GST for business

How to get your supply chain processes to be GST ready

The implementation of GST will have an impact on companies across the board irrespective of the sector they operate in. Come July 1st, all the stakeholders of your business must be GST compliant. This will include your vendors, dealers and distributors.

If not GST complaint, you will lose the right to claim input credit on purchases. Similarly, if the distributors or dealers fail to comply with GST a customer they will not be able to pass the benefits of input credit to customers. Obviously, this is something that customers will not take kindly to.

With the GST rollout merely a couple of months away, you need to carry out a supply chain assessment and remodel the supply chain processes for your business. The essence and the key concept of GST are seamless data exchange. To help businesses latch on to the new compliance requirements, the Government has appointed GST Suvidha Providers (GSPs). Their job is to augment automation and make your transition to GST a smooth experience. The need of the hour is to partner with a GSP partner that can provide you with a customised solution for holistic GST compliance.

In order to suit the new GST regime, you to need to assess the impact on your supply chain processes and develop a new operating model that is compliant with the new regulations. Here we have identified various supply chain touch points and the steps you must take to modify them.

Restructuring processes and training personnel

First up, you need to set up a streamlined structure beginning from your own manufacturing locations, sourcing locations, warehouses and finally the distributors and customers. The network must be reorganised in a manner that all the stakeholders involved in a product life cycle are in sync with each other. This may require you to redesign your supply chain organisation structure.
You need to identify and train the key personnel at each supply chain touch point so that all invoices get uploaded on the GST network and the process of claiming tax becomes shorter and easier. Thus far, returns were filed either on a monthly, quarterly or on a biannual basis. Post GST implementation, 3 returns that are fully matched to your suppliers and customer need to be filed on a monthly basis. If your business has a high number of transactions, you need to be on your toes to adhere to the new regulations.

Contract management

Based on a GST impact study that you ought to have carried out by now, there is likely to be a need to renegotiate with certain vendors. Re-examine all your contracts on the buy and sell sides and scrutinise them on the basis of geography, duration (long or short term) and chalk out terms of contract renewals as necessary under the new GST regime. The idea is to make the most of the opportunity to rework a tax efficient business model.

Leveraging technology

Under the new regime, your software system is your new best friend in order to be GST compliant. Going forward there will be increased dependency on technology. Right from invoice matching, the filing of returns, ledger reconciliations to the calculation of input credit tax will be done on your software. Patch in software solutions will not help at this point of time. What you need is a customised and secured software solution that is both reliable and scalable. Therefore, it is important for you to seek out GST software solutions experts who can provide easy to use solution that will make your transition to GST hassle free.

In conclusion 

It is fair to say that to be GST compliant and remain competitive under the new regime you will have to re-examine and redesign the organisational model of your business, and a great deal of it can be achieved by choosing the right software experts.

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