Goods and Services Tax (GST) is by far the most significant and comprehensive reform in Indian taxation history. Every business, small or big, is bound get impacted by it. Therefore, it becomes all the more important to prepare for GST well in advance. Should GST roll out from April 2017, this is your 7 point list that need your attention for seamless transition to GST:
1. Re-vamp ERP: Your ERP structuring has to undergo a major change, be it coding or invoice generation. Be it purchase order booking or expense recording. The first thing that needs attention is ERP.
2. Modify contracts: Companies, in practice, enter into annual contracts. Therefore, many contracts entered today would speak of delivery of service/ goods post April 2017 also i.e. post GST. Make sure an appropriate addendum is made to contracts to align it with GST.
3. Enrolment under GST: Registration is pre-requisite to any business. It is without a doubt a key activity to get your Excise/ Service Tax/ VAT registrations transferred. Currently, window for registration migration is open.
4. Engage with government: At this stage wherein government is deliberating law, most industries are reaching out to government with their suggestions on amendment in proposed GST Law. This could be to ease our ambiguous provisions or benefit a particular industry. Companies, normally, reach out to government through associations they are registered with.
5. Interact with your vendors/ customers: Ensure that your vendors/ customers are in sync with what needs to be done under GST and how tax implications would change.
6. Tax planning: Proposed GST Law provides transitional provisions. It is necessary to go through these provisions in context to your business and analyse on tax planning opportunities. Also, re-visit your tax positions to see where you stand today and how GST impacts you. Basis assessment, explore tax planning opportunities.
7. Get ready for compliance: Proposed model GST Law calls for three monthly statements and annual return at minimum per state. It also speaks of input credit matching. In all likelihood, compliance is set to go up. Therefore, systems should be in sync to throw reports that would enable timely compliance.