With the GST expected to become effective from July 1, SMEs and supply-chain management executives debated on its finer clauses at FICCI symposium held at the Hyatt Regency yesterday.
With the Goods and Services Tax (GST) expected to become effective from July 1, SMEs and supply-chain management executives debated on its finer clauses at the Federation of Indian Chambers of Commerce and Industry (FICCI) symposium held at the Hyatt Regency yesterday.
In an interactive session titled “GST-Transition and the Way Forward”, jointly hosted by the FICCI and KPMG, Sanjay Mahendru, Commissioner Service–I Mumbai, and KPMG partner for GST Sachin Menon, fielded questions regarding the multifarious scenarios on availing tax credit before and after the transitional period. They mentioned relevant clauses for further clarification.
Mahendru said that the stabilisation of the return module in the new system is necessary for the new tax regime to work. It is based on the GST-N—an online portal that will be the new database of all sales and purchases, minimising the interactions between the transactions and the tax collector.
The matching of these records on a case-to-case basis ultimately decides the final tax levied and the subsequent returns that can be availed. Menon also mentioned an anti-profiteering clause, which passed on the benefits of any extra tax credit to the consumer.
Mahendru said that compliance of all the stakeholders was of the utmost importance for the ease of doing business under the new regime.
Menon, in a talk entitled “GST Key Transitional/Implementation Issues” directed the audience towards the relevant clauses for securing warehouse-inventory-related tax credits for a smoother regime transition. Invoices on excise duties are the key, which would secure full credit post the GST regime, else the maximum credit one can avail is around 40 percent.
Invoices on excise duties are key, which would secure full credit post the GST regime, else, the maximum credit that one can avail is around 40 percent.
Menon also mentioned key points and strategies for the return of goods sent on the sale of approval, price revisions, for securing tax credit on goods in transit, and refund claims, clearly stating the ultimatums for the ease of transition.
Menon summarised that in the light of this information, it is in the best interest of all taxpayers to start planning their inventories, carry out changes in the IT system, calibrate their accounting towards new tax treatments and GST rates and finally, negotiate with the vendors to factor the tax benefits in the procurement prices.
He also mandated updating the required “master” codes for the GST-N, sorting out the required documents, forms and stationery and raking in the right people in their chains who can competently understand the GST to smoothen the transition.Mahendru also mentioned that a set of Frequently Asked Questions (FAQ) were set to be released shortly.