“We view GST as a transformational tax reform that will go a long way in simplifying the tax administration and help improve the GDP. We are considering the potential of consolidation of our supply chain to derive synergies and improve efficiency in the post-GST scenario,” remarks Lalit Malik, Chief Financial Officer, Dabur India Ltd.
How has demonetization impacted Dabur Ltd?
As demonetization had hurt all the industry verticals, it impacted our business as well. In order to reduce the impact, we took necessary steps on the distribution side. To name a few, we provided credit on a selective basis keeping in mind the risks and revenue. We also helped the sub-stockists and the wholesalers to de-stock and come back with regard to the demand as and when there is demand. We also reduced our pipeline stock availability. In line with this, we have also aligned the production as well as the procurement.
How do you perceive GST as we move closer to the D-Day?
Initial industry sentiments are very cautious as they approach the GST deadline in driving up pipelines. We would like to control pipeline stock in the supply chain prior to the GST implementation in view of transition implications.
As the GST has finally got a go-ahead to get implemented from July onwards, how prepared are you to harness the benefits that the regime is slated to bring in?
As an organization, we have evaluated the impact analysis of the pre & post-GST scenario. We have also completed the groundwork regarding amendments in our IT infrastructure to ensure a seamless transition. We are awaiting the clarifications with regards to rates, classification, etc., for the final go ahead.
What are the implementation challenges you foresee and how are you planning to overcome them?
While we are fully aligned and prepared for the GST roll-out, the preparedness at both the trade and the vendors’ end are equally important for a seamless implementation of the new systems. We are reaching out to our trade partners and supporting them in all manner possible to ensure a smooth transition to the new GST regime.
How are you strategizing supply chain to gain maximum expanse and scope post-GST?
We are considering the potential of consolidation of our supply chain to derive synergies and improve efficiency in the post-GST scenario.
How do you see companies such as yourself adopting the new methodology so from 1st July onwards yes that structure will be in place but when do companies start reaping the benefits and kind of adjusting their own financials and their revenues as well as the tax implementation, how much time would that take?
We are gearing up to ensure smooth transition into GST, as we are getting ready for the roll out. Though, we do foresee some disruption in the interim period during transition, but overall, we view GST as a transformational tax reform that will go a long way in simplifying the tax administration and help improve the GDP.
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