Deloitte India : Post GST implementation review

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Post GST implementation review December 2017

Companies have implemented Goods and Services Tax from 1 July 2017 independently or with some support from outside. However, it is important to ensure that the envisaged plan has been implemented well. Key determinant would be to see whether the implementation has percolated seamlessly down the entire organization.

Has the implementation been per plan/ design?

Are there any gaps still to be bridged from a transaction/ process perspective?

Post-GST implementation review Determining where you stand

GST Dipstick Review

Is the GST implementation plan executed well?

Are all the process changes working effectively?

Are the tax positions very conservative or very aggressive?

GST Tax Positions Review

The Deloitte Post-GST implementation review will help organizations evaluate effective implementation of GST plan. Issues in various processes, tax positions, and associated risks, etc. would be highlighted along with a way forward.

Certain common challenges that organizations face postGST implementation: Tax positions

Transition

• Gaps in process designed vs process implemented • Transactions mapped does not cover transactions in entirety • Crucial transactions not being tested for effectiveness • No SOPs designed for transactions under various business processes like: -- Appropriate GL creation and accounting -- Purchase and sales return -- Shortage/Excess of Goods -- Dealer incentives and schemes -- Supplementary invoices and Debit/Credit Notes -- Reconciliation of credits

• In adequate communication of tax positions across entire organisation especially to nonfinance functions • Either over conservative or over aggressive tax positions adopted especially on certain transactions which have alternative views like -- High Sea Sales and its implications -- Employee recoveries and taxability -- FOC and Sample Sales -- Cross Charge vs ISD -- Common credit reversals -- Composite supply Vs. Mixed Supply

• Readiness for audits of transitional return • Smooth transitioning into GST by ensuring applicability of transitional provisions and filing of transitional returns

Compliances • Dilemma over manner of handling compliances e.g. whether centralised or decentralised or through shared service/outsourcing/ creating centre of excellence, etc.

• Challenges on people and process realignment • Challenges in generating adequate and accurate reports and extraction of data for GST compliances leading to considerable manual involvement

Tax positions review Includes a review of the tax positions taken by your Company and its implementation

Pricing • No clear strategy around overall approach for Antiprofiteering and manner in which to pass on the benefit e.g. method of allocation between various products, SKUs, market, customer segment, of common benefits, etc.

• In adequate communications in the supply chain like, customers, OE’s, dealers etc • Lack of compliance/ backup support to substantiate the price revisions •

GST In-depth Review

Processes

Process review Contains in-depth review from a GST perspective, of one or multiple processes, highlights risk areas, and suggests a way forward

GST Process Review

Are users trained to cope with all types of transactions in GST?

Are we adequately safeguarded against anti-profiteering provisions?

Dipstick review Involves high level review of business operations post GST implementation and highlights key areas, risks, and concerns

Features • Customized approach to suit specific requirements • Third party perspective • Industry insights

In-depth review Comprises a detailed review of processes, tax positions, compliances, documents, etc. and advise on the way forward

Benefits • Quick turnaround of issues • Enables timely corrective actions • Reviews tax positions • Updates management on the effectiveness of GST implementation