GST Compliance

1. Understand your business process in GST scenario and classify which transactions are goods and services.

These transactions will be most affected by GST. Integrated Goods and Services Tax (IGST) model of taxation has been adopted for interstate transactions where Center would levy IGST which would be CGST plus SGST. Make sure that you thoroughly understand and bifurcate your transactions. This will help you in understanding the overall impact of GST on your business.

2. Classify your transactions under goods and services, and place of provisions

After classifying the goods and services related transactions, recognize which provisions will be applicable to them. GST is a just broad topic which comprise of many provisions for various goods and services. These provisions differ with location, industry and type of commodity. Thus, identifying what will be applicable to your business beforehand will take you a step further in GST compliance.

3. Define the change in business in stages of pre, during and post manufacturing

GST is surely going to change almost all your processes - be it manufacturing, trade or supply chain. Reorganized manufacturing plants and warehouses would reduce the primary freight charges. GST would eliminate the existing penalties on interstate sales transactions and facilitate the consolidation of vendors and suppliers. Before GST sets in, make a calculation of how your various functions are going to change and operate.

4. Understand your logistics model - depot and branches.

GST is a destination based tax. There will be a greater impact on logistics and the charges/taxes levied. After GST implementation, your warehousing and logistics decision will be based on economic efficiency such as costs and locational advantages vis-a-vis key customers. You may have to strategize your supply management strategies in a manner that minimizes cash flow impact.

5. Define your sales policies - schemes, discounts and returns

Should you charge GST to your customers on the items or services you provide? Would your pricing still be competitive? All such questions are going to affect the selling price of your goods and service, discounts and returns you provide to your customers and other such pricing policies. Defining your sales policies in compliance with GST will help you maintaining your profit levels and customers.

6. Review your contracts - Amendment to current POs

Make the required amendments in your current POs and contracts. It is advisable to define the terms and conditions to meet GST requirements. will make your work easier in the future.

7. Review your suppliers – nature of goods, place of supply, contractual terms

Contract terms, not only with your customers but also with your suppliers need to be revised. With GST regime, the supply chain network design would be more flexible. GST would lead to club many small warehouses and have bigger, fewer, and highly efficient warehouses. Thus, changes have to be made in contracts with your current suppliers at various places. Make sure that you review your suppliers, what and where they supply and the mutual contracts.

Our EXPERT team is here to help you navigate this change.

GST COMPLIANCE CHECKLIST

  1. Detailed working of closing stock as on xx-xx-xxxx – make sure to file the return for the tax period ending on xx-xx, by the appointed time
  2. Apportion your closing stock into quantity and item rate per quantity
  3. Classify stock according to rate, purchase type (interstate or intrastate), duty paid or exempted
  4. Compare your books with values shown by your debtors/ creditors as on xx-xx-xxxx
  5. File the form TRAN-1 by xx-xx-xxxx, and TRAN-2 on a monthly basis until xx. This is an important process for claiming ITC on old stock
  6. Collect Form-C, Form-H, and Form-I for the stocks on which ITC is to be claimed
  7. Finalize your Books of Accounts along with stock details provided to banks/ financial Institutions
  8. Provide your GSTIN to all your suppliers and collect GSTIN from all customers
  9. If registered as centralized service provider, apply for migration for such states where your business may be operable
  10. Make a list of rates under GST for all goods that you deal with
  11. Make a list of all such on which reverse charge will be applicable
  12. Ensure that all debit/ credit notes are serially numbered
  13. Check that your existing accounting software is integrated with your GST return filing software
  14. Make sure that your invoicing solution is in line with the formats and rules for invoicing under GST. Also, be sure to check the invoicing series applicable to your product
  15. Ensure that you are sending out a tax invoice for supplying taxable goods and services, and a bill of supply for exempted, nil-rated, and non-GST goods and services
  16. Decide and prepare a list of Place of Supply for all your business activity

With the completion of more than one year since the introduction of GST, it's critical to start focusing on various compliances such as input and output reconciliations, preparation and filing of annual return and GST audit certification. All of these compliances will form an important basis for the first audit/scrutiny/assessment under the GST law. The law prescribes multiple audits conducted by the authorities, an external auditor appointed by the authorities or audit certification by a person appointed by the company.

The following are the audits which companies should be prepared for:

1. Audit by commissioner under section 65 of the CGST Act, 2017
2. Special audit in terms of section 66 of the CGST Act, 2017
3. Audit as part of the annual return process by an external Chartered Accountant (in Form 9C and 9D - draft submitted by the ICAI)

It's important that companies start preparing for these audits in order to avoid any loss of credits, applicability of interest/penalties, etc. Some of the key aspects to be considered by companies are as follows:

  • Reconciliations: Ensure reconciliations of output tax/input tax between the books of accounts, returns and e-waybills issued (output side)/tax discharged by the vendors (input side).
  • Tax positions: Review the tax positions adopted by the company and also whether these are correctly reflected in documentation.
  • Credits: Review if any ineligible credits have been availed (including review of credits availed) and in the process also ensure completeness of credits.
  • Applicability of other provisions like free of cost services/goods, valuation, and cross-charges between related persons/distinct persons.

Now is the perfect time for companies to ensure that they are well prepared for all the audits to be conducted by the authorities.

What are the benefits of RSNA's GST Compliance Solution?

The solution is aimed at automation of month-end tax compliances and reporting and provides options for interfacing with multiple ERP environments:

  • Comprehensive compliance coverage
  • Seamless interface with GSTN for information upload/download
  • 100+ data validation checks to ensure factual as well as legal precision
  • Extensive reporting/business intelligence modules to provide relevant insights to concerned stakeholders
  • Intuitive dashboards for different user profiles
  • Continuous monitoring of compliances to ensure timely completion of underlying activities
  • Secured infrastructure
  • Access control mechanism to ensure users get to see only what they are supposed to see
  • Audit trail for both internal as well as external stakeholders

All this and more backed by a strong team of RSNA's indirect tax and technology professionals to provide implementation and ongoing support for the compliance solution.

CONCLUSION

There are so many complicated provisions of the law that if an enterprise tries to handle everything on their own, then they are more likely to make mistakes. RSNA will help the businesses understand GST in a better manner so that they will be able to focus on their business rather than tackling GST issues. To prevent any business disruptions in the beginning and ensuring that no business is lost and fool-proof GST compliance is achieved, businesses should definitely choose RSNA. Now is not the time to be passive and adopt a proactive approach.

 
     
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