One Evening of September’2009. I was very happy, and then revealed the secret of my happiness to my team, “Guys, soon life of accountants will be totally changed”, next few months would be full of excitement. GST is going to be implemented; IFRS & Direct Tax Code is in process. But Govt’s slow system & dirty politics did not let it happen as planned. IFRS could not be made applicable as expected, revision in schedule VI worked for most of the entities, No Direct Tax Code used to replace Income Tax but continued with small reforms, and now after great struggle, GST is ready to lead the world of Indirect Taxes. For many days/months, we are reading and listening one word “GST Implementation”. Accountants in Big Companies or CA’s in Big Firms would be working day and night to get their system GST Compliant Ready, But Accountants with small companies/firms with small clients are still confused? What to Go? How to Prepare or Get Ready for GST? Just to give them some clarity, How they should procced, for my these young accountants brothers & sisters, I have written this article. Hope they will find it useful.
1) Clear the Mess: First of all, make a detailed scrutiny of all Input Tax Credit Accounts, There should not be ad-hock balance but supported by all invoices, if there is additional balance make adjustment entries. Similarly All Payable Taxes (Excise/VAT/Service Tax), balance should be clear, against invoices. Make sure on 31st March’17 balance in accounts and returns should be at par, if required revise returns. If not possible, make it by 30the June’2017.
2) Maintain the Masters: SAP & ERP Companies are working for making their softwares GST Ready for Years, Now Tally and Busy have also issued their tutorials on the same making updated versions ready. You can find many on Youtube shared by Experts, or Blog & Knowledge Portals run by Tally & Busy, Link are on their official websites. First ensure your masters (item master for tax rate, HSN* & SAC Code & Category, Customer & Vendor Masters to incorporate GSTIN Number & Complete Contact Details, Tax Master to Enter New Tax Rates & Slabs) are compatible for GST Requirements.
*List of HSN Codes available on GST portal. (www.gst.gov.in)
3) Time to Re-Negotiate: This is Purchase Department’s Job, But in small & mid companies, This is also accountant’s responsibility, even if not, you can advise purchase department for the same. There would be many vendors you entered into contract only for tax advantage e.g. if you are registered dealer in Delhi, You got 2 quotes from 2 vendors, Delhi for Rs. 1 Lac + 5% Tax, Haryana for Rs. 99K + 2% CST. You finalize Delhi Vendor in spite of High Rate as you can avail Input Tax Benefit, in other case, Tax is just part of Cost. In GST Regime IGST will also be available, So time to re-negotiate rates subject to other terms & condition. (& Remember your customers can also approach you for the same, so be ready, make each deal win-win for both).
4) Commercial Property – Fall in Rates: If you are planning to take some premises on lease, just wait, many companies will vacate their additional warehouses and branch offices that were opened only as part of tax planning, to receive or issue tax invoices. Now, Under GST, It is not required, minimum requirement of E-waybill and same tax in major part of country, most companies will prefer to have centralised operation, as more offices/branches – more compliances. So if you too have such places think again and surrender if not required.
5) Practice: Create dummy companies in tally/busy. Assume GST has already been implemented. Pass Entries for all applicable transactions, Movement of Goods, Purchase and Supply of Goods, Input Tax Credit Adjustments, Payment Entries, Goods Returns, Disputed Cases to Move in other Accounts for Easy Reconciliations, Issue of Debit/Credit Notes, Job Work/Works Contract Cases, Valuation for Supply to Related Parties including Employees. Transaction with Reverse Charge. Assume all such scenarios & Practice.
6) Keep Updating Yourself: Govt is updating their portal, issuing guidelines on almost daily basis, make a habit to visit daily GST & CBEC website atleast once. Currently you can find on GST portal, what type of systems required, how to use digital signature. How Dashboard will work for a registered taxpayer & Returns – explained in detail at GST Website. (Link : http://tutorial.gst.gov.in/documents/prototypes.pdf)
This time Industry is looking at accountants, as all relatives look at groom in a marriage ceremony, do not shy, but shine with your knowledge. Do not say I am not a tax person, I only make cheques or post entries, It does not matter what you do, If you call yourself an accountant (no matter what designation you hold, an executive or a CFO), you must have good idea about GST. Keep Learning. Keep Growing. All the Best. Thanks.
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