New approaches in managing

tax compliances Addressing CFO Forum

Presented By

Pavan Peechara, Director – Udyog Software I Ltd.

© UDYOG. All rights reserved.

This presentation is for informational purposes only and may not be incorporated into a contract or agreement.

Disclaimer

• The report contains our analysis of secondary sources of published information. While information obtained from the public

domain has not been verified for authenticity, we have obtained information, as far as possible, from sources generally

considered to be reliable.

• Our analysis is based on the prevailing market conditions and regulatory environment and any change may impact the

outcome of our review.

• Our report makes reference to articles published by KPMG, Deloitte, Aberdeen Group, Thomson Reuters etc. this

indicates only that we have (where specified) undertaken certain analytical and research activities on the underlying data

to arrive at the information presented; we do not accept responsibility for the underlying data.

Projected complexity in 2013

India & Indirect Taxation

Sources: KPMG Consulting Report, Doing Business: World Bank & International Financial Corporation Portal

Number of taxes 11

Time (Hrs) 175

Sales Tax/VAT 9.6%

Paying Taxes Rank 69

USA

India

Number of taxes 33

Time (Hrs) 243

Sales Tax/VAT 12.5%

Paying Taxes Rank 152

India ranks 164 in Tax Complexity

among 183 countries

Complex reporting

requirements

Ambiguity in tax rules

Frequent Tax

changes

Plethora of taxes

Indian Indirect Tax: Burning Issues

According to Deloitte report;

An average of 2-3% of top line is lost (recoverable

if automated) due to overpayment of indirect

taxes globally @ an average 16% as Indirect tax.

In India, we are liable to 22-26% of indirect taxes.

Our loss could be much higher!

Biggest burning Issue

Level of surveillance by indirect tax authorities In past 12 months, your indirect tax risk has:

In the past 5 years, Indian government tax department spent significantly in automation

Sources: Deloitte India Indirect Tax Burning Issues Survey December 2012; KPMG Consulting Report

Current Scenario: US & Europe

• Unambiguous tax structure as compared to India

• Less number of returns against India

• Much better IT adoption overall in US & Europe

Globally things are much simpler but still CFOs are investing more in

best of breed solutions for tax automation

Global CFOs opinion on role of technology in indirect taxes and importance of

them to their business today and estimate of its likely important in 3 years

Sources: KPMG International Benchmark Survey March 2012

Challenges in tax automation

Due to dynamic changes in the statutory compliance requirements of government and with current adopted processes, companies might face a challenge with regard to existing information visibility and reconciliation

Implementing tax changes requires strong functional/technical expertise and is expensive

Enterprise automation changes are driven by ERP vendors as a part of the product roadmap while tax changes are driven by government regulations which are to be addressed on priority basis

Provisions for taxation knowledgebase, auditing capability and review-approval workflow are not present in ERP’s.

Localization for large organizations using multiple ERP’s is not viable as their Business Processes are span across multiple systems

Global trends in tax automation

Global enterprises are opting for best in

class tax solutions rather than investing in

ERP’s for Tax automation.

Tax determination, calculation and reporting

is done outside the ERP while ERPs are

tasked with providing the applicable tax data

to such products.

For tax processing, large companies tend to

use products like Sabrix, Vertex etc. while

SMEs prefer products like Avalara,

SpeedTax etc.

Global ERP vendors have come up with

built-in support to such products. To ensure

complete statutory compliance, organizations

have implemented audit-friendly methods.

1 2

3 4

Indirect Tax Automation –

Recommended Model

Workflow, Policies & Processes S

olu

tio

n R

eq

uir

em

en

ts i

n In

dia

Tax Planning and Interpretations

Rapid adaptability to tax change

Accurate tax determination

Manage credits and exemptions

Seamless integration with ERPs

Consolidate disparate data sources

Real-time visibility into tax processes

Returns Management

Sources: As per KPMG, Deloitte & Aberdeen Group reports mentioned in references

Core to tax automation –

Unique with us

Dynamic Delta Capture

Audit Friendly Versioning

Workflow Management

Complete Tax Engine

Efiling

δ Missing data

Integrator Infrastructure

A complete solution to address

your needs

I

N

T

E

G

R

A

T

O

R

Collect Process File

ERP and ecommerce systems processing &

holding business transaction information

Tax processing - set

off computations by

tax type

Reporting

and filing for

taxes

System for calculating

taxes for individual

transactions

Compute

iTax eFile

Transactor

Udyog products

Other 3rd party products

Other external systems / Business

Automation Systems

Real time tax

calculation

Add Tax

A technology framework that allows business to easily adapt to continual changes in taxation

Taxilla: Key Features

Web based platform with SaaS enablement

Built on J2EE, Spring and Hibernate

platform

Fine-grained access control with role

based security

Tax computation, processing and filing

infrastructure

Review/Approval Workflow for key

processes

Management Dashboards

Automated Tax news and updates

Ask an Expert with Knowledgebase

Tax Calendars and Notification Tracking

Document Management

Built-in Cloud based ETL framework for

data transformation

Connector framework for major ERPs

Taxilla: Tax Automation on Cloud

About Udyog

20 years of direct and indirect tax automation leadership; 13,500+ tax automation clients.

Key Clients - MNC’s like Delphi, AKZO, BMW India etc.; Indian Majors like Kirloskar, ITC

Filtrona, L&T Infra among 100’s; 1000’s of other companies depend on Udyog for their indirect

taxation needs.

Our Expertise and Offerings- Our unique Tax processing engine is configured to all Indian

taxation.

We are the Tax Automation experts

Product

Development

Implementation

Services

Support

Management

Udyogtax.com

One Stop Portal for all

Taxation information & needs

CENVAT Service

Tax TDS EXIM VAT SEZ Works

Contract XBRL

Taxilla

Automation for Transactional

Oriented Taxes

Functional Coverage

References

• http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/vat-gst-benchmark-2012.pdf

• http://tax.thomsonreuters.com/wp-content/pdf/indirect-tax/0420-AI-Indirect_Tax_Mgmt_ERP-WJNC-10.pdf

• http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/Tax/us_tax_GlobalIndirectTax_100710.pdf

• http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/US%20CFO_Indirect%20Tax_509.pdf

• http://www.deloitte.com/assets/Dcom-India/Local%20Assets/Documents/Indirect%20Tax%20documents/Burning_Issues.pdf

• http://indirecttaxtechnology.com/2012/04/10/systems-indirect-tax-automation-and-plug-and-play/

• http://indirecttaxtechnology.com/2013/02/06/sap-indirect-tax-functionality-and-client-needs/

• http://www.indirecttaxfunctioneffectiveness.com/Benchmarking_VAT_risk.html

• http://www.norcaloaug.com/seminar_archive/2010_training_day_pres/5_01_patel.pdf

For details, contact:

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Branch/Marketing Offices: Pune, Vapi, Nasik, Delhi, Bangalore, Ahmedabad, Kolkata

sales@udyogsoftware.com | www.udyogsoftware.com

Thank You

© UDYOG. All rights reserved.

This presentation is for informational purposes only and may not be incorporated into a contract or agreement.