSTR-3B and GSTR-1 return.
In GSTR-3B return, the business would have to provide details of sales and purchases — compute GST liability, claim an input tax credit and remit the dues to the Government.
GSTR-1 contains details of sales broken down by B2C and B2B with much more detailed information.
Income tax return also has to be filed by businesses in form ITR-2 or form ITR-3. If it’s a partnership firm, ITR-5 return has to be filed and for companies, ITR-6 return has to be filed.
Services offered
“If a business owner is not able to understand the nuances, they can outsource GST filing to IndiaFilings at less than `9,000 per year. We then provide them with an accountant and Ledgers GST software and take responsibility for filing the monthly returns. All theses returns can be filed online through our website with very minimal experience and we also have call centres to help taxpayers file such returns,” said Lionel about a couple of services his firm offers.
Government’s vision and reality
“The government’s vision to build India into a $5 trillion economy. For the same, a strong tax system foundation would be required. I think GST and Income Tax are geared to help with that — provided we are able to work out all the bugs and make the process seamless for the taxpayers. Finally, growth is the most vital. If that can be corrected, everything else will fall in place very quickly.”
With fear comes negativity
“There is a lot of negativity around GST amongst businesses since it is new and some fundamental concepts of it are misunderstood. When something is new and people don’t understand, they are afraid of it. That can only change with understanding and learning. Also, there have been various teething problems with the GST portal during the launch, which also led to confusion. But, the GSTN and GST portal system is a massive undertaking. With technology, there are always bound to be issues and systems get better with time. For example, Windows as an operating system has come a long way in the last decade.”