Central Government appreciated the role of Cost Accountant in the era of Economic reform to GST. In accordance with GST Act, role of cost accountant has been given in various Sections of rules:
Role of CMAs in GST (Goods and Services Tax) in India
Role of Cost Accountant:
GST has been touted as the ‘single most important tax reform after 1947’by the Hon’ble Finance Minister, Mr. Arun Jaitley. The entire framework of indirect taxation will change ranging from the nature of levy, rate of taxes and administration of the taxes. Introduction of GST should rationalize the tax content in product price, enhance the ability of business entities to compete globally, and possibly trickle down to benefit the ultimate consumer. GST will have a crippling effect on the prices of all the goods and services in India. Amid this huge impact, lies an enormous opportunity for the Cost accountant. Here’s an opportunity for the tax professionals to foresee an opportunity, get acclimatized and be well equipped at the right time. The role of a cost accounting post GST has been underlined by various provisions made in CGST/ SGST law as well as various rules. Summary of such provisions has been reproduced below.
Business Advisory services:
Managing a business in today’s world is very complex and presents many confrontations to the corporate houses. CMAs are qualified, proficient and knowledgeable professionals, who can interpret the proposed GST law and may provide required guidance and advisory services to eradicate bottlenecks in finance, production, taxation, administration, supply chain management, etc.GST would require proper record keeping and accounting. Systematic records of credit of input/output service and its proper utilization is necessary for the success of GST. CMAs are well equipped to perform such tasks too. Assessing impact on business with the introduction of GST, crafting business plans in the changed environment, Contract review for Cost Reduction /Price Revisions, transaction Structuring by mapping existing business model. Providing Opinion and other advisory services w.r.t. application of various provisions of law like Input tax Credit, Valuation, assessment of taxability, determining place of supply, maintenance of records, consultancy w.r.t. inter-state supply etc. With a new law, comes a new set of tax / procedural issues and hence the professionals also need to evolve and devise new tax planning strategies. As an advisory carve out strategies to avoid the bottlenecks. Any planning which mitigates tax cost would be most appreciated by clients.
GST – Procedural Compliances:
Providing support in obtaining registration, making amendment in registration, providing support in maintenance of accounts & records, assisting in payment of tax, providing support in filing of returns. The effective management of indirect taxes is crucial in today’s global market place. Indirect taxes must be actively managed throughout the business if they are to work with the framed strategic agenda. Like present tax law, taxpayer would be required to do GST Registration, Return Filing, Tax Payment, Tax Assessment, etc. under the proposed GST law. A CMA is well equipped to assist the business entities in providing assistance towards GST Registration, Claiming tax credits, ensuring all the necessary legal compliances, procedural formalities and other administrative follow ups.
Transitional Partner
There would be numerous transitional issues going into the new law such as treatment of existing stock and credit issues. Services will also be required in preparing Standard Operating Process (‘SOP’) for businesses under the new regime. Review of existing cenvat credit and set -off balances to be carried forward, analysis of inventory lying at different locations on the implementation day, Cenvat Refund /VAT Refund /Rebates /Drawbacks already filed or to be filed, projects in hand /WIP – normal business model and works contract model, audit under Old Regime & New Regime, de -registration, registration & Compliances under existing Laws, Pending adjudications &litigations.
Representations under Dispute resolution post GST:
In GST regime, there could be various disparities between the Centre and the States on account of various issues with reference to cross-border transactions, issues arise in respect of levy and administering of Destination State’s share of revenue, dealing with inter-state movement of goods and services. Hence, for the resolution of the various issues in GST regime, there is a need to have dispute settlement mechanism in order to have smooth flow of structure. CMAs are recognized to make representations before the Appellate Tribunals under the Indirect Taxation statutes in India. They would continue to represent even in post-implementation of GST for Dispute Resolution.
Audit & Assurance
Various audit functions can be undertaken post GST like review of record & procedural aspects, suggesting changes in registrations, verification of returns, reconciliation between submissions to various authorities, analysis of benefits & incentives, statutory compliances & audit, Internal Audit & System improvement.
Systems Audit and systems development to be GST compliant:
A systems audit involves a detailed analysis and evaluation of a complete system, often the accounts payable or accounts receivable system. There would be a sea-change required in the ERP or Accounting systems established. Those systems are to be made GST-compliant. CMAs would be the facilitator to conduct the systems audit rigorously and guide in systems development.
Accounting and IT infrastructure
Today’s businesses involve rampant use of software (ERP, SAP, Tally) both by the industry and service providing tax professionals. With the advent of GST, drastic revamping of existing IT infrastructure would be required. Further, the entire current accounting codes / treatment may undergo a change under the new legislation. With the knowledge of GST, cost accountant would be best suited to aid technicians in designing the software modules.
Training
Introduction of GST will lead to rise in training requirements– (a) for the industry (b) for tax professionals. A three-fold training structure can be adopted i.e. training to (1) top management of firms / business owners, (2) process owners and (3) taxation / accounting team. Training would be required in first educating the business owners and higher management on the likely impact of GST on their business and thereafter updating the company personnel with nuances of GST along with regular update sessions. The new law- new GST era opens numerous opportunities to cost accountant in the field of indirect taxation. To seize the opportunity, one needs to be well prepared and ready.
GST ScopeGST ReturnGST FormsGST RateGST RegistrationWhat is GST?GST Invoice FormatGST Composition SchemeHSN CodeGST LoginGST RulesGST StatusTrack GST ARNTime of Supply
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