GST(Goods & Services Tax) Review

A Summary of the Process of the GST Review
TO UNDERSTAND BUSINESS OPERATIONS
  1. To Understand the activities performed by Company;
  2. Discussion to understand the entire supply chain of the Company;
  3. Discussion with identified Company personnel to understand the flow of information from ERP system to GST compliances;
  4. Share an Information Request List (IRL) to the Company
  5. Collation of information and documents to substantiate our understanding.
 
GAP IDENTIFICATION AND ANALYSIS
  1. To examine every operational process established in the Company to capture the data of transaction on the outward and inward side to understand whether all the supply transactions have been disclosed, in the periodic returns;
  2. To map and capture the tax positions for the transactions on an as is basis and as it ought to be to identify the gaps in the same.
  3. Our review of processes shall also be supported by our review of all the documentation maintained by the Company to conform to the requirement of GST law; and
  4. Discussion with the Company management or identified personnel to understand the practical difficulties faced in conforming to the procedure and documentation prescribed under GST legislation.
RISK IDENTIFICATION AND ANALYSIS

By way of our review, we shall identify risk to the Company at three levels – Financial, Business and Reputation. This objective of our review is intended to be achieved in the following way:

  1. Financial risk: Identify the high-risk positions and procedure adopted by the Company that may attract tax liability, interest or penalties for the Company under the GST law and estimate (quantify) such liability for the period under review;
  2. Business risk: Identify the operational areas where Company has adopted sub-optimal positions as against industry benchmarks that may affect its competitiveness and profitability and estimate (quantify) such loss of business/profitability for the period under review; and
  3. Reputation risk: Identify the risks to Company name and brand as a result of potential non-compliance and adopting incorrect positions under GST law and estimate (quantify) such potential loss for the period under review.
 
IDENTIFICATION OF OPPORTUNITIES

To identify the potential opportunities that the Company is entitled during the review period as well the potential tax optimizations for the prospective period by way of the following:

  1. Efficient management of working capital: Identify the transactions that are liable to lower tax rates but which are being invoiced at a higher rate or to identify further opportunities for availing input tax credits;
  2. Price/Cost Reduction: Identify the operational areas where Company can eliminate inefficiencies arising from duplication of procedure or documentation and thereby reduce product cost or pricing to enhance its competitiveness in the market;
 
MANAGEMENT REPORT FOR DIAGNOSTIC REVIEW

Draft report to the Management to discuss and highlight the gaps, risks and opportunities.

The final report shared with the Company will contain the Gap analysis as well as suggestion for addressing the gaps.

 
OBJECTIVE OF GST REVIEW
  1. Assess the extent of compliance undertaken by the Company.
  2. Ensure all the transactions that are undertaken by the Company comply with all the provisions of the law.
  3. Identify areas of improvements and provide value add on steps to improve the existing processes in the Company.
  4. Preparedness for any Show cause notice or litigation that may arise in the future, due to various risk factors that are identified.