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    For this startup, GST is good business

    Synopsis

    GSTSTAR began preparing for the vast tax-compliance market that GST would create when no one knew if would turn into reality.

    ET Online
    Name of the Company: GSTSTAR
    Launch date: January 2016
    Founding team: Shailesh Kumar Agrawal, Balaji GS Rao, Badrinarayan Sahoo and Chaithanya Mohana Anisetti
    Location: Bengaluru
    Funding raised in 2017: $1 million
    Overall funding raised since starting up: $1 million
    Strength of the company: 70+
    Industry it operates in: Governance and tax compliance

    The four founders - Shailesh Kumar Agrawal, Balaji GS Rao, Badrinarayan Sahoo and Chaithanya Mohana Anisetti - of GSTSTAR had put their trust in Goods and Services Tax (GST) way back in January 2016, a time when very few would bet their money on implementation of the biggest overhaul of the taxation structure in India.

    Only much later, in late 2016, the GST law picked up steam and the industry started looking at it with a level of certainty. The startup, says cofounder Agrawal, spent that time doing the ground work for their startup.

    "There was a lot of uncertainty around GST at that time, and it was only in late October that it picked up speed. The time before that we spent in doing the ground work, doing a lot of market research, collecting data. We were closely watching this space with a lot of anxiety, but also certainty that the law would pass," Agrawal reminisces.

    The gust of opportunity
    After GST became a reality on July 1, patience of the startup paid off. Growing nearly 100% month-on-month in terms of clients, the company is reaping rewards of its long preparation.

    "It was only in August 2016 that we started focusing on developing our products, ramping up our team. Since the launch of GST on July 1, we have seen a good traction. We already have thousands of clients using our products and services, with the number doubling every month," Agrawal claims.

    The transformation to 'One Nation, One Tax' has attracted many companies to offer their services and products to businesses grappling with the requirements of compliance. Agrawal says the 17 months of preparation enabled GSTSTAR to understand the issues and perfect their products to get ready for the expected onslaught of helpless business owners trying to figure out technicalities of GST.

    "Our USP is the combination of knowledge, technology and services we provide to our clients. GST is foremost a technology-based tax reform, and we have created a platform where our clients receive quick and contextual information on developments and compliance. Second, we have built a tech-enabled platform which is not only easy to use, but also has a lot of intelligence built into it. And, finally, we provide end-to-end services to our clients through our products and through our partner network," Agrawal says.

    GSTSTAR has tied up with Alankit Limited, a GST Suvidha Provider, to help clients who need assistance with registration. GSTSTAR provides its clients help with compliance guidance through a bouquet of services. It also helps clients streamline their businesses to meet the requirements under GST.

    Targeting all sizes
    The company divides its services under two heads-GSTSTAR Cloud (for SMEs) and GSTSTAR Enterprise (for corporate).

    GSTSTAR Enterprise is meant for large enterprises to integrate and scale their operations according to GST. Without naming any, Agrawal claims the company has more than 70 BSE 100 companies as clients.

    However, it is GSTSTAR Cloud which Agrawal believes holds the key to scale. It provides a DIY model to SME clients as well as tax professionals along with tools to manage compliance requirements. Some of the services and tools provided by GSTSTAR Cloud are invoice management, inbuilt tax calculator, reconciliation of invoices, ITC receivable management, return preparation and filings, and analysis and reports.

    "The volumes are with SMEs. There are around 80 lakh registered SMEs in the country and, according to estimates, this number will go up by five to six times in coming years. We are here to provide them services," Agrawal says.

    The company, according to Agrawal, has more than 1,000 SME clients and is growing. Since knowledge and awareness are essential for those SME owners who are still reeling under the complete overhaul of the taxation regime, the company has a knowledge centre which provides its clients with required information. It also has a chat facility for its SME clients to deal with their specific needs. Furthermore, the company will launch a call centre this month to expand the support service.

    While several companies have jumped in to offer GST support services to SMEs in order to grab a size of the ever-expanding pie, Agrawal says GSTSTAR holds the edge in the experience that the team brings to the table. "Everyone in our team has a hardcore tech background, and we understand both tech and tax. This is where we win against the biggies. Several of our clients have chosen us over big companies because of this. This experience and expertise are our specialities while for big companies, GST compliance is only a vertical," he says.

    Agrawal has more than 20 years of experience in IT and finance. He headed corporate accounts and Indian tax team in Infosys. His cofounder Rao holds 22 years of experience in the IT industry.

    The founders registered the company as Clonect Solutions Private Limited in 2014 to provide governance and compliance consultation in the tax domain. It was in 2016 that the founders trained their sights on the massive market that GST was expected to create. The company then launched GSTSTAR in January 2016. It raised $1 million recently in funding from angels led by Mohandas Pai and Balakrishna Venkataraman. This money, Agrawal says, would bolster the product offering, apart from sales and marketing.

    Staring into the future
    Of its 70-plus employees, more than 50 are involved in GSTSTAR. Agrawal knows that given the size of the opportunity he has only scratched the surface. However, he already has his eyes set on future, which, he believes, would belong to those who could provide automation and analytics. This is the increasing focus of the founders while expanding their product portfolio. "We already have a couple of such products under development," Agrawal says. The company is already in talks to raise another round of Rs 2 crore by early next year to support its product expansion.
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    The Economic Times

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