4 Steps to get your business GST ready
Is your business GST ready? It is accepted that GST is not merely a tax change but business change. GST will impact in all functional areas of an organisation such as Finance, Product Pricing, Supply Chain, Information Technology, Contracts, Commercial etc. Thus, it is very important that all these functional teams are well aware of GST.
However, the underlying question is how an organisation will gear up their business. These are a few steps an organisation could follow to enable their business to get GST ready:Step1: Sensitise the Business System:
Organisations should make sure all their departments are aware of GST and the changes that will have an impact on their business. While there is a lot of information out there, it’s important to identify what is important to read or refer to. Key aspects of GST regime are available in public domain:
Organisations can sensitise its employees based on above documents available in public domain. Organisations can also sensitise its entire system which includes, vendors and customers as well. An early training to the employees, customer and vendor will give them the sense of involvement in discussion much before the GST legislation is in place.Step 2: Understand GST’s Impact on Operations:
GST may provide opportunities, but at the same time it may bring in threats. Given this, organisations should do the impact analysis for all its operations and an idea of how its operations will be impacted due to GST.
All departments such as Finance, Supply Chain, Product Pricing, Human Resources should be involved in giving their inputs and suggestions. Organisations should also think about the tax compliance. For example, currently Service tax assesses file two returns annually. In the GST regime, this assesse could be required to file 61 returns (5 returns per month, plus one Annual return). A simple impact analysis would have thrown up this fact and would flag the Human Resource department to inform and educate the effected people.Step 3: Transition in Information and Technology system:
IT is a key enabler in this process. When, GST is introduced, if nothing else, the IT systems should be ready and running or else business will come to a standstill.
For service providers, it is going to be a challenge to apply CGST and SGST or IGST, as it will depend on place of supply rules (whether it is Inter State or Intra State). Thus, providing a Place of Supply Rules in your IT systems can impose a major challenge. To avoid the disruption of business, it is advisable to do an early study to understand how the migration can be done for GST.Step 4: Design Business Strategy
To gear up for GST, organisations may need to identify an alternate business strategy to ensure smooth transition. As India becomes a common market, there may not be any extra cost involved in Inter State procurement vis-a-vis Intra state procurement, hence the supply chain strategy may undergo a major change. Organisations may re-visit their pricing strategy as competitors may reduce their price to pass on the GST benefits.
We at SAGlobal, have vast knowledge and implementation experience of Microsoft Dynamics ERP in Global taxation projects across the world. For more details on GST implementation for your business, please:
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About the Author
Ritwik Bhattacharyya is Assistant Manager Projects for SAGlobal, where he manages the Implementation and development projects for Microsoft Dynamics 365. Ritwik has over 15 years of ERP experience with 12 years in Microsoft Dynamics. Ritwik has worked extensively on the development of Indian localization in Microsoft Dynamics 365 in AX v3.0 onwards. Currently he is working closely on the developments of GST in Dynamics 365.