Goods & Services Tax (GST)
After many delays and missed deadlines, India is finally set to embrace Goods and Services Tax (‘GST’) from 1 July, 2017. GST is perhaps the most significant and complex tax reform ever undertaken in the history of independent India.
GST being a transaction tax which subsumes most of the existing Indirect taxes levied by the Centre and States, may require significant realignment of operations including supply chain and logistics, pricing, procurements, accounting and Information Technology (‘IT’) Systems.
Further, a reform of this magnitude may take time to settle and the legislative process would entail frequent amendment in the law, procedures and tax rates. This would require businesses to continuously adjust to the additional requirements thrown up by such amendments.
Our advisory services on GST include;
- Assessing the fiscal impact of GST on business and product pricing, through evaluation of key parameters including:
- Change in tax rates;
- Change in Time and Place of supply rules for goods or services or both;
- Evaluating impact on outward supplies including goods and services;
- Analyzing impact on procurement of inputs / input services;
- Valuation mechanism under GST, including incidence on free of costs supplies, stock transfers, discounts, incidental supplies and supplies to related parties;
- Analyzing position on availability of input tax credits – credit restrictions or additional tax credits on procurements of goods and services; and,
- Basis the above parameters, assessing the Impact of GST on Company’s operations, select products and working capital.
- Advise on realigning the operations to ensure tax efficiency:
- Identifying alternate business models to ensure tax efficiencies and credit-optimization;
- Evaluation of the alternate business models identified basis the tax costs involved;
- Identify potential risks and suggest suitable mitigating strategies, associated with the identified models; and,
- Define the business model / contractual scenarios after discussions with the Management that could be taken up for implementation.
- Advise on implications under the anti-profiteering provisions under the GST laws:
- Ascertaining the impact of GST on the prices of products and services in view of additional tax costs / credits;
- Advising on the appropriate pricing mechanism to be adopted considering the additional savings / burden and the legal provisions;
- Advising the appropriate safeguards to be adopted; and,
- Representing before the Regulatory authorities constituted for Anti-profiteering.
- Ensuring steps for smooth GST Transition:
- Implementation of changes in business processes such as establishing processes for billings, devising a system for receiving advances / payments;
- Guidance on eligibility of specific credits that could be available under GST regime;
- Evaluating and updating the eligibility and transferability of existing Input tax credits;
- Assistance in preparation and uploading of statutory Forms for Transition of credits;
- Guidance in relation to the manner of recovering tax from customers;
- Highlighting key areas for negotiation, with vendors / customers, pertaining to the contractual arrangements;
- Assistance in obtaining GST registrations or migrating existing registrations; and,
- Preparation and updation of compliance Manuals / SOPs.
- IT Functional Advisory
- Studying the existing IT System, basis blueprints and flowcharts shared with us, to provide the tax triggers and mapping for each of the business transactions;
- Evolve logics basis the changes introduced in law including those for transition of credits;
- Configuring tax rates and updating master file basis the scheduled rates;
- Advise on the reports to be generated from the system for GST purposes;
- Advise on the structuring of invoices, credit notes, debit notes and other related documents;
- Conducting UAT Testing of the GST version of the IT systems and Reporting the observations; and,
- Final testing of the IT systems and provide a compliance report.
- Customized GST Trainings;
- Customized internal trainings for organisational requirements for Finance, Taxation, Legal, Commercial, Sales and Marketing departments; and,
- Trainings for vendors, suppliers and customers.
- Preparation / Review of GST Returns;
- Conducting Annual Audits;
- Assistance in assessments and Representation before the authorities.