GST to be ready in five important steps
In the following possible steps, the organisation could move to the GST
Sensitize the Business eco system:
It’s not merely about a tax change, but it’s totally a business change. It almost changes all the functionalities of an organisation such as finance, product pricing, information technology, supply chain, contracts, commercials etc. Here to note that whether the functional teams in the organisations are aware of the GST. It is essential to note down the key aspects of the GST through the public domain so that they better gain the knowledge for their business.
Sensitizing the business not only mean to educate the team members but also its mandate to provide the proper awareness to the vendors Such as tier1, tier2 etc. and also the key customers. The training needs to be provided for the employees, vendors and the customers. The initiative training will give a kind of involvement in the process of GST before it comes to the public domain.
Understand the GST impact on operations:
GST may have opportunities but it also could bring threats. An organisation may carry out an exercise to identify how the operations will be impacted because of GST. In order to analyse the GST impacts, the exercise can be carried out in a way that the respective personnel from the different streams such as supply chain, finance, product pricing, and human resources should be involved to provide the inputs and the valuable suggestions.
With the step ahead, the organisation itself can identify the possible cost savings which key suppliers and vendors could be entitled in the GST regime. Based on the cost savings to suppliers and the vendors, the company can have discussion with them in order to pass the benefits by reducing the cost in the coming years. Early discussion and engaging with the customers and the vendors will do have so many benefits for the organisation.
Gear up for transition of Information Technology System:
Information technology is the key area for business organisation. Irrespective of the fact whether the organisation is ready or not, the very first day when the GST got introduced, the information system needs to be ready and running otherwise it brings the business systems to standstill.
For instance, if you take a multistate retailer, his IT system will generate the invoice or bills with applicable CST and VAT. In GST, the system will generate the applicable CGST, SGST or IGST and additional 1% tax if needed. For being a service provider, there might be so many challenges regarding CGST, IGST or SGST will depends on the place of supply rules. It will be going to determine whether the supply is inter-state or intra-state. Thus embedding the place of supply rules in the IT system could pose a major challenge.
In order to avoid the threat and disruption of business, it is advisable to make an early learning about how the migration of GST can be carried out.
Design Alternate Business Strategies:
To start-off with GST regime, it is essential to find the alternative business strategies for smooth transition to GST. In supply chain strategies, it is expected to undergo a major change in the entire India becomes to unified single market where there may not be any tax involved for inter-state vis-à-vis intra-state for procurement of goods. An organisation needs to revise the pricing strategy compares with their competitors and can reduce well to gain the benefits of GST.
While forming alternate business strategies, it is mandate to analyse whether this will go right and commercially feasible before the recommendation for alternative strategy.
Make Representation before the government:
GST regime may affect some of the business sectors negatively. The organisation needs to identify the possible issues with appropriate presentation before the government. In next few days, it may be expected that the government may put the draft GST law in the public domain. Initiation of the GST with the proper steps will surely help the organisation to gain more legal benefits.