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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The table 5 of GSTR -1 attached to business process note of returnis reproduce below:

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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 : ssg@ssgupta.in

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