Online tax filing platform ClearTax plans to tap a tenth of the estimated 10 million small businesses in India once the goods and services tax (GST) is imposed in July.
The SAIF Partners-backed tax-filing start-up, which raised $12 million in Series A funding last year, facilitates online tax filing and tax saving for individuals and small businesses through chartered accountants.
The Centre expects to roll out the GST on July 1. The GST Network, the information technology backbone for the tax, is expected to start live testing from the first week of May.
“We have access to 225,000 small businesses through 10,000 chartered accountants and more than 1 million individual users. About 10 million small businesses are expected to sign up for the GST. Our goal is to tap 1.2 million businesses within a year of the GST launch,” said Archit Gupta, founder and chief executive officer, ClearTax.
Small businesses undergo tax compliance twice a year now but will have to undergo 37 compliance procedures in the GST regime.
With GST digitising tax filing, firms like ClearTax will have to scale up their technology platforms. “We have invested $5 million in the technology ramp-up to accommodate the huge data flow. With the GST, billions of invoices will be uploaded online,” said Gupta.
The company is conducting webinars and GST training for chartered accountants and other experts. It is also developing exclusive GST solutions for businesses and is in talks with 200 enterprises in India and abroad.
“Big enterprises are planning to buy our GST enterprise solution. We are negotiating 200 deals and some are in the final stages,” said Gupta.
The Bengaluru-based company sees a big opportunity in this area because there are not many website-based tax-filing platforms. Companies such as Tally or Intuit have products based on ERP or the cloud for tax compliance.