A Step plan for GST implementation
Government is introducing Goods and Services Tax (GST), with effect from 01stJuly 2017. GST is a comprehensive, multi-stage, destination-based tax that will be levied on every value addition throughout India to replace taxes levied by the central and state governments.
Please ensure that the changes in new tax regime are properly understood and appropriate measures are taken for hassle free transition. Please determine the taxability of various transactions undertaken by you including purchases, sales, supply, credit notes, returns etc. to ensure correct payment of taxes and compliance under GST regime.
Pre – Implementation action points for smooth GST transition
- If you are an existing tax payer, get your GST enrolment in time by making use of the provisional ID & Password that you have obtained from your concerned indirect tax authority.
- Apply for migration in all states if you have centralised registration under Service Tax.
- Complete the closing stock working as on 31.03.2017/30.06.2017 on or before the GST implementation date. Please make sure that no old stock ageing more than one year lies in the stock on GST implementation date.
- A dealer or manufacturer who has input tax credit under State Vat or Entry Tax in his return on 30-6-2017 can carry forward his input tax credit as SGST Credit. A manufacturer who is having a cenvat credit balance in his return on 30-6-2017 can carry forward his cenvat credit as CGST credit. Classify stock tax rate wise, purchased locally to get ITC (Input Tax Credit) into SGST. Also, classify stock purchased on invoices bearing duty payment & nonduty payments to get ITC transferred to CGST.
- Make a separate file of those items which are shown in your unsold stock as on 30.6.2017 e.g. Purchase Bills/ Bill of Entry/ Excise Paying Documents etc.
Dealing with vendors/customers
- Get the accounts statement from your suppliers/creditors for the year ended 31/3/2017 & reconcile with your books of accounts
- Rectify mismatch reports of purchases, if persists; and revise your indirect tax Returns accordingly
- If goods were supplied under the CST Act, details of claims and CST forms (C, F, H, I, E-I/E-II) shall be submitted within 60 days)
- ·Inform your GSTIN / ARN to all suppliers of Goods & Services and obtain GSTIN of all Suppliers & Buyers.
- ·Make Chart of HSN CODES & GST Rates on your goods & services to be purchased &sold.
Books of Accounts & ERP
- Get your Books of accounts finalised for FY 2016-17.
- Updating your ERP or accounting systems
- Keeping note of GST compliance requirements and effectively training your accountants for GST accounting and returns formats.
- Update the invoice formats in ERP with GST requirements.
- Take help of appropriate Tax engines/ Decision tables if found necessary.
- Assess the requirements for transactional restructuring if any needed to be in compliance with GST. Also, analyze the requirements for re-modeling business structures if any
- As GST is a destination based tax, strategize your supply management strategies in a manner that minimizes cash flow impact.
- Define your sales policies – schemes, discounts and returns and effectively redraft the pricing mechanism
- Review and if necessary renew your contracts appropriately.
- Impact of abolished and new levies on the recurring finance decisions needs to be analyzed and planned.
- Special consideration to quantifying the penal provisions for non-compliance
Please contact us if you require any further clarification regarding the above step plan.
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