Pro Hats Consulting LLP

www.Prohatsconsulting.com

GST

GST Roadmap

Constitutional Amendment Bill (CAB) passed in on 3 Aug 2016

Lok Sabha has approved the amendments and cleared the CAB

Ratification of the CAB by > 50% State Assemblies

Formation of GST Council and Publication of GST rates

Adoption of GST legislation by Centre & State

Features of GST

Destination and Supply based Taxation

GST having two concurrent components (SGST & CGST)

IGST (Integrated GST) on inter-State supplies of goods or services in India

Online returns and information to be submitted

Each taxpayer would be allotted a PAN-linked taxpayer identification number

Target implement from 1 April, 2017.

Benefits

Free from multiple taxes

Uniformity in taxes across the country

Eliminates cascading of taxes

Eliminates dual taxation (Vat and

Service tax) on same transaction

Development of common national

market.

Simpler tax regime

Which taxes are Subsumed

CGST

• Central Excise Duty

• Additional Excise Duties

• Excise Duty-Medicinal and Toiletries Preparation Act

• Service Tax

• Additional CVD

• Special Additional Duty of Customs - 4% (SAD)

• Surcharges

• Ceses

SGST

• VAT / Sales tax

• Entertainment tax (unless it is levied by the local bodies).

• Luxury tax

• Taxes on lottery, betting and gambling.

• State Cesses and Surcharges (supply of goods and services)

• Entry tax not in lieu of Octroi

There are few other indirect taxes that may or may not be subsumed under the GST regime as there is no consensus among Statesand Centre & States –• Purchase tax | Stamp Duty | Vehicle Tax | Electricity Duty | Other Entry taxes and Octroi

GST - Registration

• If you are already registered, need to submit required

documents within 6 months (provisional registration

given when the law is enforced)

• Service tax registration has to be reapplied in all the

applicable states

• Place of Registration

o Every state in which you have operations

o In case of multiple verticals in each State, separate registrations may

be obtained for each vertical

GST – Compliance Requirements

Monthly statementof outward supply

•10th of Each Month

• Submitted Electronically

Monthly statementof inward supply

•15th of Each Month

• Submitted Electronically

Returns

• Monthly

• Annual

• Input Service Distributor Return

• TDS / TCS Return

• Submitted Electronically

Refunds

• State-wise for IGST/ CGST/ SGST

•2 years from therelevant date

•Provisional refund of80%in case of exports

• Submitted Electronically

GST - Input Credit

• Input tax credit is available to registered taxable person with reference to supply of goods and services

• Credit not available for goods / services for private or personal consumption

• Electronic matching critical for credit eligibility, coupled with payment of tax by the supplier a criteria and the same to be recovered along with interest

• Distribution of input tax credit for input service distributor for all the states where located, based on turnover

Tax ITC Adjusted Against (in specific order)

CGST 1. CGST2. IGST

SGST 1. SGST2. IGST

IGST 1. IGST2. CGST3. SGST

GST - ValuationValue shall be ‘transaction value’where supplier and recipient are unrelated &price is the sole consideration

Transaction value will include:• Any amount paid by recipient instead of supplier• Value of goods / services supplied by the recipient free of charge or at

reduced cost• Taxes and duties other than GST• Incidental costs/ expenses (such as commission, packing, royalties etc.)• Subsidies linked to the supply• Reimbursable expenses incurred on behalf of the supplier• Discount or incentive allowed after the supply

• Carry forward of CENVAT credit/ input tax credit as disclosed in

the last return furnished - Credit would have to be eligible input

tax credit under the earlier law and also under the new GST law

• Un-availed CENVAT credit on capital goods, not carried forward in a

return to be allowed in certain situations

• Pending proceeding of appeal, revision, review initiated in

relation to the CENVAT credit/ output duty liability before the

appointed day to be disposed of in accordance with the

provisions of the earlier law and any amount of credit found to be

admissible to the claimant shall be refunded in cash

• Stock held at Depot / held by dealer on transition date would

suffer full rate of GST, as against present VAT/CST rate. Also,

credit of excise duty paid at the time of manufacture may not

be available

GST - Transition Provisions

GST - Transition Provisions

Carry forward of CENVAT credit/input tax credit as disclosed in thelast return furnished - Credit wouldhave to be eligible input tax credit

under the earlier law and also underthe new GST law

Unavailed CENVAT credit on capitalgoods, not carried forward in areturn to be allowed in certain

situations

Pending proceeding of appeal,revision, review initiated in relation to

the CENVAT credit/ output dutyliability before the appointed day tobe disposed of in accordance withthe provisions of the earlier law andany amount of credit found to beadmissible to the claimant shall be

refunded in cash

Stock held at Depot / held by dealeron transition date would suffer full

rate of GST, as against present VAT/CST rate. Also, credit of excise

duty paid at the time ofmanufacture may not be available

Key Aspects to Consider

Impact on cost to Customer – Changes

in tax rates and credits

Restructuring of Supply

Chain to bring efficiencies

Compliance and control – Credit

matching of vendor filings, changes to IT

system

Key Transition Challenges – Working Capital and ITC

Problems

- Current supply chain may tie up excess working capital

- Supply Chain reduces the amount of ITC available

What we offer

- Optimise Supply Chain

- Processes to enable future decision making

Input Tax Credit & Working Capital

Key Transition Challenges

Pricing, Costing, Margins

Problems

- Impact on pricing due to

subsumed taxes

- Product pricing as per GST

Law

- Change in margins for

each product

What we offer

- Pricing Simulation

Key Transition Challenges

ERP and other IT Systems

Problems

- Identify changes required

in IT systems with respect

to transaction capture,

reporting and return filing

What we offer

- Integrated approach to

define changes and

managing the change

program

Key Transition Challenges

Internal Compliance Management Processes

Problems

- Staff awareness

What we offer

- Training

Key Transition Challenges

Registration

Problems

- Where to register?

What we offer

- Integrated approach to

define changes and

managing the change

program

Key Transition Challenges

Vendor Base

Problems

- Non-compliant vendors

will impact ITC

What we offer

- Vendor Review

Our GST Transition Methodology

GAP Assessment

•Assess the Impact

•Identify areas of change

Design Future Process

•Design the future process

•Define the impact due to change on P&L, Cash flow

•Changes to IT Systems

•Supply Chain

Management Sign-off

•Key Stakeholders Sign-off on the future process

•Changes to pricing & margins is approved

Implement

• Project Manage Implementation

ProHats Consulting LLP

Head Office: Plot no.944, LGF,Sector 40, Near Community Centre,Gurgaon – 122002,Haryana, INDIAPhone: +91-124-4303590

Regional offices: Indore & Bangalore

For any general query, please mail across to:prohats.consulting@gmail.com

For Specific query, pls get in touch with the Assignment manager

Contact Us

Thank you…

…and we look forward to working with you.