Opportunities in GST for Chartered Accountants
Dreams of GST may be true very soon. The bill has been approved in Rajya Sabha by majority on 03.08.2016. GST may be implemented with effect from April 2017. For Chartered Accountants,It is very important to get all updates with the proposed GST law so that they can provide proper advice to their clients AND entities who are working, for transition to GST. For this We have discussed opportunities and should be taken few important steps in this regard.
Opportunities for chartered accountants
Introduction of GST would create in short term, a lot of opportunities for full time practicing chartered Accountants in sales tax and other indirect tax practitioners may find it easier to understand the proposed GST as most of the provisions of GST bill are influenced by service tax / VAT / central excise provisions. Following are few services, which could be added to the service basket of practicing CAs in GST regime which could be of great value to business community:
a) Preliminary GST impact study
The introduction of GST would have immense impact (could be positive or negative) on manufacturing, trading and service industry. manufacturing sector might notice GST’s introduction to be positive as cascading taxes would get reduced and overall tax payment would be less compared gift rate of taxes. For few services, it may well be negative as rate of GST may well be eighteen that is beyond gift service tax rate of 15 August 1945. Therefore, it’s essential for the business entities to induce preliminary GST impact study done to determine the impact on the business. CAs would be apt for providing this service, provided they’re well ready in GST. Presently, model GST law at the side of few reports on refund, payment, registration and returns area unit out there publicly domain that may well be relied on for impact study. The impact study report would need be relooked once different rules and changed GST law is introduced.
b) Assistance in transition stage
After analysis, CAs can assist the business entities in implementation of GST during transition stage . Transition stage could include identification of eligible credits, modification of contracts / agreements, suggestions for modification of ERPs considering GST requirements, training of vendors if required . ERP implementation could well be a separate service as GST would be administered through full automation and manual intervention would be very less.
c) Training for entities for compliance
In Begnin there would be lot of difficulty for business entities for Apply GST in their entity . All important divisions of a business such as marketing, stores, finance and accounts would be in required to understand more on GST as it is a new . Entities will be face lot of difficulties in transition stage . CAs can help the industry during this phase for smooth transition by structuring appropriate training programs.
d) Business consultant
Post implementation of GST, the CAs can act as business consultant considering the Goods & Services Tax law as a whole instead of merely acting as tax consultants. As most of the indirect taxes would be merged in GST, CAs can be well prepared to be overall business consultant. Knowledge of implication under direct tax / international taxation in addition to GST would be of a great use. This could include business structuring / tax advice / guiding on development of standard operating procedure etc.
e) Regular review / compliance assistance of Goods & Services Tax compliance
CAs could take up regular review of compliance for business entities to ensure compliance with respect to tax payments, availment of credits etc. In Goods & Services Tax, compliance would be a key for the assessee for availment of credits, payment of taxes, taking deduction etc. There is a proposal to introduce matching concept wherein the credit for the buyer would be allowed only if taxes are properly reflected by the seller and appropriately paid to department by such seller. For CAs, compliance assistance could be a great opportunity.
f) Mandatory audit by CAs or cost accountants
Section 42 (4) of model Goods & Services Tax law provides for mandatory audit of books of account for all taxable persons on reaching specified turnover. Such audits can be undertaken only by CAs or cost accountants. This is in line with the audits under present VAT laws of most states. Post implementation, the mandatory audits could be taken up by CAs.
g) Dispute avoidance and resolution
Initially there could be lot of disputes in Goods & Services Tax for which the proposed Goods & Services Tax council has to establish a mechanism for resolution. This could create few opportunities to the professionals.
h) Certification of refunds
Refunds are expected be much faster in Goods & Services Tax regime. Around 80% of the refund amount could be sanctioned immediately on filing proper application along with specified documents. Like present conditions prevailing in Cenvat credit provisions, even in Goods & Services Tax law, there could be a requirement of certification of refund application and the credit amounts. This would provide regular opportunities for CAs.
The above list is only illustrative and there could be many more services to offer. We need to wait and watch for what additional opportunities could get created once the final Goods & Services Tax law is introduced along with various rules and regulations.
How to get ready for client’s services
Before providing Goods & Services Tax related services, the professionals should be understand thoroughlly the GST law. As the present law is only in draft stage, lot of changes could be expected before law becomes final. Following could be few ways to update knowledge of Goods & Services Tax:
a) Attend seminar – This would be critical to understand the broad concept of Goods & Services Tax in the preliminary stage.
b) Attend workshop – In order to get detailed understanding of GST, attending workshops on GST would be essential.
c) Reading bare Act – To understand any law, it is important to ready the provisions as it is in the bare Act. The present model GST law may be understood which has many provisions similar to provisions in present indirect tax laws. One good example could be concept of credit on capital goods in GST is very similar to what is there in present Cenvat credit provisions. Knowledge of present indirect tax law could also be helpful to certain extent to understand proposed Goods & Services Tax.
d) Forming study circles – There is nothing like meeting of professionals to discuss the law which could throw lot of questions as well as answers. Study circles would be helpful in understanding the law in better manner.
At the present senerio it is not clear that if Goods & Services Tax could get implemented from April 2017 ? But , it is the perfect time for the professionals to start preparing in the best way possible to understand the needs of the clients. We could only hope that a qualitative Goods & Services Tax law is introduced considering the purpose of introduction of Goods & Services Tax rather than being time bound and introduce Goods & Services Tax in hurry.