Chartered accountants and tax consultants have hiked their consultancy charges by at least 15 per cent for small business and over 30 per cent for big business owing to increased tax filings, compliance and accounting work under the new Goods and Services Tax (GST) regime, which came into force on July 1.
“Due to increased compliance and filings in the new tax regime, chartered accountants and tax consultants have already hiked their fee by 15 per cent. And the entire cost of compliance will now fall on the traders who are struggling to cope with the new laws,” said Viren Shah, president, Federation of Retail Traders Welfare Association, which represents 96 per cent of traders across Maharashtra. At least two lakh shop-owners in Mumbai alone are a part of this welfare association.
In the run-up to GST, tax consultants were charging a fee for an impact analysis report — a detailed study to gauge the impact of the new regime on business procedures and margins — and a monthly retainership for compliances. “The retainership fee has gone up by 30-50 per cent,” said a Mumbai-based tax consultant, who did not want to be named.
According to the Institute of Chartered Accountants of India, GST is expected to bring in an additional Rs 15,000 crore in consulting fees.
Experts say the country has about three lakh sales-tax accounting practitioners who mostly assist small and micro businesses comply with tax laws. Apart from this, there are 1.5 lakh chartered accountants employed in India.
“With the introduction of GST, the complexities will definitely go up. As of now, Service Tax assessees are required to file two half-yearly returns and some VAT assessees are required to file quarterly returns. But in GST, all of them will have to file three returns each every month, leading to substantial increase in volume. Besides, other issues like widening of scope of reverse charge transactions, introduction of TDS, TCS, etc., will add to these complexities,” said Amit Maheshwari, partner at Ashok Maheshwary & Associates LLP.
Major tax consultancy and law firms have beefed up their GST teams, too, for compliance, filings and advisory roles, and hired several retired government officials with knowledge of indirect taxes as they see a huge advisory opportunity in the new regime.
“Before July 1, there was a huge opportunity for consultants to help corporates migrate to the new system and accounting processes as required by GST. The new law has kicked in, and there will be a high demand for compliance and advisory work. GST has thrown open a huge opportunity for consultancy firms, chartered accountants and tax professionals,” said Bipin Sapra, partner at consultancy firm EY.