The document provides an overview of the proposed Goods and Services Tax (GST) in India, including: 1) GST will combine multiple indirect taxes into a single tax, aiming to reduce complexity and inefficiencies. It will be levied as Central GST, State GST, and Integrated GST on inter-state sales. 2) Under GST, tax will be collected at the destination of goods and services rather than origin. Credits for taxes paid on inputs and capital goods will be available across states. 3) Implementation will require changes to contracts, purchase/work orders, IT/EDP systems, and awareness/training within organizations. Works contracts and other provisions may also

1. Are you ready toimplement GST ? क्याआपने GST लागु करने के ललएतैयारी कर
लीहै। (part-1)
INTRODUCTION
The Goods and Services Tax (GST) is a comprehensive Value Added Tax (VAT) on the supply of
Goods or Services. The word Supply has vide scope which includes stock transfers also. It is a levy
on Value Addition at each stage of supply chain with availment of tax credit on eligible inputs &
capital goods procured from any place i.e., within the State or import from outside the State /
Country. Its main objective is to combine all indirect tax levies into a single tax thereby replacing
multiple tax levies, overcoming the limitation of current indirect tax structure and creating efficiency
in tax administration.
Present Indirect Taxes in India
At present the following indirect tax aspects are relevant to the Construction Industry-
i. Customs Duties on goods imported or exported into or out of India through Customs Act and
Customs Tariff Act.
ii. Excise Duty on goods manufactured in India and availment of Cenvat Credit through Central
Excise Act and Central Excise Tariff Act
iii. Central Sales Tax (CST) on sale or purchase of goods in the course of interstate trade or
commerce through Central Sales Tax Act
iv. VAT on Goods sold or bought including deemed sale of goods under Works Contract and
availment of VAT Input Credit through VAT Acts by each State
v. Entry Tax / Octroi for entry or consumption of goods in local area through Entry Tax Act or Octroi
Act by some States
vi. Service Tax on taxable value of services provided in taxable area through Finance Act, 1994

2. Proposed Goods and Service Tax
The Government started its efforts in 2006-2007 to introduce the GST Act and the GST enactment
process has begun on 10-11-2009 by issue of white paper on GST for discussion. The constitution
(122nd Amendment) Bill, 2014 introduced in Lok Sabha on 19.12.2014 and passed on 6-5-2015. It is
waiting for approval of Rajya Sabha with the amendments proposed by the Select Panel of Rajya
Sabha.The following Central Taxes would be subsumed under the proposed GST:
a. Central Excise Duty
b. Additional Excise Duties
c. The Excise Duty levied under the Medicinal and Toiletries Preparation Act
d. Service Tax
e. Additional Customs Duty, commonly known as Countervailing Duty (CVD)
f. Special Additional Duty of Customs (SAD)
g. Surcharges, and
h. Cesses.
The following State related taxes and levies would be subsumed under GST:
(i) VAT / Sales Tax
(ii) Entertainment Tax (unless it is levied by the local bodies)
(iii) Luxury Tax
(iv) Taxes on lottery, betting and gambling
(v) State Cesses and Surcharges in so far as they relate to supply of goods and services
(vi) Entry Tax not in lieu of Octroi.
Both the Centre and the States will have concurrent power to levy tax on all goods and services. But
local levies like Octroi imposed by local bodies on movement of goods and services are not in the list
of taxes which will be subsumed by GST and will continue to exist even after introduction of GST.
Taxable Event
At present the taxable event is manufacture or production for Excise Duty levy, providing service for
Service Tax levy and sale or deemed sale for Sale Tax/VAT. In respect of GST the taxable event will

3. be at the point of “supply of goods or services”. Hence even the stock transfer would be taxable
under GST.
GST Structure
The GST shall have two components i.e., one levied by the Centre under 'Central GST' (CGST)
Statute and the other levied by the every State under 'State GST' (SGST) Statute. While the location
of the supplier and the recipient within the country is immaterial for the purpose of CGST, the SGST
would be chargeable only when the supplier and the recipient are both located within the State. In
the place of present CST, the government is proposed to introduce 'Integrated GST' (IGST) for levy
of tax on inter-state supply of goods or services which consist of SGST & CGST. Since the GST
would be a destination or consumption based levy as against the present concept of origin based
levy, the tax accrues to the State where the goods or services are consumed. It is understood that
the Government is considering the revenue neutral rate of GST at a rate between 18% to 22% which
represents the aggregate of CGST and SGST payable on the transaction. The salient features of
GST are given below- (click on respective heading to read details )
 A. CGST - The CGST(Central Goods & Service Tax) is payable at the specified rates on all
transactions of supply of goods or services whether within the State or Outside. This accrues to the
Centre.
 B. SGST- The SGST (State Goods & Service Tax) is payable at the specified rates on all
transactions of supply of goods or services whether within or outside the State. This amount accrues
to the State of destination in normal course.
 C. IGST - The IGST (Integrated Goods & Service Tax) is payable on all interstate
transactions of supply of goods or services. The rate would be a combination of both the State and
Central GST. It will be applicable on imported goods or on consignment / stock transfer from outside
the State. However there is proposal to exempt tax on consignment or stock transfers.
The CGST(Central Goods & Service Tax) is payable at the specified rates on all transactions of
supply of goods or services whether within the State or Outside. This accrues to the Centre.
GST Credit Availment
`The GST credit i.e., CGST, SGST or IGST may be availed-
 a. On all the input goods or input services procured for supply or resupply or resale.
 b. On the goods or services even though in the negative list, when the business is carried for
trading / resale of such goods or services.
 c. On the eligible capital goods procured for use in the business or manufacture.
 d. On the consumables or maintenance spares procured for use in the manufacture or
business other than those which are specifically excluded as ineligible.
GST Credit Utilization
GST credit can be utilized for payment of tax liability as given below:
 a. CGST can be used to pay CGST or IGST and it cannot be adjusted towards SGST.
 b. SGST can be used only to pay SGST or IGST and it cannot be adjusted towards CGST.

4.  c. IGST can be used first to pay for IGST then CGST and then SGST and can be adjusted
with any tax but in order specified. The following mechanism is being evolved for IGST:
 The Inter-State seller will pay IGST on value addition after adjusting the available credit of
IGST, CGST and SGST on his purchases i.e., tax to be collected by the Centre in the Origin State.
 If the dealer in exporting State utilizes credit of SGST for payment of IGST, then the
exporting State will transfer to the Centre such amount of SGST used in payment of IGST or the
Centre will debit that amount to the exporting State.
 The Importing dealer will claim credit of IGST while discharging his output tax liability in his
own State. If he utilizes such IGST credit for payment of SGST, then the Centre will transfer the
credit of IGST used in payment of SGST to the importing State. In other words, that amount will be
reimbursed by the Centre to the importing State i.e., tax passed over to the destination State. Hence
the tax revenue in case of SGST will accrue to the State where the imported goods and services are
consumed. Full and complete set-off will be available on the GST paid on import of goods and
service. Thus Centre will act as clearing house among different States.
Time Limit for Credit
Presently under the State VAT Laws, the time limit for availment of input credit is the tax period and
in some States the time limit is 3 months or 6 months or within financial year from the date of
invoice. Similarly under the Cenvat Credit Rules the time limit is one year for credit availment. Hence
it is to be ensured to avail the credit within the time limits in order to avoid disallowance. Under the
GST the time limit may be one year for availing GST Credit similar to the present Cenvat credit. The
time of supply is considered to have taken place at the earliest of the following events as per the
principle adopted by many countries-
 a. The time of an invoice issued or
 b. The time of any payment received by the supplier or
 c. The time of a taxable supply made
Input Credit Claim Verification
At present VAT input credit claims are being verified by the tax officials through their computer
system. Under GST Regime, a suitable system for automatic matching of invoice wise input credit
claims would be required for comprehensive revenue reconciliation and detection of fraudulent
availment or misuse of GST Credit. The suppliers and receivers of goods or services should be able
to upload the details of GST invoice into the Government Computer System, which would enable
them to identify the mismatches at their levels without involvement of tax officials like Income Tax
TDS credit gets reflected in Form 26AS. Otherwise the buyer has to suffer with loss of credit, when
there is mismatch of GST credit as per his Return with the GST amount shown by the seller in his
Return which further aggravates the problem instead of simplifying under GST Regime. Hence
automatic matching of GST credit claims and identification of all mismatches for follow up action
would be required. A transparent automated tax system will encourage voluntary compliance, reduce
disputes, and act as a major deterrent in preventing misuse of GST Credit, thereby augmenting
revenue.

5. Negative List under GST
As the GST envisages seamless credit, the restrictions on tax credits may be at a minimum. GST
credit will not be available on the proposed 1% CST levy which is expected to be in force for 2
years. In case the tax is paid under special rates prescribed for small businesses or lower rate
prescribed under special schemes then the GST credit may not be available. In general, GST
credit may not be available in respect of the following items:
a) On supply of goods or services supplied by unregistered person unless GST paid under RCM
(Reverse Charge Mechanism).
b) On supply of goods or services for manufacture or processing or packing or storing of exempted
goods or services, except when such goods or services are exported.
c) On restricted goods such as those specified when such goods are not used for supply or resale or
trading or manufacture or process of goods and for provision of services.
d) On petroleum products when used as fuel to motor vehicles except when used as fuel in the
production and supply of goods or services.
e) On the inputs which are lost or destroyed or damaged prior to use of the same in the manufacture
or process or in provision of service.
f) On goods or services used for personal and non business use.
g) On capital goods specifically excluded.
Documents on which credit is eligible
The following documents may be specified for availment of GST Credit:
 a. Supply Invoice for goods or services issued by manufacturer, dealer or service provider
 b. GST payment challan
 c. Supplementary Invoice for goods or services
 d. Bill of Entry where GST is charged
 e. Certificate of Customs appraiser
 f. Any other document specified/ prescribed for this purpose
The above source documents are to be collected and preserved for the specified period as proof
for availing the GST Credit since the Assessment under GST Regime may be the Audit based
one. Various States as well as Central Government Audit agencies will verify / scrutinise the
records and documents periodically in order to protect the Revenue. Credit would not be
available unless supply of goods or service is evidenced by tax paying documents.
Advantages of GST
a. It will bring uniformity in tax rates with only one or two tax rates across the supply chain and avoid
cascading effect of taxes.
b. It will enable simple, transparent and easy tax structure by subsuming of all levies on goods and
services into one GST.
c. It will provide smooth administration for levy and collection of indirect taxes.
d. It will increase tax collections due to wider tax base and better conformity.
e. It will reduce the overall production cost so that to compete in Global Market

6. f. It will remove tax distortions from the economy which will lead to sustainable higher growth and
improve the business climate in the country. As a result GDP ratio is expected to grow by 2%.
g. Simple tax system will attract more productive investment for growth.
Are you ready toimplement GST ?Activities to be undertaken for smooth
Transition toGST (part-2) क्या आपने GST लागु करने के ललए तैयारी कर ली है।
Activities to be undertaken for smooth Transition to GST
In view of likely implementation of GST w.e.f. 1-4-2016 or after some time later, various activities are
to be undertaken for smooth transition from the existing tax system to the GST Regime. A team is to
be formed allocating the specific areas to be attended by them. Create awareness within the
organization about the changes and modifications in roles/responsibilities of concerned personnel.
Communicate the GST requirements through training, circulars etc to the concerned. The important
task of the team is to review the impact of new tax on-
 Contracts which under progress or completed or tendering stage with the Clients considering
the present taxation terms and conditions or clauses
 Purchase Orders for supply of goods which are under progress / quotation stage with
vendors
 Work Orders for procurement of services which are under progress / completed / quotation
stage
 Agreements for professional services
 Carry forward of Credit
 Pending Assessments / Appeals
 Changes to Information Technology / EDP System
Difference between the present Taxes and proposed GST
 VAT is not applicable on job work charges whereas GST is applicable on the same.
 VAT is not payable on stock transfer of goods whereas GST is applicable on such goods.
 A major defect under the State VAT is that the State is charging VAT on the excise duty paid
to the Central Government, which goes against the principle of not levying tax on taxes.
 CST is not available for input credit whereas the Central GST / IGST is available for setoff.
 The present system of issue of ‘C’ Forms or ‘EI/EII” will be dispensed with in view of levy of
IGST and availment of IGST setoff.
 Exports would be zero-rated. Similar benefits may be given to Special Economic Zones
(SEZs). However, such benefits will only be allowed to the processing zones of the SEZs. No benefit
to the sales from an SEZ to Domestic Tariff Area (DTA) will be allowed.
Works Contract Tax concept under present VAT Law and under GST
VAT is payable on Works Contract which is a contract to carry out any work such as building,
processing or manufacturing. Such work may be for purposes of repairing or fabricating things and
materials. The intention may be manifest when the prices for the goods to be used in the works
contract and the charges for work / labour are given in lump sum. With the introduction of GST the
concept of deemed sale of goods under works contract will become irrelevant. The elaborate
scheme of reductions such as labour etc from the gross sale value will not be required since GST

7. will have a simple structure and goods as well as services will be taxed on a uniform rate based on
destination place principle.
Some of the specific issues relevant to Works Contract are given below:
i. Tax on Materials supplied by the client or employer
Under the present VAT Law the value of materials supplied by the client to the contractor or by the
contractor to the sub-contractor at free cost is not taxable, since there is no sale in such transaction,
whereas the value of materials supplied for a price would be treated as a sale. Under Service Tax
Law even the value of free issue of materials by the client to the main contractor or by the main
contractor to the subcontractor is required to be included for levy of service tax under the Works
Contract Composition Scheme. Under the GST the question of inclusion of free issue of materials
does not arise since the goods as well as services would be taxed on a uniform rate and the concept
of composition scheme will become redundant.
ii. Works Contract Tax (WCT) Deducted at Source under present VAT Law
Under the present system WCT is to be deducted by the client from the payment to the contractors
and by the contractor from the payment to the sub-contractor at appropriate rate as may be
prescribed in State VAT Laws and to be deposited to the Government. Similarly under Service Tax
Law, service receiver has to remit Service Tax under Reverse Charge Mechanism (RCM) in respect
of certain services and specified service providers. It is not clear from the “Discussion Paper on
GST” that whether the TDS provisions existing under the present State VAT Laws or the RCM under
Service Tax Law will be retained or not. In case the provisions for TDS or RCM are not retained,
then a suitable mechanism is to be evolved by the Government to give GST credit to the buyer
immediately based on the remittance or discharge of tax by the seller in similar to the system like
Income Tax TDS credit gets reflected in Form 26AS.
iii. Discharge of VAT liability either by main contractor or subcontractor under present VAT
Law
Under the present VAT Law, in most of the States, either the main contractor or subcontractor can
discharge the VAT liability in respect of transfer of property in goods involved in execution of the
works contract. Under Delhi VAT Law both the main contractor and subcontractor have to pay VAT
and main contractor has to claim VAT ITC based on Tax Invoice raised by subcontractor. Similarly
under Service Tax Law also both the main contractor and subcontractor have to pay Service Tax
and main contractor has to claim Cenvat credit based on invoice raised by subcontractor. Under
GST also both the main contractor and subcontractor may have to pay tax on their turnover value
and the main contractor has to avail input tax credit based on tax invoice of the subcontractor.
Activities to be undertaken for smooth Transition to GST
i. Review of Contracts with Clients
a. List out the contracts in progress and closed project sites
b. In respect of contracts with closed sites, it is to be reviewed as to whether disputes are existing
against amount of sale value or escalation pending and impact of GST on realisation of such
disputed amount.
c. In respect of contracts in progress, to review the work pending in terms of value and quantity to
assess the impact of GST liability.
d. Tax clauses or conditions are to be reviewed as to whether the price is inclusive of taxes or
exclusive of taxes.
e. Calculate the expected additional tax liability under GST if taxes are inclusive. General clause can
be used for claiming of the above tax by submitting a letter to the client and follow up action is to be
taken till obtaining a confirmation from him for such claim.
f. Modify the invoicing and other systems with required Information Technology Support to make
them GST compliant.

8. g. Review the supplies pending under the Contract in respect of E-1 Sales and calculate the
expected additional tax liability under GST for such Sales. Submit a letter to the client claiming the
above tax and follow up action is to be taken till obtaining a confirmation from him.
h. Review the Contracts with VAT Composition Scheme which was specified by the Client in the
contract and calculate the expected additional tax liability under GST for the pending work. Submit a
letter to the client claiming the above tax and follow up action is to be taken till obtaining a
confirmation from him.
i. Review the Service Tax applicability on Contracts and arrive the additional tax cost under GST
considering the following components and initiate necessary action for collection of it:
Service Tax Applicability Price is inclusive or
Exclusive
Regular Method or
Composition Method
Applicable Inclusive Regular
Applicable Inclusive Composition
Applicable Exclusive Regular
Applicable Exclusive Composition
Exemption claimed but
disputed by the Dept
Check whether exemption
clause is specified or not in
the contract
Exemption claim
disputed by the Dept
Exemption claim without any
dispute
Exempted
j. In case of un-invoiced services, the same to be taxed at the rate of Service Tax prevailing prior to
GST for the service completed before implementation of GST. In case of continuous services, the
portion completed before GST implementation to be taxed at the Service Tax rate and the services
provided thereafter to be taxed at the Rate of GST.
k. Study the implications of the changes due to GST on the organizational cash flows.
ii. Review of Contracts for which VAT Composition Scheme opted
Review the contracts for which Composite Scheme has been opted under existing State VAT Laws
and avail Credit of VAT or CST or Entry Tax paid on available stock under transitional provisions as
on the date of GST implementation.
iii. Review of Contracts for which Regular Scheme opted
Review the contracts for which Regular Scheme has been opted under existing State VAT Laws and
avail Credit of VAT or CST or Entry Tax paid on available stock of non eligible items such as
consumable items, maintenance materials, lease rentals etc., on which VAT Input Credit was not
availed as on the date of GST implementation.

9. iv. Review of Purchase Orders with Vendors
a. To verify whether the vendor is Registered Dealer or not.
b. Purchase Orders are to be reviewed for the supplies pending and quantify the supplies to be
made before GST period and after the GST period.
c. Tax Clauses or conditions to be reviewed as to whether price is inclusive or exclusive of taxes and
in case of inclusive of taxes the rate is to be revised considering the GST.
d. A clause is to be inserted for issue of valid GST invoice in order to avail GST Credit irrespective of
the vendor whether local or from out side the State.
e. A clause is also to be inserted for recovery of GST amount in case of mismatch of GST Credit
with the Return filed by the vendor.
f. Review of Purchase Orders placed for Supplies under E-1 Sales, High Sea Sales and other
exempted Sales such as SEZ etc., and revise those Purchase Orders considering impact of GST.
g. Review of Purchase Orders placed for procurement of Capital Goods
v. Review of Work Orders with Subcontractors
a. To verify whether the Subcontractor is a Registered Dealer or not.
b. In case of Un-Registered dealer necessary steps are to be take for obtaining GST Registration if
exceeded the exemption value.
c. Work Orders are to be reviewed for the work pending in terms of quantity as well as value and
whether with material or without material.
d. Tax Clauses or conditions to be reviewed as to whether price is inclusive or exclusive of taxes and
in case of inclusive of taxes the rate is to be revised considering the GST.
e. A clause is to be inserted for issue of valid GST invoice in order to avail GST Credit.
f. A clause is also to be inserted for recovery of GST in case of mismatch with the Return filed by the
Subcontractor.
g. Review of Piece Rate Work Contracts as to whether inclusive of taxes or exclusive taxes and
necessary amendments are to be made for tax clauses.
vi. Review of Agreements with Professionals
a. To verify whether the Professional is a Registered dealer or not.
b. In case of Un-Registered dealer, necessary steps are to be take for obtaining GST Registration if
exceeded the exemption value.
c. Agreements are to be reviewed for the job pending value.
d. Tax Clauses or conditions to be reviewed as to whether fees is inclusive or exclusive of taxes and
in case of inclusive of taxes the rate is to be revised considering the GST.
e. A clause is to be inserted for issue of valid GST invoice in order to avail GST Credit.

10. f. A clause is also to be inserted that in case of mismatch of GST Credit with the Return filed by them
the GST amount will be recovered from them.
vii. Carry forward of existing Cenvat / State VAT Credits
Credit availed but not utilised may be allowed to carry forward. Similarly the tax or duty paid on
stock of goods as on the date of implementation of GST may be allowed to take as cenvat / input
credit. Hence the following steps are to be taken:
 Carry forward the existing Credit under VAT, Service Tax, Central Excise as per the books of
accounts to GST Credit Account depending upon the provisions specified in the GST Law.
 The Credit of Duty / Tax paid on stocks of goods available in raw material, work in process or
finished stage which was not taken or partially taken due to disallowance or restrictions on
admissibility in earlier periods. Such credit of Duty / Tax on those items can be allowed to avail
under GST Regime. This could be:
 CST which was not allowed as credit on goods procured.
 VAT which was not availed / allowed as credit on goods procured.
 Entry Tax which was not availed / allowed as credit on entry of goods into the State.
 Central excise duty which was not availed / allowed as cenvat on goods procured.
 Service Tax which was not availed / allowed as credit on services.
 The Duty / Tax paid on capital goods on which credit has not been availed due to disallowance
or restrictions on admissibility in earlier periods. Such credit of Duty / Tax on those items may
be allowed to avail if GST applicable for output services / goods. This could be:
CST which was not allowed as credit on goods procured.
VAT which was not availed / allowed as credit on goods procured.
Entry Tax which was not availed / allowed as credit on entry of goods into the State.
Central excise duty which was not availed / allowed as cenvat on goods procured.
Service Tax which was not availed / allowed as credit on services.
 Additional duties of excise credit for imported goods have not been availed due to disallowance
or restrictions on admissibility in earlier periods by certain dealers. Such credit of Duty / Tax on
those items can be allowed to avail if GST applicable for output services / goods. This could be:
VAT credit not availed by service providers.
All taxes on those who were not liable or exempted in earlier regime.
viii. Other requirements in relation to input credit
The following other requirements are also to be fulfilled before implementation of GST -
A. Steps to be taken for availment of Credit on Stock
As on the date of transition the stocks in the nature of raw material, packing material, consumables,
stores, fuels, semi-processed goods, finished goods and capital goods may be physically available
at various places / sites. The said stocks including capital goods may be subjected to GST after
implementation. GST laws may provide one time facility for availment of credit pertaining to pre GST
period say within the three months or six months period from the date of implementation of GST.
Hence necessary steps are to be taken for availing credit of the tax / duty paid on such stocks as
given below:

11. a. The quantitative confirmation of stocks in hand as on date of transition would be required.
b. Chalking out a plan for physical verification of the stocks in all the sites / places where they exist.
This would cover the goods for resale, job work and the capital goods.
c. The duty/ tax paying documents of stocks are to be collected and preserved for specified period.
d. The proportionate credit of stocks based on above stocks is to be claimed.
e. In case tax quantum is not available in the documents, then the rules are to be referred on how
and to what extent credit could be claimed.
f. The entitlement to carry forward may be subject to fulfilment of certain conditions such as
transitional credit to be provided only in respect of goods that have suffered appropriate tax and in
respect of which the stock records are maintained on day-to-day basis etc., or as required under the
law of the appropriate State.
g. The burden of proving that such goods have suffered tax would be on the dealer. Hence,
purchase invoices along with appropriate stock records must be shown as evidence for tax paid on
such inventory.
h. The details of carry forward credit are to be provided in the declaration/ claim forms or statements
as prescribed under GST Law. The declaration may require to specify the complete details of
inventory or goods lying in the stock and to be filed before the jurisdictional tax officer in the
prescribed manner. The Prescribed Officer on satisfaction of the claim would issue a certificate
which will entitle the dealer to avail the Credit under GST and carry forward the appropriate credit.
B. Credit on goods lying at job-workers or third party or client premises
As on the date of implementation of GST, it may be possible that the goods are lying with job-worker
or third party or client. Ensure that transitional provisions are followed for availing credit of
appropriate taxpaid on goods lying in stock with the Job-worker. The possible situations with respect
to goods lying at job-worker’s premises are:
a) The goods after being processed are lying at job-worker’s premises on the implementation date
and would be returned back to the principal.
b) The goods are being used by the job-worker for further processing.
c) The goods are in the nature of capital goods.
C. Partial credit taken prior to GST for tax paid on capital goods
Normally cenvat credit / input tax credit on capital goods would be available in instalments or in
proportionate for the specified periods. The entitlement to credit is conditional and it is possible that
certain conditions are yet to be fulfilled on the date of implementation of GST. Ensure that
Transitional provisions are followed for availing credit of appropriate tax paid on capital goods.

12. D. Tax paid on sale of goods in transit or pending for certification / approval
The Goods procured in the current regime may be in transit before delivery to customer and may be
received by the said customer post implementation of GST or may be pending with customer for
approval. Transition provisions are to be followed to avail transitional credit on tax / duty paid on
those goods in transit or pending for approval.
ix. Ensure for proper Accounting of Goods or Services procured
As the Central Excise duty, Service Tax, CST & VAT paid on stocks in hand, semi finished goods,
finished goods & capital goods may be allowed to avail as credit. Hence, the Goods or Services
procured in pre GST period are to be accounted properly in the books of accounts as on the date of
GST implementation. The unaccounted stocks or stocks not represented by valid duty/ tax paid
invoices would not be entitled to avail credit.
x. Sales/ Service Exempt at present but taxable under GST
In case a product or service becoming liable for GST for first time, the credit for the goods in stock
on which taxes or duties such as CST, Central Excise , VAT, CVD, SAD or Entry Tax paid or service
tax paid for services for the work in progress would be eligible for availing credit. Hence proper
records are to be maintained in case of exempted sales or services in order to entitle for transitional
credit on those goods or services.
xi. Review of Assessments pending
Review the Assessments pending now and initiate necessary action for completion of VAT
Assessments up to the latest Financial Year. The claim for refund of credit as per Returns can be
made wherever possible instead of carry forward. In case refund is not materialised through
Assessments then carry forward the same. Under the current taxation system, a claim might have
been filed for refund which may be pending before the Assessing Authority or Adjudicating Authority
for disposal. Transition provisions are to be applied for protection of pending refund claims. Similarly
Credit of VAT TDS under the existing VAT Act or payment of service tax under RCM can be taken
under GST Returns if remitted in transition period.
xii. Review of Tax Disputes / Appeals / Cases
Review the Disputes / Appeals or Cases for which credit has been reversed but pending before
various Authorities or Courts. The reversed credit under protest in pre GST period can be availed in
GST period if settled favourably. Also the tax / duty paid under old laws may be entitled as credit
under GST if those goods / services are subjected to GST.

13. xiii. Changes to Information Technology / EDP System
As maintenance of records is essential under GST Regime in order to comply with the provisions,
necessary changes are to be made in the EDP System as given below:
a. Insertion of New Accounting Codes for GST Expenditure in the Accounting Package and for
transfer of existing Tax Receivable Accounts to GST Receivable Accounts wherever required.
b. Insertion of New GST Rate Master i.e., SGST, CGST & IGST Rates in the Tax System
c. Development of various Reports as per the Formats to facilitate for filing of GST Returns as given
below:
 Purchase Statement with the details of Site Name, Division Name, Description of Material,
Vendor Name, Address, GST Registration Number, PO Number & Date, MRN No & Date, Invoice
No & Date, Value, GST Rate, GST Amount, Payment Voucher No & Date
 GST Credit Report for Services with the details of Site Name, Division Name, Type of
Service, Service Provider’s Name, Address, GST Registration Number, WO Number & Date,
particulars of input service, Invoice No & Date, Value, GST Rate, GST Amount, Service Receiver
Portion for Payment under RCM, Service Provider Portion for Payment under RCM, Payment
Voucher No & Date.
 Project Site wise, Division Wise and State wise GST Receivables / Payables Reports
 Report of output services showing the Site Name, Division Name, Type of Service, Client /
Service Receiver’s Name & Address, ST Registration Number, Contract / Agreement Number &
Date, Particulars of output service, RA Bill / Invoice No & Date, Date of Completion of Service,
Certification Date, Value, GST Rate, GST Amount, Receipt Voucher No & Date
 Project Site wise, Division wise and State wise GST Turnover Details.
Conclusion
The present multiplicity of rates in goods or services in India is leading to complexity in interpretation
as well as in implementations. The initiation of the Government to introduce GST is a revolutionary
step to ease the present complexities in indirect taxes. It brings further tax reforms in the process of
economic liberalization, privatization and globalisation. This process should be continued and the
proposed dual GST system is to be replaced by a single unified GST system applicable to the whole
country in future. It is expected to have a simple tax structure by elimination of distinction between
goods & services and in turn avoids cascading / multiple tax effect on works contracts. GST should
provide a clear definition to the concept of goods, services, manufacture, sale, works contract,
valuation and taxable event though the relevance of those components is low under the proposed
GST. It is also expected to frame simplified procedures, rules and regulations in administering the
GST and enable for smooth transition from the existing system to proposed GST Regime.