NEW DELHI: Fintech firm Clear, formerly Cleartax, has invested $15 million to make software that helps businesses maximise their savings related to input tax credits, the company said on Thursday.
Citing results from a survey, conducted across 200 companies, Clear said businesses are paying an extra Rs8,000 crore in Goods and Services Tax (GST) payment every month due to vendor non-compliance.
Delay in filing GST by vendors is the biggest reason for this tax inefficiency, the company said.
With the government restricting tax credits to businesses in cases where vendors have not complied with the tax obligations, companies are under pressure to ensure compliance of vendors. Denial of credits for taxes paid on raw materials for the fault of vendors is a major headache businesses face. The authorities expect companies to deal with law abiding material suppliers.
Clear said 83% of organisations surveyed have been trying to block vendor payments manually to save on taxes but that is far from efficient. The company said it has launched an automated solution to manage input tax credit claims efficiently which uses artificial intelligence.
“A lot of companies do not know how they are losing out money due to vendor payments,” said Archit Gupta, founder and chief executive officer of Clear, adding that profitability is impacted due to vendors non-compliance.
