GST Coming……Are your IT systems compliant to handle GST?
Come GST and various assessees would need to put in place a mechanism to have correlation between every entry. Most companies would need to upgrade their accounting or ERP systems to achieve the correlation
Under the new GST system, an organization would need to monitor movement of goods or other inputs from one warehouse to another or from one location to another. In cases where the goods with in same organization need to move from one state to another, the assessee would need to have full tracebiity including movement from various check points
Any gap in such traceability may lead to denial of tax credit. In present day cost competitive scenario, such denial of tax credit may lead to cost overrun which an entity may ill afford.
Most ERP systems have upgraded their system to meet the requirements as stipulated under the provisions of GST, though at present the rate of GST is yet to be finalized. It would be only upon final announcement of the tax rates that impact of various parameters as procurement, warehousing and impact on vendors and customers would be known
Another aspect of the GST system is that each registered assessee would compulsorily have to file online return and the data would be shared by various revenue authorities as Income Tax, etc. Though details of such sharing are yet to be made public, it is expected that largely on lines of form 26 system where an assessee is able to check the tax deduction by various payees online. Any variation is such tax deduction and as declared by assessee in his return gets triggered automatically
This would call for robust IT system for any assessee and various assessee may need IT systems customized to their requirement