“All Tata brands are going to benefit and gain market share in the post-GST environment,” said Harish Bhat, brand custodian at Tata Sons, the holding company of the group. “Of course, it requires a lot of preparation and it requires us to put in place supply chain efficiencies through which we can leverage the full potential of GST,” he told ET.
India is expected to implement the goods and services tax (GST) — merging almost all existing indirect taxes in the country into a single taxation system — in July this year.
Bhat, who is also chairman of Tata Global Beverages and a director on boards of four more Tata companies, became the brand custodian of Tata Group in November as part of leadership changes undertaken after the $100-bn conglomerate removed Cyrus Mistry and his close group of advisers, citing underperformance and poor corporate governance standards.
Tata Sons recently organised a seminar for all group companies on GST to help them with the implementation of the new taxation system.
GST will have a far-reaching impact on almost all aspects of business, including pricing of products and services, supply chain optimisation, IT, accounting, and tax compliance systems.
“We have to evolve most efficient supply chain in the post-GST era. We have to ensure that goods and services reach our customer in the most seamless manner and cost efficient manner,” Bhat said. “The reconfiguration is different for different industries and different companies have been pursuing their own route.”
Reconfiguration is happening throughout the supply chain, right from the vendor points to the last mile, covering warehouses, clearing and forwarding agents and stockists, Bhat said. He also said companies have made significant headway in setting information technology systems to ensure all the companies and their retail partners are GST compliant.
Tata Group companies will begin work on repricing and repackaging products once the Indian government gives more information on the tax slabs for different goods and services. The group has 29 publicly listed enterprises with a combined market capitalisation of about $116.41 billion, or about Rs 7,75,860 crore.
“The earlier the GST is rolled out the better it will be for the industry. July will be good date to roll it out because the transitory impact is out of our way before we reach the festive season of this year,” Bhat said. “Brands of Tata Group will find an external environment that provides level playing field for our brands,” he said.