GST-IMPLEMENTATION-ROLE
OF CMA
SURAT CHAPTER OF WIRC OF THE INSTITUTE OF COST
ACCOUNTANTS OF INDIA
Dated 27/05/2017
A Presentation by
CMA. (Dr.)
Shailendra Saxena
B.COM,SAP(FICO),ACS,FCMA,FCA,DISA(ICAI).Ph.D.
1
GST
Comparison :
Present Taxation Vs. GST
[email protected]
CMA Role in IT
Functional requirement for IT
System
• Advice for preparing GST Compliant IT
systems.
• Identifying
all
possible
business
requirements to be captured in the IT
System.
• Segregating the identified requirements
into two parts (a) Mandatory and (b)
Recommendatory
• Validating the GST compliant IT System
Understan
ding Client
current
System
Understa
nding
Governme
nt System
Identifying
requiremen
ts
Coordinati
ng with
System
Team
Validating
client IT
System
When is IT System GST Compliant?
Business Processes mapped to GST
Local and Inter
State
Procurement
(goods and
services)
Job work
transaction
under Section
43A
Sales return /
sale on approval
Bill to ship to
procurement/su
pplies
Taxes Export
with payment of
taxes and without
payment of
Input service
distribution
/Reverse Charge
Mechanism
Imports
(Separate Value
for BCD and
IGST)
Sale / Services /
Stock transfer /
Transfer to own
unit
(Local +
Interstate)
Inter unit
taxability
/captive
consumption
Consignment
agent / mixed
supply / Free
Supplies
Supplies without
considerations
OTHERS
When is IT System GST Compliant?
Data fields identified and captured
• Master data
• Tax codes
• Pricing Procedure and Conditions
• Purchase order / Sales order etc.
• Invoices/debit or credit note etc.
• Input tax credit claims
• Preparation records/registers/other documentations etc. for all
business processes.
• Computation of liability,
• Return preparation
• Others
When is IT System GST Compliant?
GST Returns / GST Ledgers / GST Records &
Registers
• All GST returns getting automatic generated from software with
minimal human intervention. Line Item wise data required in
return.
• Cash Ledger / ITC Ledgers / Tax Ledgers / ISD Ledger auto
generated by Client System (GSTIN and PAN wise)
• Mapping of ledgers generated by Client System with ledgers
maintained by GSTN system.
GST LEDGERS

Three Electronic ledgers to be maintained:
1. Electronic tax liability register:
2. Electronic credit ledger:
3. Electronic cash ledger:
GST REFUNDS:
•Common refund application to be filed through GSTN.
•No Unjust enrichment: Refund application to be accompanied by
prescribed documents along with CMA Certificate- GST RFD- 01
•The acknowledgment for filing refund application will be
available in GSTN after verification of information and documents
filed. Immediate acknowledgment for cash ledgers- GST RFD-02
•Provisional Refund of 80% subject to GST Compliance RatingGST RFD-04
•Refunds, provisional refunds and interest on delayed refunds to
be directly credited to the bank accounts- GST RFD- 08/09
GST RETURNS:

Different forms prescribed for outward supplies, inward supplies,
communication of the input tax mismatches, final acceptance, mismatches
adding to the output liability, etc.

Finalization of GSTR-1 (sales register) and GSTR-2 (purchase register) at GSTN.

GSTR-3 auto populated data: cash details as per Electronic cash ledger/ carried
forward from previous tax period, ITC carried forward from previous tax period,
ITC reversal and associated Interest/Penalty, taxes paid during the current tax
period etc.

To pay such amount as shown in the draft GSTR-3 return generated
automatically.

To debit the electronic cash ledger/ credit ledger and mention the debit entry
No. in the GSTR-3 return.
WHEN IS IT SYSTEM GST COMPLIANT?
Reconciliation
• Effective mechanism of reconciliation of purchase details
uploaded by Clients with details uploaded by vendor and
customers in GSTN system on daily basis.
• Proper integration of details provided by GSTN system with
details available in Clients system.
• Concept of acceptance/rejection to be captured in Clients
System.
WHEN IS IT SYSTEM GST COMPLIANT?
Transitional Situations mapped
• Purchase / sales order prior to GST regime but invoice
post GST Regime
• Issuance of debit / credit note issued post GST regime
in respect of invoice issue pre GST Regime
• Receipt of goods from Job worker post GST regime but
inputs issued pre GST regime
• Others
CMA ROLE - FINACIAL IMPACT
GST IMPACT ANALYSIS
• Capturing the present business in “as
is” condition and to identify the impact
of Model GST legislation
• Mapping the current taxes paid on
procurement of goods and services
• Mapping of GST to be paid on
procurement of goods and services.
• Analyzing increase in credit blockage
and working capital outflow on inward
side.
• Taxes paid on output – Analyzing any
change in quantum of taxes to be paid
under GST regime.
• Analysis of net GST impact on the
current model including cash flow
• Recommendations and suggestions for
tax optimization;
CHANGE
IN CREDIT
IMPACT ON
WORKING
CAPITAL
OUTFLOW
IMPACT ON
COST
IMPACT ON
PRICES
IMPACT ON
COMPANY
CMA Role in Transitional Advisory
ISSUE : Pending Litigations
• Section 156 of Model GST Law {Transitional Provision}
• As per Section 156 of Model GST Law, upon finalization
of proceedings regarding output tax liability, credit of
amount paid not admissible.
Strategy
• If matter decided against clients, whether credit of duty
paid will be available to the customer?
• Should Clients pay tax under protest and raise
supplementary invoice
CMA Role in Transitional Advisory
ISSUE : Transitional Stock
• No transitional provision of excise duty benefit
Strategy
•GST leviable on transitional stock but no excise
duty benefit
•Stock optimization?
CMA ROLE IN TRANSITIONAL ADVISORY:
Credit on inputs and inputs in semi-finished goods or finished goods
held in stock:
Presently transitional provision not including provisions for credit to be taken by traders (who
have paid excise duty for goods), though representation have been made for same.
Likely results to be incorporated in the amended provisions for same to avoid litigation.
Credit of inputs, and inputs in semi-finished goods or finished goods held in stock on the
appointed day permissible, if following conditions fulfilled:
 Such inputs/goods are used/intended to be used for making taxable supply
 Eligible for credit under the earlier law but for his not being liable for registration or the goods
remaining exempt under earlier law
 Eligible for input tax credit in the GST law
 In possession of the invoices or other prescribed documents not older than 12 months
preceding the appointed day
CMA ROLE – TRANSACTION ADVISORY
GST efficient restructuring of
transaction
• Job work model vs P2P Model
• Re-examination of procurement policy ( Say FOR or Ex
factory purchase, inter state or local etc.)
• Mechanism of giving post sale discounts
• Purchase of motor vehicle vs renting of motor vehicle vs
transportation services.
• Avoiding blockage of seamless flow of Credit (Rule 5 of
POPS Rules)
CMA: REPRESENTATION TO POLICY MAKERS
Representation related to amendment in GST Act/Rules
• Stock Transfer – Valuation Provision / Transitional Provision for
excise duty benefit on transitional stock etc.
Representation related to issuance of Circular for
clarifications
• ITC on construction related activities / Taxability of inter unit
adjustment etc.
Representation related to issues in return
filing/procedure
• As and when required
CMA Role – Additional Role
Reviewing of Contracts
• Existing clauses / Transitional clauses / Benefit of extra ITC
available to vendors to be passed on to Clients
• GST applicability on contracts with vendors – Avail exemption /
lower rate benefit
• ITC available only if vendor deposit the GST – Safeguard in
contract
Training / workshop
•Central Information Cell : Common GST treatment for common
issues across plants
• Appropriate training at all level of clients, across all plant and
head office. Different departments to be trained.
• Vendors Training
CMA Role – Additional Role
GST implementation and compliances
• Guidance on the registration requirement, invoicing
requirement, computation, set-off, etc.;
• Providing detailed compliance calendar under the GST Regime
which needs to be followed by the company;
• Assistance for maintaining suitable records under the GST
Regime;
• Review of the sample documentation such as invoices, bill, etc.
and registration to ensure that these are compliant under the
GST regime;
• Review/ vetting of initial first returns to be filed with the
authorities under the GST
CMA Role – Additional Role
GST implementation and compliances
• Providing guidance as and when required on issues arising in
routine business operations from GST regulation perspective;
• Time to time advise on routine queries raised by the company
for initial months to ensure that appropriate compliances
under the GST regime; and
• Providing suitable guidance on the key amendment /
clarifications issued by authorities under the GST regime
which may impact the company.
THANKS!!
ANY QUESTIONS ?
CONTACT FOR POST SESSIONQUERY:
CMA. (Dr.) Shailendra Saxena |
E-mail: [email protected]

Cell: +91-93774-10260
21
[email protected]