The GST has been rolled out on 1st July, 2017, and this will require every business to comply with the new rules. As businesses transition to the new regime, they may invariably face a few teething issues. Here are some of the key issues that businesses should take care of, for smoothly migrating to the GST regime.
Checklist for ensuring that businesses are GST-ready:
- Updating of accounting entries/notes
- Update the accounting software
- Provision for staff to reconcile/follow-up with vendors
- State-wise return filing mechanism
- Product pricing review, if there is an impact of GST on total cost
- GST-ready invoice format
- New serial numbering for invoices
- Finalizing 30th June closing stock, for the purpose of input credit
- GSTIN of all suppliers taken
- GSTIN of customers
- HSN code identified and updated in the system
FAQs on migrating to the GST regime
Q. Should both, IGST and CGST be charged?
A. IGST has to be charged on inter-state transactions, while CGST/SGST has to be charged on intra-state transactions.
Q. What is my HSN code?
A. HSN code is the unique code for the products you are doing business in. Each product has a HSN code. You can check the HSN code for your business on: http://www.cbec.gov.in/htdocs-cbec/gst/index
Q. How will I get the input tax credit?
A.The bills for the goods or services that you procure, will have a GSTIN number of the supplier and the tax charged on it. Based on the GSTIN of the supplier, you will be able to track your input tax credit on the respective bills of each supplier.
Q. Do I need to sign all the invoices?
A. Yes, you need to sign all the invoices. However, you do not need to e-sign all the invoices.
Q. What about my previous credit for VAT and service tax?
A.You will be able to carry forward your input credit for VAT and service tax, when filing the last VAT return or service tax return. You can also claim the credit by filing the form TRANS 1.
Q. When should I file my service tax return for April-June 2017?
A. You need to file the GST return by 15th Aug, 2017.
Q. I was eligible for service tax but I do not want to enroll for GST, as I am below the taxable turnover limit. What should I do?
A. You can cancel your registration within 90 days under the GST.
Q. How many returns do I need to file and when?
A. Every business needs to file 3 monthly returns:
- GSTR 1 for sales details for the month – by the 10th of every month.
- GSTR 2 for sales details for the month – by the 15th of every month.
- GSTR 3 for sales details for the month – by the 20th of every month.
For the month of July and August, the government has relaxed the due date for filing the GSTR 1 and 2, to the 5th of September and 10th of September, respectively.
However, all businesses need to file a summary form, GSTR 3B, for the month of July 2017 and August 2017, by the 20th of August and September, respectively.
GST is not just a tax change. It is a new way of doing business. It will smoothen business processes across India, due to the abolition of several taxes. However, businesses need to work closely with customers, suppliers and accountants, to ensure that they are complying with the GST’s rules and regulations. This requires a change in mindset and the adoption of technology, for the benefit of the business.