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Under GST laws, entities supplying taxable product and services need to be registered all the states from which these will be supplied. The entity already registered in a state under  existing law should be migrated to GST regime. Unregistered entities will have get registered in specific states from which supplies are made. The window for this is likely to open from June 25 for month or so.

IT systems will need to readied, and all the requisite changes made, to issue invoices from the first day of GST regime. Invoice formats will have to be a amended as soon as possible. Moreover, according to GSTIN requirements, customer related data as well as tax codes and conditions will need to be updated in IT systems and configured to generate reports required for GST.

It is imperative that all employees and supply chain partners, such as a vendor and distributors, C And F agents, are trained well on amendments in the law. And since the GST law envisages seamless passing and credit of taxes only on suppliers’ compliance with its requirements, it imperative that all stakeholders are appropriately educated on the compliance-related requirements.

Supply of goods or services will attractive tax in the GST regime. Credit provisions will also see changes. In the addition, if a company is registered in different states, it will be treated as a distinct entity for levy of GST. Considering the quantum of changes, irrespective of whether In order to determine the tax treatment of the transactions. After the mandatory tax treatment is determined, the transaction will need to be configured in the entity’s IT system.

From taxation being imposed on manufacture or sale of goods and provision of services under the present system, it will move to GST being levied on supply of goods and services. In addition, there are various other procedural amendments, such as self-invoicing in case of purchases made from unregistered vendors, reversal of credit in the case of non-payment of consideration for goods, etc. Such amendments in the law will necessitate significant changes in various business processes and it will be necessary for entities to assess the impact of these and change the processes, wherever required.

Under the existing indirect tax regime, a correlation between the location of receipt of input services and receipt of invoices for such services any location in India is not required. In the GST regime, since the credit pool for every state their need to be maintained separately, it is necessary to ensure that an invoice for input services is received at the place where credit of such services is eligible. This will need an analysis of procurement of services and amendment of contracts with service providers, where required. Similarly, contractual terms with customers will have to reassessed and revised, if needed.

At present, the margins of supply chain partners such as distributors and retailers computed on the assumption that they are only liable to pay VAT on their sales price. And accordingly, their margins will need to be recomputed due to the changes in tax rates, availability of credits. And in addition revised margins for supply chain partners, the impact on tax credits and movement in the tax rate along with anti-profiteering provisions under GST is require companies to the prices of goods or services supplied by them. Therefore, they will need to determine the overall impact of the new taxation regime on their businesses before taking any decisions on pricing.

GST provide for carry, forward of accumulated tax credit and claiming crediy of various taxes paid on stock in hand, subject to fulfillment of the prescribed conditions. Furthermore, for carry forward by their VAT credit balance, taxpayers will have submit their sale tax declaration forms or certificates in Form C, Form F, Form H, etc.., The relevant declaration forms and certificates not been submitted to authorities. So there is an urgent need to accelerate submission of these forms — sooner rather than later!

Products and Services

GST Invoicing