Filing of Last Return in Current Tax Regime & First Return in GST Regime
Filing of Last Return in Current Tax Regime
Filing of the last return in the current tax regime is the last chance to make good the old problems/decide on difficult issues and start afresh. Based on the GST impact assessment with complete health check of compliances for the last 1 year must be done and the same must be given effect to in the last return. Missed credits, doubtful credits, credits reversed to buy peace etc. can now be availed in the last return with proper intimation to the department. Transactions overlapping between the two regimes must be clearly understood and correct legal effect must be given in the old returns. Transactions which can be closed profitably prior to GST could be closed. Once the old returns are filed and the time limit of its revision expires then the chance of making changes is less and only cash refunds under the earlier law would be the only option. Disputed refunds for credit accumulation could lapse.
Filing of First Return in GST Regime
The filing of the first return in the GST regime would also be a challenge. Understanding the first return and implementing its filing in a correct manner in a first go shall be a daunting task. However, if not done properly, then it could lead to issues continuing even post-implementation. Details As per Section 35 of Revised GST (First Return under GST Model Law) Every registered taxable person who has made outward supplies in the period between the date on which he became liable to registration till the date on which registration has been granted shall declare the same in the first return filed by him after grant of registration. Dealing with Unorganised Vendors/ Customers- Can be Obstacle in Smooth Transition Constant communication with the vendors/ customers and their support is very crucial in smooth transition. Carrying along the un-organised vendors into the GST regime is a risky affair. Many aspects of the GST regime such as matching concept, compliances etc. would ensure that customers would not like to take any risk leading to cash flow issues for the vendor. The task of the vendor evaluation/assessment and their preparedness for the GST is important. It must be assessed well in advance during the transitional phase so that the loose link the chain is not carried along to the GST regime. Vendors who understand can pass on the benefit and ensure that the intermediate supplier is not out of pocket when the customer reduces the prices. Nature and Extent up to Which ERP System must be Tweaked Needs of the businesses from ERP could undergo a change in the GST regime. The decision on the nature and extent of the tweaking to the ERP that is required to be done to continue post GST would be the first challenge. It shall be challenging for the businesses to decide whether to totally migrate into the new ERP or to completely overhaul the existing ERPs or to list out the various reports, formats, fields that needs to be changed in the existing ERP. Various factors that may help in determining the same could be: Efficiency of current package, size of business, time for transition to new ERP, time left for GST, support from the ERP vendor, etc. Based on these factors, businesses must take a decision as to which immediate changes in the ERP must be done to ensure a smooth flow of operations in the GST with reduced manual efforts on compliance. Performing GST Impact Analysis During transition one of the important tasks would be to understand how GST is going to impact your business. Therefore, for that purpose larger businesses need to do the GST impact study and analyse the impact. Further, impact assessment helps in channelising the transitional efforts in the right areas. Various aspects that needs to be considered in the process of impact analysis are:
Understand self-business first- As-is mapping of the business transactionsPerform minimum past one year sanity checkCredit Maximisation, Review of present credits and compliancePerforming various ratio analysis to understand the business and its GST impactAssess detailed impact on business, individual business transactions and impact on various business departments.Proactively mitigate the risks of the negative impact. Enhance the positive impact.Implementation not restricted to Finance and Accounts department. readiness and learning equally required by procurement, production, stores, sales and marketing, IT, Admin and HR departments also.Businesses acting early on the GST impact to have edge over competitors.
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