BIZ LAW:NEGOTIATING THE TRANSITORY PANGS
With 40-odd days to go for businesses to be GST-ready, experts share insights on the do’s and don't in the new tax regime
Keep in mind GST registration is the first step to migrate to the new regime Registration becomes effective from the date of application if applied within 30 days when the person becomes liable for registration Every person holding registration under existing law shall be liable to be registered under GST Businesses having multiple units in a SEZ in one state or Union territory can obtain a single registration for all the units again that GST would be beneficial for businesses, timely planning and preparation would help manage the change optimally. Businesses that have not yet completed the enrolment for migration to GST must complete the enrolment process when the GST common portal reopens on June 1. Businesses must make necessary technology upgradation, such as revising the particulars of invoice, updating vendor master list with GST registration number of suppliers, GST return formats, registers etc to facilitate state-wise compliances. SALONI ROY Senior director, Deloitte Haskins & Sells Keep in mind Timely planning would help manage the change optimally Revise the particulars of invoice, update the vendor master list with GST registration number of suppliers, GST return formats, registers to facilitate state-wise compliances Testing of the new systems would also be crucial prior to going live respect to payment of taxes and filing of returns can lead to denial of credit to recipients of such supplies. No input tax credits are available for payments made in advance and businesses may have to match timing of delivery of goods and services with payments for the same to balance their books. Even though input credit will be reversed for those who do not make payments within three months, this does not prevent the eventual upheaval of cash flows for many.
Since input credits will be available only for goods and services used “in the furtherance of business”, establishments will have to take pains to bifurcate input services received for business purposes and those received otherwise. Similarly, where input supplies are utilised for both taxable as well as exempt supplies, credit will be available only for services utilised in taxable supplies. Input credits on capital goods shall not be provided where depreciation has been claimed on the tax components.
With the set-off of input credit being a pivotal element under GST, it will be in the best interest of businesses to understand these provisions in detail. Keep in mind >Those who do not file timely returns in specified formats will have to forgo input tax credits >No input tax credits are available for payments made in advance of supplies >Input credits are available only for goods and services used “in the furtherance of business” establishments