Impact of GST on Three Major Sectors with Possible Actions

GST (Goods and Service Tax) is one of the biggest tax reforms since Independence in India and it is going to roll- out from 1st July. Several businesses and industries are not readily prepared for the new GST taxation regime. As there will be the nation wide impact of upcoming GST, there will be three important and remarkable areas where the GST will be operational heavily and as a result will make waves across others sectors too. here we have researched and studies those three areas where GST will impact and also included possible actions which these sectors can take for better reformation. The impact of GST Regime in different stakeholders along with necessary action points are mentioned below:-

The Impact of GST Regime in Business:-

• Sales, operation planning (S&OP), procurements, supply chain affect the business
• Contract with vendors, customers product pricing and discount management gets affected
• Cash Flow Management and Working Capital
• Structure of the organisation

Steps which can be taken:-

• Supply Chain and Procurement process should be revised in the business
• Rectification or correction in customer contracts and vendor
• Negotiate with the suppliers to reduce the price
• Communicate with customer and circulate vendor
• Revise the price of goods or services, you are supplying

Read Also: Goods and Services Tax Impact on Your Business

Impact of GST on Tax

• Credit Availability, reconciliation of credit mismatch
• Invoicing process and accounting effect with GST Regime
• Mechanism and periodicity of filing returns
• Balancing returns with financial statements
• Training of relevant stakeholders/ employees
• Impact on compliances which include State-specific registrations
• Balancing returns along with financial statements – Accounts Receivable, Accounts Payable and Cash Management

Steps which can be taken:-

• Government must revise the taxation rates, classification of goods and tax positions
• It is necessary to implement changes in accounting and invoicing processes
• Aware people about GST Migration and fresh registration
• Preparation of compliance manually as per the GST compliance requirements
• It is necessary to revise evaluation of good and services
• Input tax credit availability along with credit tracking and eligibility

Impact of GST in Technology

• Credit register formats
• Must revise check the inventory levels changes in warehouse management
• For smooth functioning in GST Regime adopt IT – enabled tools to manage compliances
• Invoice formats
• It is essential to implement Enterprise Resource Planning (ERP)system to improve taxation structure- Vendor, customer, price and tax matters

Steps which can be taken:-

• Review the changes implement in the IT System which includes state wise invoices mentioned in prescribed particulars
• Tax Codes and GL Codes
• Goods or service based GST rates which include HSN/ SAC codes on the obtaining as well as output side before the testing of IT systems i.e., GSTIN “Go Live“
• Additional fields such as GSTIN of supplier and recipient, Place of supply/ taxes must be added while recording transactions