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Roadmap to GST Implementation
What business needs to do?
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Passing of GST Bill by Rajya Sabha: An important milestone in entire
Long pending 122nd Constitutional Amendment Bill (CAB)
was passed in Rajya Sabha on 3rd August 2016, giving
concurrent jurisdiction for both Centre and State to tax under
the GST regime.
GST is unified indirect taxes, with cross sectional credit.
Existing taxes Central Excise, Service Tax & VAT etc. would be
subsumed to be one GST. Under present regime, VAT credit
cannot be used for payment of central excise/service tax and
vice versa, however in GST regime there would be the levy of
GST on all transactions and hence ensuring a smooth credit
Introduction of GST would change the way business is
done. It would throw host of opportunities and challenges for
the business and it becomes imperative for them to gear up
themselves for adapting the change.
Now in this background where the GST has become almost
reality, what is to be done for being prepared to face GST is
discussed as under :
Roadmap for GST Implementation
1. Understand the Model GST Law:The Model GST law covering draft Central GST Law, draft
State GST Law and draft Integrated GST lawis in the public domainsince 14th June 2016
onhttp://www.finmin.nic.in. It is required to go through the law as is relevant to concerned
and understand the implication of the same on the business/profession/industry.The ICAI
has prepared a training manual for CBEC + VAT Officers available for general public –
2. Representation:Since the model GST law is prepared by the representatives of
Government, it seems to have missed out the focus on the interest of the public at large,
therefore in the interest of the concerned, it is required to identify the provisions, which are
having adverse effect on your business or industry and make a suitable recommendation for
change of law.
3. GST Impact Assessment:Since the new GST law is going to change the entire dynamics of
the business in many respect, it is essential to understand the impact of the changes on
different aspects of the business like procurement, production, job work, storage,
distribution, marketing, finance including cashflow, final consumer etc.Therefore it is
essential for any entity to carry out GST impact assessment to analyse effects of GST.
This can be carried out either by the in-house team of an outside professional.
Stages in rolling out of GST:
Passing of CAB by atleast 16 states
Formation of GST Council
Passing of Central Goods and Service
Tax (CGST) and Integrated Goods
and Service Tax (IGST) by CG
Passing of State Goods and Service
Tax (SGST) by all state governments
Issuance of Rules, Regulations,
Notifications and Circulars
Develop Goods and Service Tax
Network (GSTN)- substantially
Testing and making GSTN live
Transition to GST
Actual Roll out- target date 1.4.2017
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4. Training the Resources: As the concept of GST is different from the existing methodology
and procedure, there will be requirement for unlearning many things and relearning many
new things. Therefore in the interest of the entity, it becomes essential to train their
resources at accounts, taxation, procurement and other impact areas of the entity.
5. The Key Decisions: Since the GST is going to change the costs of different elements of the
products and/or services, it becomes essential to relook at the pricing of the products, cost
of procurement compared with different sources and other operational areas. Therefore key
decision making has to be done in all the affected area due to GST changes.
6. Impact on the long term contract:All the long terms contract, which would be stretching
beyond 01.04.2017 needs to be re-looked into as to impact of GST and whether the terms of
the contract has addressed the same or not. If the same is not addressed in the contract,
action may be initiated to deal with the same with other party and terms be re-negotiated if
necessary with mutual discussion before the effective date of introduction of GST.
7. Development/modification of Standard Operating Procedure:GST implementation is
nothing but change in law as well as procedures. The changes required to be adopted in the
procedures being followed by the entity have to be assessed. In that direction it is essential
that the entity may have to either develop new standard operating procedure (guideline of
procedures) or amend the existing one.
8. Development/modification of Information Technology infrastructure:Today most of
the entities rely upon the Information Technology to carryout their business/profession.
With the introduction of GST which is essentially run based on centralized information
technology portal, the entities are required to either develop their infrastructure to suit the
requirement of GST or to modify the existing infrastructure to suit the same.
9. Vendor Development: Having organized Vendor base is very important in the GST regime
and hence Vendor Development and training needs to be done to support its own business.
10. Gear up for Transitional issues:In any change, there will be transitional clutches. The
transitional issues may be of business issues which need to be dealt internally, or to be dealt
with outsider. Further also there can be transitional issues related to statute either to
comply with the law or to avail certain benefits given by law. Non-addressing of the said
transitional issues may lead to loss in business, loss of credit, non-compliance of law etc. It is
therefore essential to concentrate on the same.
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To conclude as it is said “When the change is inevitable, we have to change to get best out of
the change”,we need to work around the changes expected to come and get the best out of the
change to ensure that the objective of the entity concerned are met.
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(The material and information contained herein prepared by Hiregange & Associates for their clients and chartered accountants to
apprise them about important updates in GST . All efforts have been taken to make publication error free. We are not, by means of this
GST Implementation: Key Processes
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material, rendering any professional advice or services. Hiregange & Associates or the partners thereof would not be responsible for
any action taken based on this publication without prior consultation.)