GST came into effect from July 1st, 2017 and all companies across India had to implement GST and integrate their systems to be GST compliant. It is important to check which of the taxes on the Goods you want to trade or are trading in India falls under list for the GST – OR Sales and Excise Taxes will still be levied on those products. Some goods are not covered by GST, thus as mentioned above, taxes for services will change. Key business impacts were in the areas of:
- Sourcing: Inter-state buying could prove feasible and may open opportunities to consolidate suppliers and vendors
- Distribution: Changes in tax system could change in procurement and distribution, network structures and product flows may need reviewing as current arrangements for distribution of your finished goods may not be optimal with the removal of the concept of excise duty on manufacturing
- Cash flow: The removal of Excise Duty on manufacturing can result in improving cash flow and inventory cost
- Pricing & profitability: Tax savings resulting from the GST structure will require new pricing of products
- System changes and transaction management: Many systems and processes will need to change to make the optimal transition to GST – and these will require training for employees, checks to ensure compliance under GST, customer education, and tracking of inventory credit to ensure everything goes smoothly; supply chain reports need to be reviewed and existing open transactions and balances as on the cut-off date need to be migrated out to ensure smooth transition to GST
M+V Financial Experts manage Accounting & Taxation of many foreign companies in different industries in India. We have also successfully integrated their systems to be GST ready.
Have you implemented GST successfully in India? If not, let our experts help you in three easy steps with the M+V GST Tool.