If you follow the finance market and the emerging trends of it you will see that there is a steep rise in the demand for professional accountants in India. Especially in the business sector, large or small, all seems to rush for the best accountants and accounting service companies to maintain their financial records. You may tend to think about the reasons for such a surge in the demand and why the accountants are flourishing. Is it due to the recent regulatory changes made by the finance ministry that has fueled the demand for accounting services or is there any other reason. Well, a through probe into the matter will make things clear to you.
The change in scenario
The financial market and its policies have dramatically changed over the years and recently this change has been more significant. Since 2014, there have been a lot of reforms initiated by the Indian government to promote cashless and clean economy in the country. The most significant reform you may remember is the demonetization wherein the 500 and 1,000 rupee currency notes that were in circulation were suddenly declared invalid legal tender from the stroke of midnight in November 8, 2016. Later, the Goods And Services Tax or GST was rolled out in July that brought state and central indirect taxes under one umbrella. This made things more difficult thereby raising the demand of the professional accounting services in India.
Effects of GST
As it is, after the demonetization the country saw about 9.1 million new assesses by May 2017 into the tax system. This is because people started to realize that it was virtually impossible for them to hide their cash or ‘black money’ and income from the finance authorities of the country. Add to that, the GST that came into effect in July required all businesses having a turnover of more than 2 million rupees or $31,000 to register their business as well as digitize all their transactions. This further raised the demand of the top accounting firms in India for these businesses to ensure that they are prevented from tax evasion issues.
Creation of transparent invoice trail
No matter whatever is the threshold fixed by the government of India the reformed Tax and Economy Policy after the implementation of GST opened the door to a dual value-added tax. According to this policy the central and state governments both concurrently tax the complete value chain. However, the value addition in the services and manufacturing industries are vested on the state government while on the other hand the value addition in trading was retained by the central government. This made things all the more complicated to create a transparent invoice trail of all transactions which the top accounting companies in India are experts in facilitating keeping the accounting procedure simple.
Use of the GST portal
Another significant reason for the rise in demand of the professional accounting services in India is the difficulty in using the GST portal to ensure the proposed invoice matching. Businesses feared noncompliance and hired such services to reduce complications. This GST portal is most important in the new IT system created by Goods and Services Tax Network or GSTN. This allows the state and central government to monitor and administer the new tax system more proficiently.
Providing a lot of opportunity
Therefore, it can be concluded that the new reform in tax system in India has provided the business organizations with an interface to register, assess, record transactions, and file tax returns easily eliminating chances of false claims for tax credits. This provided new opportunities to the accounting firms.