Value Addition to
Clients - GST
-
CA Madhukar N Hiregange
1
Todays Coverage- Value Addition Available – Stage wise
1.
Pre- GST – Best Practices?
2.
Last Returns- ( Missed Credits Exercise)
3.
Impact Study
a.
Whether to register? All locations- some locations?
b.
Planning for ensuring continuation
c.
Planning for margin safeguarding – advance ruling; optimum credit in time…?
d.
Proper Classification – Mixed Vs Composite supply
e.
Readiness for investigation, dept audit in 2020!!
f.
Transitional Advantages/ Compliances
g.
Job work options
h.
ISD Vs Supply choices
2
Todays Coverage- Value Addition Available – Stage wise
4. Regular Health Check of GST or Scope in Internal Audit
5. Ensure 2016/17 Statutory Audit/ Tax Audit – GST – Impact ( Forms, Books Vs Returns..)
6. Hand Holding for compliance in period 1st July ( or 1st Sep ) for 2 months.
7. Retainer for initial year & smaller for subsequent years
8. Outsource responsibility including/ excluding litigation
9. Refund Management
10. Many many more….
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Pre GST
Value Proposition
Pre-GST Period
Post-GST Period
Value
Proposition
Post GST
4
Available in GST Act,
& Rules 2017
Key Areas
Operational
Consultancy
Network support &
Infra.
Accounting &
Taxation
Compliance
requirement
Transitional Support
Sr.
Centre/State
Support Sr.
Audit & Assurance
Pre-GST Period
1. Statutory Role in GST
2. Key Araes
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
5
Pre-GST Period
1. Role - pre -GST Act
2. Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
• Accounts
and other
records
• Audit –
• Rs.1 Cr.
• Dept./
Special
Audit
•Appearance by
Authorised
Representative
Section
35
35(5)
Section
65/ 66
OtherProfBetter
Fees
Section
67
• Inspection/
Access to
Business
Premises
Section 152 – Disclosure of Information by Public Servant
6
Being in a position to analyse the industry impact considering the
global and Indian situation of the product / service;
Pre-GST Period
1. Role as pre M-GST Act
2. Overview – Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
In case of unintended hardship to some sectors- representation to
the drafter would be in order as the level of listening presently is high;
Akin to Companies Act
The clarity on the major impact on the client under GST due to
in-depth understanding of the business; This presently service offering
would provide the client with important information to plan the way
forward under GST. This could be done as GST law is in place;
Being part of the core team of client for analysing, transiting into
GST smoothly without business disruption & safeguarding of margins or
as a knowledge advisor for s/w developers;
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Pre-GST Period
1. Role as pre M-GST Act
2. Overview – Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
Understanding
legacy tax
• Systems at client workplaces so
as to provide appropriate advise
on migrating to better systems/
ERP or suggest modification to
make the existing systems GST
compliant;
Assisting in
preparation of a
strategic plan for
procurement and
marketing systems
of clients needed
under GST.
• For example supporting in decisions on:
Closure/ reduction in godowns and branches;
direct sale through e- commerce; evaluation
of the working with C&F agents; in house/
outsourcing the distribution function to
logistic companies; sourcing inputs at lowest
cost within shorter time; linking to the ERP of
the customer etc.;
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Changes in accounting software and internal
control systems to suit GST. Test and guide &
confirm the robustness;
Pre-GST Period
1. Role as pre M-GST Act
2. Overview – Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
GST awareness at initial stages and training
for management, staff, vendors of clients.
Vetting and suggestion to modify agreements/
contracts/ major purchase orders overlapping or
supplies to be made in GST regime;
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Ensuring that the claim of credit on stock in hand is maximized by ensuring
purchasing with excise duty paying documents as well as proper stock recording
especially with job workers and agents and ensuring well thought of stocking
policy;.
Pre-GST Period
1. Role as pre M-GST Act
2. Overview – Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
Reviewing the various business transactions to examine whether closing out the
transaction in the pre GST or post GST period is advantageous;
The students of CA- the future CAs would also require to be taught the new
law to enable them do the GST work today + contribute in future;
Many CAs have good HR skills and have been in accounts outsourcing- Maybe
time to ramp up substantially with increased continuous trainignin GST abnd
use of IT tools;
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Pricing
• Revisit the pricing strategies with the distributors
• Renegotiate (if any) the pricing with suppliers
Pre-GST Period
1. Role as pre M-GST Act
2. Overview – Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
Review of contracts
• Alignment of all major contract terms and tax clauses with GST
• Discounts terms to be specifically brought out in the contracts
executed with distributors
Representations
• Making representation for lower rate of GST, taxability of
promo products issued free
Compliance and documentation
• Maintaining detailed registers of supply and procurements, input
credits
• Timely filing of monthly and annual returns
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GST developments – Sharing
• Tracking GST developments and creating awareness on GST
Impact on supply chain – Function wise
Pre-GST Period
1. Role as pre M-GST Act
2. Overview – Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
• Mapping impact of GST on current supply chain and suggesting
modifications from GST perspective
Imp.on bus./finance – Focus on SOP + controls
• Identifying impact on financials, working capital, credit chain,
concessions, and suggesting controls/ Short proc + planning
options
Post implementation compliances
• GST awareness trainings, review of compliances, creation of
manuals and access to GST updates/resolution to queries
ERP Updation - Validation
• Changes to ERP modules, MIS reports, statutory compliance
support, and ongoing trouble shooting support
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Synchronising IT
Systems & Old
data
Pre-GST Period
1. Role as pre M-GST Act
2. Overview – Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
Data
management for
State Jurisdiction
Updating
Amendments in
IT Systems
Automation of
returns and other
utilities at Centre
as well as States
Strong
Management
Information
System
System
Reconciliations
Data Integration
between Centre
& States
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Treatment of Incentives /
Discount
Pre-GST Period
1. Role as pre M-GST Act
2. Overview – Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
Process Documentations
& Accounting Manuals
Branch Transfers
Budgetary Controls
Control & Dispute
Settlement
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Deregistration from Existing Laws
Pre-GST Period
1. Role as pre M-GST Act
2. Overview – Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
Managing Pending Litigations
Review & Certification of Stock on date of transition
Knowledge Sharing & Capacity Building
Credit Analysis and Utilization
Comparative Valuation Under GST
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Representation - unintended hardship to
sectors
Conscripting Legislation & Rules/ Procedures
Pre-GST Period
1. Role as pre M-GST Act
2. Overview – Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities
Monitoring Transactions & Revenues
Cross –verification with Other Acts
Training & Education
Fixing Rate Based on RNR and Review
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Tax Advisory
Services
International
Research Issues
Knowledge
Process
Outsourcing
Information &
Knowledge Sharing
Capacity Building
Services
Technology
Support Services
Pre-GST Period
1. Role as pre GST Act
2. Overview – Key Areas
3. Operational Consultancy
4. Network support & Infra.
5.Accounting & Taxation
6. Transitional Support Sr.
7. Centre/State Support Sr.
8. Global Opportunities*
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LAST OPPORTUNITY TO CLAIM MISSED OUT CREDITS
1.
Review of Credit ledger
2.
Review of all expenses to identify instances of missed out credits
3.
Disputed credits – latest decisions favouring assessee – attempt to avail under intimation –
not to utilise for certain time
4.
Credit reversed under department influence – reavailment
5.
Credit reversed under protest in past – availement and carry forward
6.
Credit reversed under Rule 6 – directly attributable service
7.
Provisional reversal of credit under Rule 6.. Final adjustment to be made in the last return
Hiregange
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LAST OPPORTUNITY TO CLAIM MISSED OUT CREDITS
9. Refund claim filed – possibility of rejection – withdraw claim and carry forward
credits
10. Review of liability under RCM – pay & take credits
11. Charging of tax and availment of credits by service receiver- supplementary
invoice
12. Reco of credits in return vs balance in books
13. Consideration not paid 3 months – pay all dues to avail credit… or issue
debit/credit note
14. Avoid revision of last return
Hiregange
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Impact Study – On site/ Off line
Trader
Collate:
Idtc.icai.org,
Gst sites,
Newspaper…
NGO/Govt.
Unlearn –
Relearn
Concepts
Service
Provider
Manufacturer
Re-engineering benefits
Pro-activeness =
Efficient business
Smooth functionality
between processes
Reduction in penalty
& litigation
Tax planning between
IGST/CGST/SGST
Cash flow surplus:
Credits claim
Issues are addressed
before hand
Vendor classification &
discussion
Impact areas- Levy
Non recoverable
1. Sales team
Total Tax Outgoing
TRAINING
Recoverable
(Input)
2. Depot incharge
3. Accounts
team
Impact areas - Procurements
Procurement
source- to be
realigned?
Procuring with
a type of GST to
avoid
accumulation of
credit
Change in EOQ
levels, lead
times, carrying
costs
Vendor rating
– important
criterion
Revision in
purchase
budgets
Alternative
source of
procurement
Revision in
product
costing
Impact areas – Credit c/f
Past credit
Only if eligible in GST
Transition –
litigation?
In GST
As per rules (yet
to be notified)
Claim of credit on
stocks
Claim of Credit
C/f
Impact areas – Exemption
Claim of
Exemption
Trader
Service
Provider
If trading in goods listed in the negative list, other than any taxable
ancillary services provided. SST or composition scheme– no Interstate
Might be similar to Mega exemption notification 25/2012-ST
Manufacturer
Supply to Job worker may be taxable under GST
Other exemptions may continue?
Works
Contractor
As WCT is considered a service – Composition Scheme not available.
Exemptions is any awaited.
Impact areas – Composition
1. Turnover to
be less than 50
lakhs – 1%?
4. Vendors opting
for composition
in GST – shall
reduce
No ISS
No Credit
to Dealer or
receiver
3. Works contract
-Service - No
composition
2. Composition
scheme for
traders only and
not for services
Impact areas- - Vendor Management
Review current vendors history to identify non-compliant vendors
GST Compliance rating to identify non-compliant vendors
Identify multiple new vendors, get revised quotes
Conducting vendor education programmes for unorganized vendors
Review price of all related party vendors to avoid disputes in transaction value
Suggest vendors to follow similar exercise - better vendor relationships
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Impact areas – Agreements
Spill over contracts
to be reviewed
Tax planning & legal
intricacies
New projects- regn
needed.
Ex: Construction
industry. Paying around
25% tax presently, in
GST 18%
Impact areas – Accounts
Records –
IGST/CGST/SGST
based; Regular recos
Entry Validation +
Periodic
verification –
reduction of errors
Returns – 37/ 49
for a single
registration
Inward/Outward
Supplies + ISD
uploaded
Impact areas – Audit
AUDIT
Continuous check – Easy
& accurate compliance
Review present compliance, book
keeping, procurement, contract,
etc.
Impact areas – SOP
SOP –
Indirect
taxes
Introduce
/update
SOP – Key
business
processes
Tax & cost
planning
Re-design at
all levels
SOP – Vendor
&
Procurement
Awareness/ Basic Understanding- How to?
 Start focused reading/practice in VAT, Central Excise or Service Tax
till 1 July or 1st September 2017 + Update on CGST / IGST/
UTGST + State Laws – Now
How to get
awareness in
GST?
 Use online resources – [email protected] , gstclub, caclubindia, linkedin
& others.
 Form a small group for GST updates in your office
 Attend GST Cert. Course + focused workshops.
 Read books/ write articles for internal use…
Hiregange
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Expertise in GST – How To?
 Write Articles – start with 1 small topic
 Do One Impact study for free or nominal fee
How to get
Expertise in
GST?
 Be part of future expert group – Mainly CA + 1/2 experienced
advocates- meet 2 days a week with a paper presenter.
 Attend the weekly study circle in local branch/ RC.
 Analyse all the suggestions made to Govt by various authorities (
ICAI)
 Write a topics GST book on a sector or areas of concern
 Answer online forums with care/ in depth reading
Hiregange
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Videos – GST Impact
Web cast- Real Estate +
Multilocational Units +
Review Program
idtc.icai.org
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Questions?
- [email protected]
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