Seminar on Model GST Law Organized By Bombay Chartered Accountant’s Society
Date : 9th September 2016
Venue : Navinbhai Thakkar Auditorium, Vile Parle (East)
GST – Transitory Issues And Way Forward
By S. S. GUPTA Chartered Accountant
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Information Technology Network
The cumulative effect of various provisions of Model GST Law
read with the format of returns required to be filed would
indicate that the accounting software of every company needs to
be revised. For example under Section 25 of the GST model law
every taxable persons is required to declare details of outward
supplies. The business process note on return provides format of
return. Table 5 of GSTR -1 gives the format of returns for
declaring outward supplies.
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It will be observed from there that the HSN code, place of supply,details of reverse charge are required to be declared in the return.Unless this information are captured in the sales invoice preparedat the time of making supply, it will be practically impossiblemake a declaration of outward supply. Therefore it is essential tomodify the software.
Similarly accounting software is required to be modified forcapturing the details about inward supplies and compare the samewith the details of inward supply auto populated in GSTR -2.
The Government information technology network will alsoundertake matching of credit before permitting the credit.
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Client Education The various department namely, purchase, sales, finance etc. are
required to be informed about the revised provision. The factorswhich may to be relevant for the purpose are mentioned below:
A. Purchase:
(i) Inform all the supplier about provisional registration
(ii) Inform correct registration number (GSTIN) to suppliers,coordinate with planning so that goods or services are received atproper location
(iii) ISD number shall be informed to supplier where services are meantfor entire company
(iv) On receiving information from compliance team, to stop furtherdeliveries from black listed Dealer
(v) All disputes are settled before September following the end offinancial year
(vi) Centralized contract for obtaining service to be reviewed5
B. Marketing / Sales:
(i) All disputes regarding bills of supplier shall be cleared bySeptember
(ii) Determine place of supply for each customer/contract – i.e.location of immovable property
(iii) Change format of invoice to incorporate information for filingreturn
(iv) Discounts – Invoice based/condition of compliance
(v) Classify the customer B2B or B2C and obtain registrationnumber of B2B customers
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C. Compliance Team:
i. Verification of credit – reduce the ineligible credit and includecredit not reflected in credit ledger
ii. Computation of tax liability – verification
iii. Blacklisting of dealer – inform purchase, finance departments
iv. Verify credit reduced in electronic ledger
v. Filing of return
vi. Inform all the department like Sales, Purchase, HR etc. aboutlikely changes
vii. In case any taxable person has not uploaded the invoice, informpurchase/finance for action
viii. Obtain documents for conversion of provisional registration tofinal
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ix. Identify the principal place of business & additional place ofbusiness in each State where the assesse proposes to registerin the State.
x. Take steps to ensure that all the accounting records areavailable in the principal place of business so that theserecords can be produced at the time of audit.
xi. In case the assesse intends to take separate registration forseparate business verticals they should identify such businessverticals and compile the above required data accordingly
xii. Changes in software
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Business Process Restructuring Strategic Procurement of Goods & Services
In the current tax structure Central Sales Tax (CST) is payablewhen goods are moved from one State to another. Thus the creditof CST paid is not available to the recipient. Therefore manycompanies have opened branches, appointed agents etc. to saveCST. The GST will be charged on all inter-state supplies. Therecipient will get the credit of the taxes paid. Accordingly, thebusiness organisation should relook at the location of depots asthere is no tax advantage.
They have many inputs on which credit was not available as mostof the statute make provision for payment of tax on compositionbasis. The tax will be payable now on total value of goods andservices. Thus the credit of tax paid on goods will also beavailable. Therefore the procurement strategy needs to bereviewed. 9
Issues related to Accounts & Audit
The procedure of accounting requires review as in many
cases the invoices will be prepared even for the transaction
which does not involve sales. Accordingly the procedure of
accounting also needs to the reviewed.
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THANK YOU
BALANCED VIEW
PRESENTED BY
S.S.GUPTAChartered Accountant
1009-1015, Topiwala Centre, Topiwala Theatre Compound,
Near Goregaon Railway Station,Goregaon (W), Mumbai 400 104
TEL: 28754127 /28760161 Fax – 28778458E-MAIL : [email protected]
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