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Taxing times · GST Roadmap Slide 3 Taxing times November 2016 January to March 2017 •...

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  • Taxing times

    Indirect Tax Forum


    1 November 2016

  • PwC

    Getting ready for Indian GST

    November 2016Taxing times

    Slide 2

  • PwC

    GST Roadmap

    Slide 3

    November 2016Taxing times

    January to March 2017

    • Notification of GST Rules

    • Testing of IT systems for all stakeholders

    • Outreach workshops for industry

    September 2016

    Constitution amended, President’s assent, formation of GST council

    Oct-Nov 2016

    • Finalisation of GST rates

    • Recommendation of Model laws by GST council

    • Backend IT systems to be ready

    • Change management and trainings

    December 2016

    • Passage of GST laws

    • Development of front end and backend IT processes

    • Trainings in IT systems

    August 2016 – CAB passed

    April 2017

  • PwC

    GST – Proposed regime

    Taxing times

    Simpler and rational tax structure

    Broader base, lower taxes

    • Less tax cascading

    • Increased investment

    • Improved competitive position of Indian producers

    Improved administration (simplicity and lower cost of administration)

    Improved cash flow position

    Slide 4

    November 2016

    1GST – To bring a fundamental shift in the way business transactions are taxed in India

    2Multiple State and Central indirect tax levies to be subsumed under GST

    3‘Dual GST model’ – likely to have multiple rates (6, 12, 18 and 26%):

    • CGST

    4Inter-state transactions proposed to be covered under IGST, to be levied by Central Government (likely tax rate for IGST to be sum of CGST and SGST)

    5Input credit mechanism to ensure no cascading effect and minimal blockage of funds

    • SGST

  • PwC

    What is changing?

    Slide 5

    November 2016Taxing times

    Destination based consumption tax as compared to current regime of origin based taxation

    GST to discourage parallel economy

    Business plans would be driven by commercial imperatives rather than by tax

    To remove state barriers and make India one common market

    Service sector – State


    Service sector to be subject to State level taxes for the first time

    Growth of organised


    Business plans

    One marketConsump-

    tion tax

  • PwC Slide 6

    November 2016Taxing times

    How will GST impact my bottom-line?

    How can I create more value?

    1 2

    How can I be compliant?

    Can I build competitive edge?

    3 4

  • PwC

    In our experience companies drive value with potential benefits worth 4-13% across value chain

    Slide 7

    November 2016Taxing times

    Opportunities of 2-4% in sourcing and 2-9% in network across the value chain

    Manufacturing PricingSales and distribution


    • Remodel cost of supplies

    • Fact-based negotiation with the suppliers

    • Evaluate Change in Manufacturing locations and strategy

    • Re-evaluate contract manufacturing and job work arrangements

    • Redesign distribution and sales network

    • Remodel warehouse footprint

    • Redesign pricing structure

    • Margins, discounts, incentives, promotions, return pricing

    Indirect/Capex vendors

    Plants Sales/Distribution team

    Market/Sales leadership

    Excisable depots

    Integrated Planning – Adapt to redesigned value chain, optimise inventories, working capital and service

  • PwC

    In our experience companies drive value with potential benefits worth 4-13% across value chain

    Slide 8

    November 2016Taxing times

    Pricing decision

    Change in tax rate

    Savings on procurement

    Increased credits

    Savings by network restructuring

    Transition impact

    Impact of area based exemptions

    Absorb benefit?

    Competitive pricing

    Pass through the supply chain?

  • PwC

    Managing compliances under GST – Need for a robust process/technology framework…

    Slide 9

    November 2016Taxing times

    Separate registrations in each state (SGST/ CGST/ IGST)1

    Multiple state-level filings 2

    Multiple credit pools3

    Cumbersome reconciliation requirements4

    Need for technology intervention5

  • PwC

    IT readiness

    Slide 10

    November 2016Taxing times

    • Master data amendments

    Master data

    • Tax configuration and computation

    • Document numbering

    • Roles and Authorisation


    • Business process re-alignment

    • Reporting and printing requirements

    • Impact on interfaces

    Developments including reports

    • Tax credit migration

    • Closure or reversal of partially open transactions

    • Migration of Contracts

    Roles and authorisations

    GST Impact on ERP and associated applications can broadly be classified into the following heads

  • PwC

    IT readinessSome changes to be made to ERP and other transactional systems

    Slide 11

    November 2016Taxing times

    1Controls and compliance• Tracking of CGST, SGST and IGST

    • Utilisation of input tax credit

    • Statutory reporting


    • Procurement schemes

    • Tax compliant warehouses

    • Vendor master

    • Process – domestic and import procurement of goods and services, etc.

    • Print layouts and reports

    Finance and control

    • Tax procedures

    • P&L

    • Chart of accounts

    • Tax codes

    • Registration numbers

    • Reports

    • Pricing procedures

    • Customer master

    • Pricing master

    • Process – domestic and export sale of services, debit and credit notes, etc.

    • Print layouts and reports

    Procurement 4Sales and distribution3

  • PwC

    GST – Impacting whole business

    Slide 12

    November 2016Taxing times










    Contract arrangements

    Tax impact



    IT system


    GST is a multi-function transformation program, impacting the whole organisation – It needs to be managed and reported rigorously to be compliant and capture value

  • PwC

    Preparing for GST requires a ‘whole of business’ approach

    Slide 13

    November 2016Taxing times

    Design ImplementConstructAssessOperate and



    Transition plan

    Supply chain management

    Representation with Government

    GST impact analysis

    Evaluation of IT systems and processes

    Deliver change

    Pricing Supply chain

    implementationProcess re-engineering

    IT re-configuration

    Review of SoPCompliance monitoring

    Vendor management

    Communication and training modules

    Compliance review


    Pre GST Post GST

  • Thank you

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    information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the

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