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GST Governance – A Glance
Central Levies
• Central Excise Duty
• Countervailing Duty
• Special Additional Duty
• Cess
• Service Tax
State Levies
• VAT & CST
• Entry Tax
• Entertainment tax
• Luxury Tax
• State Cesses and Surcharges
GST
• Central GST *
• State GST *
• Integrated GST *
* Destination based Consumption Tax
Input Tax Credit
• Highly Critical
• Determines the Output Tax
• Audit Perspective
• Reco - Working, GL, Portal
Output Tax• Reverser Credit
• Reco - Working, GL, Portal
• Stringent Timelines
2
GST Governance – Critical Elements
GST Governance
Type of Sale
GSTR-2A : RECON
GSTR2
Goods & Services Received
Tax Invoice
Supplier Compliance
Documents Required
Sales
Sales Return
Stock Transfer
Post Sale Discount
GSTR-1 : Outward
Order of Utilization
IGST -> IGST/CGST/SGST
CGST -> CGST / IGST
SGST -> SGST / IGST
Type of Invoice
Supplementary Invoice
Job Work / FOC / Interstate Sale
SGST -> SGST / IGST
Invoice Content Check
Paid Tax
Filed Returns
GST Portal Update
Tax Invoice(Local / Interstate)
Debit Note(Price Estimation)
ISD Invoices(Dist. Of Comm. Cost)
Bill of Entry(Import)
RCM (Goods & Services UnReg.)
GSTR-3 : Balance Payable
GSTR-3B : Payment
3
Governance – CTQs & Risks – The Why!
Business CTQs Description Risks & Threats
Documented Process Management
Documents Procedures, SOP’s, Work Instructions & Checklists for every aspect of GST Compliance.
▪ Statutory Non-Compliance ▪ Non-Repeatability
Records Reference Management
Document Storage & Retrieval of Taxation Guidelines, Advisory Communications, Conceptual Clearances, Legal Opinions, Unorganized Mail Approvals.
▪ Lack of Ownership▪ Audit Non-Conformance
Volume Data AnalysisManual data extraction - Multiple reports and consolidation –Multiple Registration’s transactions | Reversal | CN | Disallowance
▪ Defective Output▪ Rework & Redundancy
Centralized Return Filing Multiple Teams handling Returns [Data - HO Team; Filing - Regional Teams]▪ Multiple Touchpoints▪ Non-Standard Processes
GSTR-2 Reconciliation Eligible & Non-Eligible ITC, Reverse Credit Mechanism, Reco with Vendor Invoices▪ Incorrect Input & Output Tax▪ Cash Loss / Rework Efforts / Non-Compliance
ReconciliationReconciliation between carry forward of Excess credit with Monthly Return versus ERP System
▪ Statutory Non-Compliance▪ Audit Queries
Document ArchivalApplicable for All returns Filed - Backup documents for GST Calculations, Non-Editable conversion & Archival
▪ Document Traceability▪ Timely Retrieval
Vouching GovernanceTransaction Correctness of - Tax Charged by Vendors, Accounting Entry, Statutory Parameters in Invoice
▪ Accuracy▪ Governance
4
Document Management
Reports & Dashboards
Support Services
Process Study Value Stream Mapping
Standard Operating Procedures
Checklists & Work Instructions
Record Governance Model
Metrics & Dashboards
Issue Tracker Document Archival
Structure for GST Returns Filing
Facilitate GSTR-2 |Vouching
Reconciliation Working vs GL vs
GST Portal
CSAT Governance & Compliance
AS-IS StudyTO-BE Process
Model
Governance - Broad Scope – The What!
5
ASIS Process Study – Segmented Approach & Document Preparation by ISO Certified Documentation Experts
Simplification of Volume Data Analysis – BA Tool [One Click Algorithms & Macro Based Solutions]
GST Reference Manual [SOP, Process Guidelines, Interpretations, Advisory Communications, Legal Opinions]
Coding Storage & Retrieval methodology [Record Reference | Conceptual Clearances | Mail Approvals]
RACI Matrix Approach – Responsibility & Accountability at all levels for Centralised GST Returns Filing Model
GSTR2 & ITC RECO – Competent & Hands-on expertise in Reconciliation | Dispute Management Desk
Record Archival – Calendarized Model, Checklist Driven, Structed Governance [Maker, Checker, Audits]
Customized Vouching Audits - Audit Plans, Schedules, Procedures, Guidelines, Checklists etc. – Post Audit Analytics
Our Quality Approach – The How!
6
The Framework
7
Advocacy• ROT Adherence
• Compliance on Mandates
• Applicable Advanatages
• Early Assessment of Tax Impact
• Ease of Future Reference
Baseline• Operating Model
• Sourcing
• Distribution
• SCM Process
• Contracting
• Multi-level Drilldown
Impact Assessment
• Revenue Stream
• Procurement
• Availability of Credit of GST
• Transitional Credits
Accounting & Reporting
• Tax Credit, Payments and accounting
• Change assessment in accounting entries (incl. revised chart of accounts, compliance with standards)
Compliance• Compliance with
GST Requirement
• Tax credit transitions
• Return Reporting
• Other Statutory compliance
• High Quality Analytics
Governance• Process PITSTOP
• PMO Tools
• Compliance Manager
7
Team Structure – The Who?
Team
Program Director
Program Manager
GSTR-1[Output Tax
Liability]
GSTR-2[ITC]
GSTR-3B
DMD
V-Team
R-Team
Centralized Team Structure
Competent & Skilled
Relevant Exposure
Taxation Expertise
CA Certified SME
Centralized Monitoring
Macro Driven
8
GSTR1 Process
STARTReports from Systems & identified sources
for GSTR-1
Validation of Output Tax
System Reports• Sales Report• Transfer Price (TP)• GL Dump [IGST / CGST / SGST]• Credit Notes & Debit Notes• Stock Outward Movements• Scrap Sales• Unregistered Purchases
Inputs from Other Sources• Revenue Files• Fixed Asset Reports• Inter-Unit Transfer (IUT) Movements• IUT Cost Transfer• IUT Manual Entries• Other Incomes
Compilation of GSTR 1 in specified format
[GSTN wise]
Random Sample Checking
Reconciliation with GLConsolidated of
SchedulesIssue list Sign-off
Summary of GSTR-1 Filing Input
Business Dashboards &
Reports
Data Duplications Cancellations, ReversalsAny Specific errors etc.
Archival Process – Final Files and Working files
END
9
GSTR2 Process
NO
YES
START Reports for GSTR-2Compilation of Inward supply
• ITC Ledger• RCM Report• Exempted Purchase
Vouching ProcessExpense GL
Mapping
Determination on Eligibility of ITC
Business Dashboards & Reports
Archival Process – Final Files and Working files
END
Eligible ITC?
ITC ReversalReconciliation of
ITC with 2AValidation of
Exempted Purchase
RCM ProcessReconciliation –
ITC vs. GLIssue list Sign-off
• Stock Inward Movements• Asset in• Import Purchases
10
The Next Steps & Time Line (Kickoff Goal 45 Days)C
ust
om
er
1. Letter of Indent
2. Volume Data Sharing
3. Scoping
Co
mb
ined
1. Team Structure
2. Commercial Signoff
3. Award of Contract
INFI
NIM
IND
S
1. Team Onboarding
2. Project Kick-off
WK-1 to WK-4
WK-5 to WK-8
WK-9 to WK-12
Beyond
Team Onboarding
Process Study Transition Signoff
Sustenance
11