Government is trying hard to implement GST with effect from 1st of July 2017, so the time has come to pull up your socks and keep yourselves ready to handle this transitional phase of the biggest tax reform in India. For the smooth transition from the existing structure of Indirect taxes into the new GST regime, both businessmen and the consultants have to give their best efforts in terms of time and knowledge.
Not only the consultants but the businessmen must also educate themselves regarding laws and provisions of this proposed GST regime. As of now, the most important provisions that have to be followed religiously by every businessmen and consultants in India are the transitional provisions under GST, but ironically these provisions have not been finalized by the Government yet and only the draft provisional rules are available with us. The GST council is expected to release these final rules in its next meeting scheduled to be held on 3rd of June 2017. But we can’t wait for the final provisions to come, because the time final transitional rules are out, all the consultants will be super busy and we will have to compromise with the quality of work then. So let’s not waste any time and start with what is available with us.
This article points out the steps to be taken by both the businessmen and the consultants for smoother transition into the proposed GST regime.
Steps for Businessmen:
1. Prepare details of stock in hand.
2. Prepare details of stock with Job workers.
3. Prepare details of Capital Goods in hand.
4. Prepare details of Capital Goods with Job workers.
5. Prepare details of ITC available in such stock and Capital Goods. (Consult your legal advisor, tax consultant or CA for ELIGIBLE credits).
6. Every registered person entitled to take credit of input tax on goods held as on the date of registration, shall within sixty days of the appointed day, submit an application electronically in FORM GST TRAN-1. So check out the information required in this form and start preparing now.
7. Businessmen should finalize their formats of Tax Invoice, Bill of supply, debit notes, credit notes, delivery voucher, payment voucher, refund voucher etc. or buy some goods billing software.
8. Under the GST regime tax on supplies received from un-registered supplies has to be paid by the recipient of such supplies, so businessmen should encourage their suppliers to get them registered under GST.
9. Businessmen should ask their consultants every time before entering into any financial transactions, especially traders and manufacturers who are not in habit of paying tax under Reverse Charge mechanism and Advance Payments. Also for them provisions of TDS & TCS under the proposed GST regime would be new.
10. Keep list of transactions covered under reverse charge mechanism handy.
11. Ensure the rates and tax ability of their products and supplies under the proposed GST regime. List of most of the taxable Goods and services with their codes and rates, along with list of exempted goods and services have been provided by the GST Council on 18th of May 2017. So one must start checking this list thoroughly to know the tax ability of their goods and services.
12. In case you are already registered under the existing tax laws to be subsumed into GST but however you are not required to be registered under GST, you must either apply for the cancellation of the existing registration before the appointed day or otherwise within thirty days from the appointed day, you may submit an application for cancellation in FORM GST REG-28.
13. Final or last return under the existing tax regime is very crucial and will decide the amount of taxes to be carried forward into the proposed GST regime, so proper caution and care should be taken while filing this return, as any revision of this return afterwards may have huge impact on tax liability under GST and may lead to revision of multiple returns (MONTHLY) in case any error or omission is discovered later on.
Steps for Consultants:
1. Check clients who were earlier not registered under any tax law, but now may be liable for registration due to RCM, or were supplying goods below threshold limits say Rs. 20 Lakhs in Delhi and were also supplying services below threshold limits of Rs.9 Lakhs, however now aggregate of their supplies of goods and services goes above Rs. 20 Lakhs.
2. Inform clients about HSN codes & rates applicable to their businesses.
3. Educate your clients about provisions about e-way bills.
4. Educate your clients about documents to be carried by transporters or carrier of goods.
5. Educate your clients about the situations & manner of issuing invoices and other documents like advance receipts, payment vouchers etc.
6. Help your clients in finalizing invoice formats, stock details, ITC details etc.
To conclude, let’s not panic and let’s start collecting all the documents and preparing all the information which is supposed to required in months to come, so as to make the transition of our businesses into the proposed GST regime much smoother and happier.
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This article includes general information about legal issues and developments in the proposed law of GST in India. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances.
We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this article to the fullest extent permitted by law. Do not act or refrain from acting upon this information without seeking professional legal counsel.
Do you think CBDT should extend Tax Audit Report and relevant ITR Due Date? Please Comment, Vote, Retweet and Like.— Tax Guru (@taxguru_in) September 18, 2018