New tax regime to create need for 1.3 mn professionals, India Inc rush to get GST math right
GST has infused optimism in the job market. As the goods and services tax rollout date nears, companies across sectors are rushing to get their GST teams in place, leading to a jump in demand for tax and technology professionals. The demand is being led by the FMCG sector, followed by consumer goods, pharmaceuticals, real estate, banking and insurance, as firms scramble to get the right team in place to benefit from the new tax regime, according to industry experts and executives at the Big Four audit firms.
According to tax consultants and experts, the GST portal where companies are registered will eventually have about 9 million assessees. If even 1 per cent of these are large companies requiring five people to handle GST, and 10 per cent is midsized firms that need at least one person to handle GST, the new tax system will have created demand for about 1.3 million professionals, they said.
While some of these roles can be performed by existing professionals from sales and other taxes, the need to hire new talent will still be very high, they said. On the tax side, lawyers, chartered accountants, cost accountants and tax consultants are in big demand, while on the technology side, companies are scouting for software professionals to ensure that the GST returns are synced with the government database.
“There has been an upsurge in indirect tax openings across the corporate sector and we see various positions such as GST manager, VP-GST, or GST team leader coming into vogue,” said MS Mani, senior director, Deloitte Haskins & Sells LLP. “While indirect tax function in various businesses has existed in the past, what we are witnessing now is not merely a rechristening of indirect tax as GST, but also the emergence of new positions amongst corporates,” he said.
GST is emerging as a key function within organisations because of the financial savings that will accrue on account of a well-planned GST system, and the difficulties that the organisation will encounter if the GST function is not in good hands.
“Since GST is a transaction tax, bad planning would impact revenues and profits and no corporate would like to lose either market share or profits, leading to the emergence of dedicated cross-functional GST teams in corporates,” said Mani. Technology talent There is also a big demand for professionals on the technology side, as GST has a lot of technology embedded in it.
The IT sector will need to provide integration, reporting and accounting solutions and platforms for most of the over 500,000 registered entities, who reportedly are still preparing for compliance with GST, said Saugata Bhattacharya, chief economist at Axis Bank.
Companies will also need sophisticated accounting and reporting and MIS systems to integrate into the tax network and to claim input tax credit. “Professionals with knowledge of cloud, big data analytics, banking and financial applications, etc., are in demand today,” said Ratna Gupta, director at ABC Consulting. Experts said GST will be a net job creator despite some roles, such as sales tax practitioner and excise consultant, becoming redundant due to increased operational efficiency.
Semi-skilled jobs According to experts, there will be high demand for semi-skilled workers, such as carpenters, masons, plumbers, electricians, draftsman, tailors, weavers, food technologists, and marketing jobs in the retail segment. People with vocational skills acquired at industrial training institutes are seen useful. “The sectors where jobs are likely to be created are low-cost housing, textiles, leather and food processing,” said VS Krishnan, tax advisor-policy advisory group, EY India.
“This is largely because the duty in textiles has been brought down and steps for formalisation of the sector has been initiated, which may encourage domestic and foreign investment, especially in the apparel segment,” he said.
Government jobs The complexities associated with GST and the elaborate procedures that are required to be undergone could also lead to job creation in government bodies, feel some experts. “The central indirect tax authorities and state indirect tax authorities, which are going to administer GST, may not have enough officials to handle the workload that they will be confronted with once GST is launched,” said Mani.
Temp hiring is expected to receive a big boost during to the GST regime. All sectors, except cement and IT/ITes, are likely to create a significant number of temp jobs, according to a Teamlease report on GST and jobs. Blue-collar and front-end sales roles are likely to be the significant beneficiaries of this trend.
SHORT TERM NATURE
Experts sounded a note of caution that job creation due to GST could be of a short-term nature and the people being hired at fancy salaries might become redundant once the technology is in place. “What remains to be seen is whether the demand of resources having a GST background is temporary or is this going to result in longterm positions across organisations,” said Mani.