V Balakrishnan and TV Mohandas Pai backed GSTSTAR is making it easier for enterprises to transition into new tax reform era
Bengaluru-based GSTSTAR is a comprehensive tech solution that caters to the GST compliance needs of professionals, businesses and large organisations.
While everyone else wasn’t quite sure of what GST would bring, this duo saw an opportunity. Their love for technology and the experience they had gained from their work in the IT, finance and tax sectors drove Infosys veterans Shailesh Agrawal and Balaji GS Rao to launch GSTSTAR in September 2016.
Hailing from a small town, Bharatpur, in Rajasthan, Shailesh brings 22 years of experience in IT and finance. His partner, Balaji, comes with 25 years of experience in the IT industry. He secured a BE degree from PES College of Engineering in electronics and communications and went on to add to his education portfolio an EGMP from IIM Bangalore.
The duo foresaw a digital India where compliance and governance are driven by technology; the implementation of GST aligned with their vision and they started working for GSTN in early 2016.
The tax, which came into effect on July 1, 2017, across India, brings various indirect taxes such as VAT, excise duty, and service tax under one umbrella.
How did it line up with their startup? The duo started by analysing regulations and developing with the existing organisational structure. They closely monitored development in GSTN and API specifications. Bengaluru-based GSTSTAR claims to be the first company to start testing APIs in the GSTN’s sandbox environment.
The level of IT adoption in businesses and automation varies. Many disparate systems get added over a period of time with partial or no integration. Shailesh believes that technology can solve most of these issues. That’s how they started their GSTSTAR journey to build niche products in the area of compliance and governance.
Tax compliance is critical for any business, and GST is a major tax reform with technology at its core. The purpose of GSTSTAR is one: To bring tax and technology together.
Creating a hassle-free GST tech product
GSTSTAR offers products and services for GST compliance and helps enterprises, SMEs and professionals transition seamlessly into the GST regime.
Under the guidance of V Balakrishnan and T V Mohandas Pai, GSTSTAR is helping “companies and tax professionals with the imminent tax reform”.
The solutions GSTSTAR offers include Customisable Enterprise GST Platform, Self-Subscription Cloud-based GST portal (GSTSTAR) and GST-related Services and Utilities. Under the Customisable Enterprise GST Platform, the offerings include GST return preparation, filing, reconciliations, payments and refunds, integration into accounting system/ERP for invoice information exchange, virtual KP/BPO services for registration, manpower augmentation and customisation as per requirement.
With strong management and compliance background, businesses can rely on GSTSTAR for consulting and solutions in the GST era.
“With GST, the existing 80 lakh businesses that are under the tax umbrella are expected to grow by up to 3.5 crores. GSTSTAR considers this transformation not only a tax reform also a technological revolution. Driven by technology, the GST tax regime will make India a true Digital India for all businesses and benefit the end consumer with a unified tax regime,” says Shailesh.
Growing at scale
GSTSTAR was started with a capital of Rs 50 lakh, all the savings of the duo. The startup raised $1 million in June this year from Mohandas Pai and Venkatraman Balakrishnan.
“GSTSTAR began with a basic model, which covers return filings and reconciliation. We have now added invoicing and other value-added utilities,” says Shailesh.
The startup has also developed multiple deployment models and offerings for various segments like SMEs, tax professionals, large enterprises and aggregators like banks.
Recalling the challenges GSTSTAR faced during the initial stages, Shailesh says GST brought along uncertainties in the beginning and things changed rapidly in terms of regulations, procedures etc. and hence API specifications. Coping with the fast-changing requirements was a challenge that continues.
“In a startup one has to wear multiple hats, sometime as a salesman, business analyst, accountant, operations manager, product architect and trouble shooter,” says Shailesh, recalling the journey.
GSTSTAR Cloud is offered for a monthly subscription charge that starts as low as Rs 200 per GSTIN per month. The startup also has a licence model where revenue is based on one-time licence fees and recurring annual maintenance charges.
“We have offerings for all kind of businesses, be it SMEs, CAs/tax professionals, large enterprises or aggregators like banks. We see a huge scope for us to grow in terms of revenue in this market while maintaining a balance of affordability and quality services for our subscribers and licensees,” Shailesh says.
For the licence model, the startup has developed a white-labelled solution and tied up with a leading private sector bank to provide GST solutions to all its SME clients. They have started implementation of GSTSTAR for a diversified financial services company for the license model, which will give them an assurance of invoice data confidentiality, scalability, integrations with ERP software, customisations and many other features.
The way ahead
GSTSTAR has more than 70 employees with a presence in Mumbai and Delhi. The startup claimed to have catered to more than 1000 SMEs and large scale enterprises till date.
“GST is completely new for the Indian industry and our focus is on product maturity and expansion of the scope of solutions we provide. After that, we wish to explore various business applications relating to tax and finance. Across borders, we see a regime change in Dubai with VAT being introduced in the near future and see good scope there,” Shailesh says.
There are other startups who are also betting high on providing GST solutions to SMEs and Enterprises. To name a few would be CountMagic which allows businesses to generate GST compliant invoices, manage purchases, create inventory, make payments, monitor expenses and generate returns. Master India offers access to GST APIs in the original form, available in synchronous as well as asynchronous mode.To consume the GST APIs, the taxpayer will either need to develop self-made Compliance Application, or use Master India’s Compliance Application which comes integrated with the GST APIs.