GST in India 2017

August 21, 2017 | Author: gulatiankur2010 | Category: Value Added Tax, Taxes, Payments, Government Finances, Economies
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GST in India 2017...


GST IN INDIA Dawn of a New Indirect Tax Era

WHY GOODS & SERVICES TAX (GST) The India business landscape faces a host of challenges in the indirect tax structure emanating from:  Multiplicity of taxes at the Centre & State levels  Cascading of taxes  Fixation of situs of sale-Local sale vs Central Sale  Issues regarding double taxation viz. works contract, software, etc.  Lack of uniform structure and processes  Cumbersome compliance mechanism With the proposed shift to the GST regime, we see a drastic improvement in the business landscape.

WHAT IS GST One Indirect Tax for the entire nation making India one unified common market

Integration of prevailing indirect taxes to ensure uniformity. However, Basic Customs duty to continue

Standardized classification of goods/services should result in reducing litigation

Levied at ‘each stage’ in the economic chain of supply

GST leviable on transaction value; MRP based assessment done away with

WHEN WILL GST BE LEVIED  GST is driven by the ‘supply’ concept. Transactions involving supply of goods and services to be taxed under GST  Central GST (CGST) and State GST (SGST) will be simultaneously levied on every intra-state transaction of supply of goods or services except on exempted goods and services i.e., goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits  The Centre shall levy and collect Integrated GST on all inter-state supplies of goods and services. IGST would be equal to a combination of CGST and SGST

ON WHAT IS GST LEVIED  GST is to be levied on transaction value of goods and services  Such transaction value to undergo scrutiny incase the value is influenced by related parties  GST shall also be levied on prescribed goods and services supplied without consideration

Credit available across goods & services; including for inter-state procurements leading to higher credits

Harmonization of Centre and State taxes to achieve common market


Incase of Imports

Incase of stock transfers

Importer of Services

Incase of Interstate/intrastate supplies

Supplier of Goods

Incase of certain notified supplies

Supplier of Services

Supplier of Goods Supplier of Services Recipient of goods Recipient of services


Procurement of Goods and Services

Supply of Goods and Services

Basic Customs Duty + IGST

Integrated GST (IGST)

State GST (SGST) + Central GST (CGST)


Inter-state supply

Intra-state supply


At Central Level

At State Level

Taxes to be Subsumed ▪ Additional customs duties (CVD and SAD) ▪ Central Excise Duty ▪ Service Tax ▪ Special Excise duty (on medical and toiletries preparation) ▪ Various auxiliary cess & levies

▪ ▪ ▪ ▪ ▪ ▪

State-VAT Central Sales Tax Entry Tax Luxury Tax Entertainment Tax Purchase Tax

Zerorated Export

Sectors outside proposed GST

▪ Petroleum, to be covered from future date ▪ Alcohol fit for human consumption ▪ Real Estate, leviable to state stamp duty ▪ Electricity, leviable to Electricity duty by States

Integrated GST (IGST)

State GST (SGST) + Central GST (CGST)

Inter-state supply

Intra-state supply


▪ ▪ ▪

Financial/Working Capital impact of GST on Business Tax Planning and Structuring for the future Transition of Systems and Processes

▪ ▪ ▪

Chief Financial Officer

Chief Marketing Officer

Chief Technology Officer

Procurement & Logistics Head

Transition of Information Technology (IT) Systems to the New Tax Framework Greater focus on Flow of Electronic Information under GST Robust IT Systems a pre-requisite

Impact of GST on End Product Pricing Impact on Supply Chain Efficiencies on Product SKUs Competitive Dynamics: Retain the efficiencies or pass on to customers

Potential Savings in Warehousing, Logistics, Procurement and Distribution Costs Re-alignment of Supply Chain as per Business Dynamics

Let’s take a closer look to prioritize…before we take a leap! ASSESSING THE REAL IMPACT ON BUSINESS OPERATIONS

Impact on cashflow

Prioritize business needs

Impact on pricing

Impact on Working capital

Supply and procurement analysis

Making team GST ready

Legal & Contract Transition

Assess industry issues

Achieve business continuity

Analyze gaps and risks



Pricing & Working Capital



▪ ▪ ▪

Existing Registrations Changes in ERP, Internal controls Internal team readiness

▪ ▪ ▪

Impact on cash flow of the business Impact on working capital/cash flow Pricing of goods/services

▪ ▪

GST compliant invoices Ensuring GST returns are filed on time

▪ ▪ ▪

Eligibility and transferability of credits On-going contracts Changes in documentation, processes and policies to meet GST requirements


Centralisation of process, policies & systems

Business reengineering, supply chains etc.

Industry/sector impacts

Policy advocacy

The Final Lap has begun HOW WE CAN HELP GST Policy Advocacy  Identify shortcomings in the GST Act that can have a negative impact on the Company  Assist in making representations to the GST Council for overcoming them Impact Analysis Study  Perform simulated calculations of potential GST impact on business and highlight changes in tax costs  Identify areas of opportunity and threats and determine impact on business operations Review of Impact Analysis Study  Review the impact assessment study undertaken by the company/consultants on business operations  Suggest changes for improved management of processes, positions and compliances Transition & Implementation Assistance  Preparation of change management plan  Custom-design changes that need to occur in ERP, Internal Controls, Accounting  Evaluating readiness of the company’s internal team to handle GST compliances and formulation of risk/responsibility matrix Assistance in Compliance and support services    

Migration to GST registrations Assistance in GST compliances (filing returns, monthly GST payments etc.) Review of sample GST compliant invoices and other documents as per the prescribed formats Resolve routine on call queries on a need basis



 Identify impact of GST on various business supplies  Analyse transaction rules on credits, taxability of transactions, migration into GST, etc  Identify possible areas where GST could be accumulated  Impact of rate change on margins, cash flows, etc  Unbundling “mixed” supplies of goods and services

 Need for re-negotiations with certain vendors/ clients based on GST impact study  Invoicing norms likely to change under GST  Manner of claiming and utilizing VAT and CENVAT credits may be an amalgam  Valuation norms to identify taxable value likely to change  Mapping multi-locational services



 Registrations, online payments & returns of CGST, IGST and respective State-SGST  Gearing up for periodic Audits, reviews and other assessment procedures at Central and State level  Dual-reporting likely for certain transactions  Transition compliances

 Map transaction lines into dual-GST charges  Data fields to be identified and captured for return preparation, credit claims, liability computations, etc  Reconciliation of GST credits & liabilities with Statutory books  Auto-matching of SGST/ CGST credits and IGST credits to perform real-time calculations of GST liabilities


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