CA MUKUND CHOUHAN Mumbai amp Surat mukundchouhangmailcom 1 Every organization shall be prepared itself for the change in the tax structure New name of Tax CGST SGST UTGST and IGST ID: 639791
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Slide1
Impact of GST on Running Business Entity
CA MUKUND CHOUHAN Mumbai & Surat
mukundchouhan@gmail.com
1Slide2
Every organization shall be prepared itself for the change in the tax structure.
New name of Tax CGST, SGST, UTGST and IGST.
Plan changes the method of functioning of various Departments namely, Purchase, Sales, Job work, I.T. Department etc according to Law framed for GST regime.
Various Current Activity of the Business Organization required to be amended / changed for compliance of GST Law.
Continue….
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2Slide3
Sales Department
Update data in system like Name, full address etc.Enter GST Number of buyer, which is mandatory to appear on sales invoice for the purpose of Credit.
Update commodity Code number of Goods / Services provided by the organization .Amend the program with the option to choose the transaction one intra-state/inter-state.
Update program that if transaction are intra-state then charge CGST + SGST. If transaction are inter-state then charge IGST.
To be ensure that correct and Complete information should be uploaded in common portal of the Govt.
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3Slide4
Purchase Department
Once Sales return is filed by all the supplier, Auto populated Credit will reflect in the Electronic Credit register.
Develop the System to verify the correctness and completeness of purchase credit required to be matched with purchase register.
Develop the system of matching of input Tax Credit with the help of software to ensure full Credit has been received.
Any difference in input Tax Credit amount Auto populated are not matching with purchase
Ledger then immediately take suitable Action.
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4Slide5
Need Amendment in Purchase / Sales order
The format of purchase order need to be amended suitable and additional columns are to be added or deleted.
If any continue supply by supplier on the basis of old P.O. on The appointed date, then it should be replaced by new P.O.
Similarly the format of Sales order to be amended.
In case of continue supply against old sales order, then replaced it with amended order, with all required information.
Prepare the list of new supplier and new buyer, who are new Taxable Person in GST Regime.
For new supplier and buyer update the software with required information
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5Slide6
Change in Discount Policy
No MRP base excise duty structure in GST Regime
If the product of company is liable to excise duty on MRP basis , like FMCG company , Electronic goods etc. then to change in the planning of quantity based discount. (Current Free Scheme)
Plan the date of clearance of goods from factory under MRP base excise duty structure, so that minimum required stock should be maintained in the hand of dealers / distributor.
If the company has policy to provide cash discount to dealer / distributer, after the clearance of goods from factory, then the system should be changed to show discount on the face of invoice
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6Slide7
Change in invoice Format
Format of invoice under Excise Law and VAT Law are not acceptable.
The Draft Invoice Rules Specifies that the invoice prepared under GST Act shall contain the various information.
Format of invoice must be ready before appointed date, to incorporate all details specified in the Rules.
Product Master / Customer master should be emended / incorporated suitable, so that the system can automatically pick-up the information from the detailed available in the Master Record.
Provision for Special Customer, having UID Number, So that they can claim refund.
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7Slide8
Update Master Record
Customer master
Must provide with GSTIN Number of Customer.
Address of Supply ( if the Supply is at more then one location )
Address of each location of Customer
Classification of Customer as B2B or B2C.
Nature of Tax to be levied.
Place of Supply.
Address of Job worker, if Goods are directly need to supply to Job Worker on behalf of Principal.
If the Customer is related person as per definition of GST Act. Valuation Rule will Apply.
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8Slide9
Product Master
Incorporate the HSN Number of the Product
Unit of measurement for each product
Description of Product machinery with HSN Number
Tax payable on reverse charge basis.
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9Slide10
Input Master
Segregate the input eligible for credit and not eligible for credit
Use of inputs / Services for exempted supply.
Use of input / Services used for taxable and exempted supply both. ( For proportionate
Credit ).
On clearance of goods, in many cases, need payment of amount and not tax.
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10Slide11
Input Service master
Suitable amended to eligibility of credit on input service.
Availment of Credit as input Service Distributor
Name and Address of Supplier of Service to company.
If company providing outward supply, then accordingly amend
output service master
Many company selling the goods and providing services from same registered premises.
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11Slide12
INPUT SERVICE DISTRIBUTOR
Credit will be auto populated based on the Registration number declared on the invoice
The Company must bifurcate input service into specific service or common service.
Under Sec. 20 (2) ( c ) of GST, tax paid an input service for specific unit / recipient that transfer full amount to specific unit
Under Sec. 20 (2) (d) Credit of tax paid on input Service, attributable to more than one unit / recipient then distribute on pro-rate basis of the turnover.
In no Circumstances ISD will distribute the credit in access then available credit.
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12Slide13
JOB WORK
Try to keep minimum stock with Job worker on the appointed date.
Declaration of stock lying with job worker on appointed date, shall be filed by Principal as well as Job Worker.
Stock laying with the Job work, must be returned to the premises of Principal supplier, within 6 month from the appointed date, otherwise GST in
leviable
On sufficient cause shown to commissioner, he may extend period from 6 month to 8 of months.
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13Slide14
UNITS LOACATED AT EXEMPTED AREA
The Central Excise Notification issued for exemption from payment of excise duty to the goods manufactured by units located in specified zone will be rescinded.
The State Govt. may give refund of tax under special scheme to those units upto the remaining period of exemption.
Therefore Supply made from such units will also be liable for payment of GST, from appointed date.
The Stock of goods lying at factory or lying in depot located any where in India, have to declare stock on appointed date.
Credit of excise duty available, if duty paying documents are available.
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14Slide15
DECLARATION OF CREDIT IN RETURNS
Every Person registered with earlier Law is required to file return under the relevant Law before the appointed date.
For Central Excise
Assessee
ER-1/ER-2 Return, For Service Tax Assessee ST-3 Return, For assessee registered with VAT department state VAT Return.
All the Return in Form ER-1/ER-2/ST-3/VAT, Return indicate the closing balance of credit available with the assessee will be auto populated with the opening balance of GST regime.
Therefore all assessee must ensure that the entire credit available with him is declared in the returns.
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15Slide16
REGISTRATION
The Person registered with Central Excise /Service Tax/VAT have to take provision Registration under GST Act before appointed day.
To get converted provisional Registration to Final Registration, within 6 month from the appointed date, otherwise it will be can cancelled.
The current input Service Distributors will not be converted into provisional registration.
The person intending to obtain registration
under
ISD
will have to apply a fresh for obtaining
registration on ISD.
There is no concept of Centralized Registration in the GST.
Therefore many service provider have to take
Statewise
GST Registration. Therefore indentify the Principal place of business and additional place of business carefully.
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16Slide17
Transitional Provisions
Procedure should be started to obtain Final Registration certificate and obtained within Six month, by existing Tax Payer.
To take credit of unavailed CENVAT credit in respect of Capital Goods, not
carried
forward in the return.
For new registered Taxable Person, credit on stock (input, WIP, Finished Goods) will be allowed based on invoice and other prescribed Documents, evidencing the payment of Duty.
New Registered person, having stock on appointed day, but not having invoice , will be allowed Deemed Credit, in such manner as may be prescribed.
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17
When input and input Service received on or after the appointed date, but duty/Tax has been paid before appointed date, then Credit is admissible, if invoice are recorded in books of Account within 30 days from the appointed day.
Input Service Distributor received the invoice after the appointed day, showing the payment of Tax, prior to appointed day, can distribute the Credit.Slide18
Transitional Provision for Job Work
Where inputs or Partially Processed Goods are removed to a Job Worker, Prior to appointed day, but return after appointed day, then it must be returned within Six month from appointed day, otherwise GST has to be paid by Principal Supplier
Job worker have to Submit Declaration, in prescribed Form, for stock in hand on appointed date, supplied by each Principal manufacturer.
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18Slide19
Miscellaneous Transaction Provision
Any duty paid Goods returned after appointed date, which was sold not more than six month from appointed date, then Refund of duty will be allowed, subject to identification of goods
Every refund claim filed by any person before on or after the appointed day, for CENVAT Credit, Excise Duty, Service Tax, interest etc for amount paid under the existing
Law, and he is eligible for refund in GST regime, then amount shall be paid in Cash.
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19Slide20
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