Transitioning to GST for

Infor ERP LN Clients

Corporate Presentation

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 Progress so far and road ahead

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 Progress so far and the road ahead
GST Council (a body of Centre & State Governments) constituted on 15 September 2016, responsible for finalizing law and taking key
decisions like, threshold, tax rate, exemptions etc.

9 Rounds of discussion of GST Council held so far and various issues relating to GST, including broad contours of the GST rate structure,
threshold exemption, parameters for composition scheme, compensation to States due to implementation of GST, details on draft model GST
law, IGST law, Compensation Law and administrative mechanism for GST has been decided upon.

Threshold limit for paying tax under the GST regime fixed as follows:
INR 20 lacs for all States except for the North-Eastern States
INR 10 Lacs for the North-Eastern States

5 sets of draft GST Rules governing registrations, invoices, payments, returns, refunds released Principally approved by the GST
Council

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 Progress so far and the road ahead
GST Council have received a consensus for a 5 tier GST rate structure, which is as under:

0% - GST Council at present decided upon exemption for apprx. 80 items (goods/services) only
5%, 12 and 18%
Higher rate of 28% and an additional cess (Higher Rate of GST capped in both CGST/SGST, IGST Act in the Revised Draft)
For services, the rate would be 12% to 18%

GST is now a reality. It is one of the worlds biggest tax reforms in one of the worlds largest
economies. Once implemented, GST will have a deep impact on our economy. New business models
Supply chain models will emerge. Companies prepared for GST will reap profits.

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 Proposed Framework

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 GST Framework
Coverage All Goods and Services are covered except few exceptions

Taxes Subsumed Major existing Indirect Taxes proposed to be subsumed

GST Levy and rate Dual GST (CGST + SGST)

Inter State Transactions Integrated Goods and Services Tax (IGST)

Supply of Goods and Services, including stock transfers

Taxable Event & Exemptions
Existing exemption scheme proposed to be converted into refunds

Credit Utilization Full credits available, except cross credits between CGST and SGST

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 Registration Number Format
The format of the registration number is clearly mentioned in the Business process
document, and registration number in GST is known as GSTIN.
It is a 15-digit unique registration number
Same registration number is shared between the state and central government
Same registration number is applicable for the taxes under GST
Registration number is based on states
Taxpayer can opt for different registration numbers based on line of business in the same
state as per AS 17
The 14th digit is a being reserved by the GSTN for the future use, and the 15th digit is the
check digit.
Data Structure of GSTIN

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 Taxes to be subsumed


Indirect taxes to be subsumed

Coverage

Indirect taxes to be continued

*Central Sales tax intended to be phased out and additional tax @1% was initially proposed to be
imposed on inter state supply of goods. But now, the same has been withdrawn

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 Indirect taxes to be subsumed

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 Indirect taxes to be continued

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 GST: Tax Set-off Methodology

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 Potential Impact of GST

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 Twin impact Transactional and Business
Local purchases
Interstate purchases
Import of goods Cash flow
Procurement of services, including import
of services

Marketing

Inbound transactions

Outbound transactions
GST impact Areas IT systems

Accounting

Sale of goods
Exports
Business processes

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 Current tax regime & GST impact
Outside India India State A State B

Customer

Service Dual GST

Dual GST provider Sales*
(Excise Duty)
Services (VAT)
BCD (Service tax) 5
IGST
4 Stock transfer
Import of goods (Excise duty
Import of Goods No CST; Partial ITC reversal)
(BCD - Cost)
1 WAREHOUSE
(CVD & SAD) 6
9 Factory / Unit IGST
credit reversal
Export of goods
No tax Sales*
2 7 (VAT)
Likely to Inter-state purchases
Dual GST
continue as zero- (Excise duty) 3
rated (CST - Cost) Sales
8 Customer
Local purchases (Excise duty)*
IGST (Excise duty) (CST - Cost)
(VAT)
IGST
Customer
Dual GST
Inter-State
Supplier Local Supplier

* Credit of Excise duty and VAT in the hands of Customer depends on the Customers tax profile

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 Impact on IT systems

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 Business Challenges
Transition of New Regime
Changes in Business Practice
Tax Credit Booking
Transfer of Input Credit to New Regime
Tax Invoice Generation
Generation of Tax Returns
Reconciliation of Input Tax Credit
Reconciliation of Tax Returns
Profit & Loss Statement in respect of Individual GST
Registration Code

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 Impact on IT System
Revised tax rates & commodity codes (as made applicable under
New registration numbers of customers and vendors
GST) to be mapped against each product/ services based on HSN
(allotted under GST regime) to be captured in the system for
and CPC
PAN India operations
Vendor/ Rate/ commodity
customer Master Master
Logic changes In build changes in system for Changes in statutory records to be maintained under GST
recording input credit on imports, stock transfer and Records & like purchase/ sale registers, vendor records, invoices, stock
In-build Logics
input services Reports transfer notes, etc.

Check if ERP system is capable of GST GST Note GSTN Interface

Implement
upgrade Provision for interface with GST Network for uploading
invoices, reconciliation and filing of GST Returns

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 GST Solution Implementation Steps
Create clone server of Present Production Server
Upload all latest solutions / patches
Upload GST Solutions
Run & Validate Standard Implemented Business Cycle
Bug Identification and seek solution from Infor
Run & Validate Customized Implemented Business Cycle
Retrofitting of All Customization
Training and User Acceptance Test
Opening Input Tax Balances / Orders Preparation
Go Live
Support during First month end closing and GSTR Filing
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 Value Added Services from MSL
Support during First month end closing and GSTR Filing
Profit & Loss Statement in respect of Individual GST
Registration Code
Tax Invoice Formatting
GSTR Reporting
Tax Return Data Uploading in GST Portal
Work Flow and Alert for Compliance

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 Impact on Compliances

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 Compliances under GST
1. State wise registrations

2. Returns under GST

GSTR 1 Outward Supplies made by Taxpayer (By 10th of subsequent month)

GSTR 2 Inward Supplies received by Taxpayer (By 15th of subsequent month)
GSTR 3 Monthly return by Taxpayer (By 20th of subsequent month)
GSTR 6 Monthly return for ISD (By 13th of subsequent month)
GSTR 7 Monthly return for Tax Deducted at Source (By 10th of subsequent month)
GSTR 9 Annual return (By 30th December of subsequent year)

3. Assessments and Audits 4. Records

Assessment (Best judgment, Summary) Electronic Credit Registers
Mandatory Audit by Chartered Accountant Record of input, output, production, stock, input tax credits etc.
Audit by Tax Authorities
Special Audit

Increased compliances under GST However, uniformity across country!

Credit Matching Likely to be time consuming Need to design standard processes

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 Tax Reconciliation

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 Thank you

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Merino Services Ltd. 70, KLJ Complex, Motinagar, New Delhi 110015, India

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