GST AUDIT - Why and How.

Ready for a GST Audit

 

The introduction of GST has given Indian Tax Department greater focus and more resources to regulate indirect taxes in India. While businesses have spent a significant amount of time to get ready for GST, it is important to not lose sight of Government’s primary focus to simplify the complex tax structure and implement the new tax regime to the success. Whilst taxation laws have allowed a self-assessment regime for the disclosing and payment of duties and taxes, it is always on the basis that such disclosures may be reviewed and audited at a later date. As there is an increased focus on regulation and enforcement due to GST, we have seen increased audit activity, and the general experience has been businesses have under-emphasized this indirect tax risk (including historical sales and service tax liabilities). Failure to comply with Laws requirements can result in significant penalties, loss of reputation and greater scrutiny in future. It is important for businesses to not lose sight of this important area.

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Understand your structure

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It is important that the entity understands the basis on which it is registered for GST and that the treatment of the transactions is consistent with that structure.

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Things to consider will include:

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• assessing the applicable laws and rules specific to the entity.

• Understanding the impact of such laws and regulation.

• manner of recording transaction and updating of books.

• Other ancillary impact of transactions.

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Documentation to support claims for GST paid

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There are certain requirements in relation to tax invoices that must be satisfied before an organisation is eligible to claim back the GST paid/incurred. For example, the tax invoice must have specified information in order for it to be a valid tax invoice. 

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So its necessary to make sure that we document our transaction and business to support all our credit/payment claims.

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ARE YOU GST READY?

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GST will affect every part of your business in India with regards to cash flow, costing of capital, pricing of products and services, financial reporting, tax accounting, compliance processes, supply chain, procurement and contracts and all technology currently enabling this ecosystem. In addition, there will be significant training needs for personnel to understand and operate effectively under this new regime.

"The current delay in introduction of GST is a blessing in disguise, as it will give some more time to corporate to prepare,"

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HOW CAN WE HELP YOU!!

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Termed as the biggest tax reform since independence, it is crucial to understand that GST is not merely a tax change but a business change which is likely to impact various business areas such as Finance, IT, Supply Chain, HR, Marketing etc. On one side there could be a huge impact on the supply chain, and on the other there may be a requirement for redeploying people and different advisors as the three taxes (Excise, Service tax and VAT) would merge into one single tax.

Needless to worry! We are there to assist you in the best possible way..

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1. ADVISORY

• Rate of tax

• Time & place of supply

• Treatment of current incentives

• Valuations

 

2. IMPACT ASSESSMENT – INDIRECT TAXES

Impact of existing and proposed GST on -

• Costing

• Pricing and working capital

• Availability of credit of GST

• Revenue & Procurement stream

 

3. ACCOUNTING AND REPORTING

• Tax credits

• Payments

• Accounting

• Change assessment in accounting entries

• Risks & controls

 

4. TECHNOLOGY UPGRADATION

• System changes – ERP, EI tools, other technology tools

• Compliance – with GSTN requirements

• Getting systems ready for audit

• Automation

 

5. COMPLIANCES

• GST registrations

• Tax credit transitions

• Return reporting

• Other statutory compliances

• Managed/ Shared Services

 

6. MANAGEMENT TRAINING & DEVELOPMENT

• Enabling business engagement

• Facilitating business readiness

• Training the executives and finance officers.

 

 

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