GST

After many delays and missed deadlines, India is finally set to embrace Goods and Services Tax (‘GST’) from 1 July 2017. GST is perhaps the most significant and complex tax reform ever undertaken in the history of independent India.

GST being a transaction tax which subsumes most of the existing Indirect taxes levied by the Centre and States, may require significant realignment of operations including supply chain and logistics, pricing, procurements, accounting and Information Technology (‘IT’) Systems.

Further, a reform of this magnitude may take time to settle and the legislative process would entail frequent amendment in the law, procedures and tax rates. This would require businesses to continuously adjust to the additional requirements thrown up by such amendments.

Our advisory services on GST include;

Assessing the fiscal impact of GST on business and product pricing, through evaluation of key parameters including:

1. Change in tax rates;
2. Change in Time and Place of supply rules for goods or services or both;
3. Evaluating impact on outward supplies including goods and services;
4. Analyzing impact on procurement of inputs / input services;
5. Valuation mechanism under GST, including incidence on free of costs supplies, stock transfers, discounts, incidental supplies and supplies to related parties;
6. Analyzing position on availability of input tax credits – credit restrictions or additional tax credits on procurements of goods and services; and,

Basis the above parameters, assessing the Impact of GST on Company’s operations, select products and working capital.

Advise on realigning the operations to ensure tax efficiency:

• Identifying alternate business models to ensure tax efficiencies and credit-optimization;
• Evaluation of the alternate business models identified basis the tax costs involved;
• Identify potential risks and suggest suitable mitigating strategies, associated with the identified models; and,
• Define the business model / contractual scenarios after discussions with the Management that could be taken up for implementation.