1. GST-IMPLEMENTATION-Role of CMA
SURAT CHAPTER OF WIRC OF THE INSTITUTE OF COST ACCOUNTANTS OF INDIA
Dated 27/05/2017
A Presentation by
CMA. (Dr.) Shailendra Saxena  
B.COM,SAP(FICO),ACS,FCMA,FCA,DISA(ICAI).Ph.D.

2. Comparison : Present Taxation Vs. GST

3. CMA Role in IT Functional requirement for IT System
Advice for preparing GST Compliant IT systems.
Identifying all possible business requirements to be captured in the IT System.
Segregating the identified requirements into two parts (a) Mandatory and (b) Recommendatory
Validating the GST compliant IT System
Understanding Client current System
Understanding Government System
Identifying requirements
Coordinating with System Team
Validating client IT System

4. When is IT System GST Compliant? Business Processes mapped to GST
Local and Inter State Procurement (goods and services)
Bill to ship to procurement/supplies
Imports
(Separate Value for BCD and IGST)
Sale / Services / Stock transfer / Transfer to own unit
(Local + Interstate)
Job work transaction under Section 43A
Taxes Export with payment of taxes and without payment of
Inter unit taxability /captive consumption
Consignment agent / mixed supply / Free Supplies
Sales return / sale on approval
Input service distribution /Reverse Charge Mechanism
Supplies without considerations
OTHERS

5. When is IT System GST Compliant?
Lakshmikumaran & Sridharan
11/5/2017
When is IT System GST Compliant?
Data fields identified and captured
Master data
Tax codes
Pricing Procedure and Conditions
Purchase order / Sales order etc.
Invoices/debit or credit note etc.
Input tax credit claims
Preparation records/registers/other documentations etc. for all business processes.
Computation of liability,
Return preparation
Others
© 2014 Lakshmikumaran & Sridharan

6. When is IT System GST Compliant?
GST Returns / GST Ledgers / GST Records & Registers
All GST returns getting automatic generated from software with minimal human intervention. Line Item wise data required in return.
Cash Ledger / ITC Ledgers / Tax Ledgers / ISD Ledger auto generated by Client System (GSTIN and PAN wise)
Mapping of ledgers generated by Client System with ledgers maintained by GSTN system.

7. GST Ledgers Three Electronic ledgers to be maintained:
1. Electronic tax liability register:
2. Electronic credit ledger:
3. Electronic cash ledger:

8. GST Refunds: Common refund application to be filed through GSTN.
No Unjust enrichment: Refund application to be accompanied by prescribed documents along with CMA Certificate- GST RFD- 01
The acknowledgment for filing refund application will be available in GSTN after verification of information and documents filed. Immediate acknowledgment for cash ledgers- GST RFD-02
Provisional Refund of 80% subject to GST Compliance Rating- GST RFD-04
Refunds, provisional refunds and interest on delayed refunds to be directly credited to the bank accounts- GST RFD- 08/09

9. GST Returns:
Different forms prescribed for outward supplies, inward supplies, communication of the input tax mismatches, final acceptance, mismatches adding to the output liability, etc.
Finalization of GSTR-1 (sales register) and GSTR-2 (purchase register) at GSTN.
GSTR-3 auto populated data: cash details as per Electronic cash ledger/ carried forward from previous tax period, ITC carried forward from previous tax period, ITC reversal and associated Interest/Penalty, taxes paid during the current tax period etc.
To pay such amount as shown in the draft GSTR-3 return generated automatically.
To debit the electronic cash ledger/ credit ledger and mention the debit entry No. in the GSTR-3 return.

10. When is IT System GST Compliant?
Reconciliation
Effective mechanism of reconciliation of purchase details uploaded by Clients with details uploaded by vendor and customers in GSTN system on daily basis.
Proper integration of details provided by GSTN system with details available in Clients system.
Concept of acceptance/rejection to be captured in Clients System.

11. When is IT System GST Compliant?
Transitional Situations mapped
Purchase / sales order prior to GST regime but invoice post GST Regime
Issuance of debit / credit note issued post GST regime in respect of invoice issue pre GST Regime
Receipt of goods from Job worker post GST regime but inputs issued pre GST regime
Others

12. CMA ROLE - FINACIAL IMPACT
Lakshmikumaran & Sridharan
11/5/2017
CMA ROLE - FINACIAL IMPACT
GST IMPACT ANALYSIS
Capturing the present business in “as is” condition and to identify the impact of Model GST legislation
Mapping the current taxes paid on procurement of goods and services
Mapping of GST to be paid on procurement of goods and services.
Analyzing increase in credit blockage and working capital outflow on inward side.
Taxes paid on output – Analyzing any change in quantum of taxes to be paid under GST regime.
Analysis of net GST impact on the current model including cash flow
Recommendations and suggestions for tax optimization;
CHANGE IN CREDIT
IMPACT ON WORKING CAPITAL OUTFLOW
IMPACT ON COST
IMPACT ON PRICES
IMPACT ON COMPANY
© 2014 Lakshmikumaran & Sridharan

13. CMA Role in Transitional Advisory
Section 156 of Model GST Law {Transitional Provision}
As per Section 156 of Model GST Law, upon finalization of proceedings regarding output tax liability, credit of amount paid not admissible.
ISSUE : Pending Litigations
If matter decided against clients, whether credit of duty paid will be available to the customer?
Should Clients pay tax under protest and raise supplementary invoice
Strategy

14. CMA Role in Transitional Advisory
No transitional provision of excise duty benefit
ISSUE : Transitional Stock
GST leviable on transitional stock but no excise duty benefit
Stock optimization?
Strategy

15. CMA Role in Transitional Advisory:
Credit on inputs and inputs in semi-finished goods or finished goods held in stock:
Presently transitional provision not including provisions for credit to be taken by traders (who have paid excise duty for goods), though representation have been made for same.
Likely results to be incorporated in the amended provisions for same to avoid litigation.
Credit of inputs, and inputs in semi-finished goods or finished goods held in stock on the appointed day permissible, if following conditions fulfilled:
Such inputs/goods are used/intended to be used for making taxable supply
Eligible for credit under the earlier law but for his not being liable for registration or the goods remaining exempt under earlier law
Eligible for input tax credit in the GST law
In possession of the invoices or other prescribed documents not older than 12 months preceding the appointed day

16. CMA Role – Transaction Advisory
Job work model vs P2P Model
Re-examination of procurement policy ( Say FOR or Ex factory purchase, inter state or local etc.)
Mechanism of giving post sale discounts
Purchase of motor vehicle vs renting of motor vehicle vs transportation services.
Avoiding blockage of seamless flow of Credit (Rule 5 of POPS Rules)
GST efficient restructuring of transaction

17. CMA: Representation to Policy Makers
Representation related to amendment in GST Act/Rules
Stock Transfer – Valuation Provision / Transitional Provision for excise duty benefit on transitional stock etc.
Representation related to issuance of Circular for clarifications
ITC on construction related activities / Taxability of inter unit adjustment etc.
Representation related to issues in return filing/procedure
As and when required

18. CMA Role – Additional Role
Reviewing of Contracts
Existing clauses / Transitional clauses / Benefit of extra ITC available to vendors to be passed on to Clients
GST applicability on contracts with vendors – Avail exemption / lower rate benefit
ITC available only if vendor deposit the GST – Safeguard in contract
Training / workshop
Central Information Cell : Common GST treatment for common issues across plants
Appropriate training at all level of clients, across all plant and head office. Different departments to be trained.
Vendors Training

19. CMA Role – Additional Role
GST implementation and compliances
Guidance on the registration requirement, invoicing requirement, computation, set-off, etc.;
Providing detailed compliance calendar under the GST Regime which needs to be followed by the company;
Assistance for maintaining suitable records under the GST Regime;
Review of the sample documentation such as invoices, bill, etc. and registration to ensure that these are compliant under the GST regime;
Review/ vetting of initial first returns to be filed with the authorities under the GST

20. CMA Role – Additional Role
GST implementation and compliances
Providing guidance as and when required on issues arising in routine business operations from GST regulation perspective;
Time to time advise on routine queries raised by the company for initial months to ensure that appropriate compliances under the GST regime; and
Providing suitable guidance on the key amendment / clarifications issued by authorities under the GST regime which may impact the company.

21. THANKS!!
Any Questions ?
Contact for post sessionquery: CMA. (Dr.) Shailendra Saxena  |
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