Preliminary Steps

[Asked by Guest]

Can anyone say what are the preliminary steps and cautions to be taken to get ready for GST.

[KASTURI SETHI]

Update yourself with daily dose of GST on TMI and wait for enactment. Uncertainty is still there.Any change can take place before enactment of GST.

[YAGAY and SUN]

You may enlist all your transactions which are being conducted in current scenarios and simulate it in GST scenarios to know the effect and savings etc. Say on stock transfer, in GST you would have to pay the IGST. Further, if stock are lying in the Depot more than of one year then you cannot pass on the taxes. Start collecting all statutory forms. Submit timely proof of export. Make changes in Power of attornies to incorporate the phrase GST. Attend seminars, trainings etc. Check the feasibilities of the very existence of depot/warehouses/godown in GST Scenarios.

Most import Start Involving people in your Organization.

[Ganeshan Kalyani]

As of now GST law is in draft stage. So how can you study the impact. So as said by Sri Kasturi Sir, you can update yourself with the GST news/updates. Also update your team - purchase/ sales, operation team, information technology team and relevant seniors in your organisation.

Impact analysis as of now where the law is in the draft stage is not possible. Only guess work can be done which is not useful. Also the itemwise tax rate schedule is not made public. In such scenario you cannot instruct or take decision for the change required in line with upcoming GST. Thanks.

[YAGAY and SUN]

Dear Aitha RajyaLakshmi,

Just check with Big 5 and reputed Law Firms that whether they are conducting GST Impact Analysis for Large Scale Manufacturer and Organizations for GST preparedness or not? We have also got sub contract for the same. However final version of the GST Impact Analysis would be submitted when the final GST Law will come in force.

Regards,

YAGAY & SUN

[KASTURI SETHI]

Dear All Experts,. One nation, one tax does not mean 5 slabs. What ever may be reason or basis or background. Peak rate 20 % for IGST 20 % for CHEST. 40 %. When GST implemented, chaos is feared. So many registrations. How justified ? So many problems are in the offing.

[KASTURI SETHI]

Let us see which way the wind blows. Whether it proves 'ease of doing business' or disease of doing business ?

[KASTURI SETHI]

Rectification pl.

Pl. read SGST in place of CHEST.

[Ganeshan Kalyani]

I agree with Sri Kasturi Sir's view.

Further, the big corporates are getting tax impact study done from consultants who are charging good amount. The fun is they do the work in assumptions. Why are they assuming? Simple the law is on draft stage. Only when it get final they can give their final advise.

What you can do is prepare "As Is" i.e. whatever process is followed for purchase booking, sale booking, accounting entries, invoice structure can be listed down or collate it in one file. So that if final law comes then the changes can be easily located and can be understood where the changes need to be done either in invoice structure or accounting software or business process etc.

The same can be done internally. Why to spend money at this stage when law is in draft stage. But still if you wish you can do so. Thanks.

[YAGAY and SUN]

Not only the big Corporates but for small businesses also a website has been launched.

Web portal to guide traders on GST regime

http://gstimpact.com/

Large businesses can use advanced tools on the portal, gstimpact.com, for obtaining a detailed report on GST's impact (Basic features are free and for advance features fees will be charged as applicable).

A web portal to help traders and other stakeholders’ transition to the upcoming Goods and Services Tax (GST) regime has been launched. Through the portal, businesses can ascertain the impact of GST on their business, profits and revenues and also understand steps for smooth transitioning to the new indirect tax regime that is likely to be rolled out from July, Reina Consulting, which has launched the website, said in a release.

By using free basic tools, small traders, service providers and manufacturers can determine their financial gains under GST on a real-time basis by simply inserting their existing purchase and sale details, Ankur Jain, the Partner of the firm, said. Large businesses can use advanced tools on the portal, gstimpact.com, for obtaining a detailed report on GST's impact, the company said.

The report highlights various factors contributing to the gains apart from advisory on vendor negotiation, logistics management, and vendor re-negotiation under GST regime. Reina Consulting claims to have a team of indirect tax professionals with vast experience.

[KASTURI SETHI]

I am grateful to M/s.YAGAY AND SUN, experts for enrichment of my knowledge on the issue. Very useful website indeed for everyone.

AI Summary

Goods and Services Tax preparedness: map transactions, collect statutory documentation, and ready teams and systems for transition.
Preparation for the Goods and Services Tax requires enumerating and categorising existing transactions, simulating GST scenarios to identify changes in tax incidence (including inter state stock transfers and integrated tax implications), and collecting statutory forms and export proofs. Organisations should update powers of attorney, involve cross functional teams to review invoice formats, accounting entries and warehouse structures, and prioritise internal "as is" process documentation so that adjustments to software and business processes can be made once the final law and rates are published.