Impact of GST on The Life Of Chartered Accountant

The role of a Chartered Accountant in GST is significant in India. The first and foremost thing you need to understand is that the responsibilities of a Chartered Accountant are not to reduce the tax liabilities of a business but to educate the entities and help them comply with the laws. A similar case is with GST. Since this indirect tax system was implemented a few years back in India, not all businesses are aware of the complete regulations.

In both houses of Parliament, the Goods and Services Tax (GST) was passed after more than a decade of anticipation. Simultaneously, it brought new possibilities for businesses and individuals in India. Chartered Accountants were also affected as the GST framework introduced several changes to their established work practices. Comprehending the individual sections of the GST law is one of the biggest challenges for the CAs. They are required to be updated on the latest legal developments. In this way, they can propose their clients valuable advice.

Along with changes in the way businesses run in India, GST is also going to impact the life of the professional chartered accountant in a manner of some difficulties and convenience. This blog relates how the impact of GST on CAs has reshaped their roles and services over the years. Therefore, these professionals can guide businesses in navigating and complying with the new regulations. 

Therefore, they reach out to CA professionals for help. Having an important role in helping companies with the rules and regulations of the taxation system, their lives have been affected by the GST implementation.

GST Impact on CA firm

The enactment of GST has influenced CA firms in numerous aspects, including alterations in compliance obligations, service provisions, and overall workload. These firms need to support clients with registration, adherence to regulations, and the submission of returns, ensuring that filings are both accurate and punctual. Also, the new tax framework has opened routes for CA firms to deliver advisory services, including tax planning and dispute resolution.

Choose Online GST E-Filing Software with CA Website – Get Free Demo!

Scope of Study

• Compliance Challenges: An exploration of the difficulties faced by Chartered Accountant (CA) firms in achieving
• GST compliance for their clients, which includes registration, filing returns, and tax payments.
• Operational Impact: A study of how GST has influenced the operations of CA firms, focusing on alterations in workload, the need for staff training, and the integration of technology.
• Comparative Analysis: A comparison of the accounting landscape before and after the enactment of GST, highlighting the shifts in accounting practices, compliance obligations, and service offerings.
• Sector-specific Impact: An investigation into how GST has influenced CA firms across various sectors, which consists of manufacturing, services, and e-commerce.
• Technology Adoption: An analysis of the technology in ensuring GST compliance and improving accounting practices, focusing on software implementation and digital transformation.
• Training and Development: An analysis of the training and development necessities for CA firms concerning GST, underscoring the need for skill enhancement and knowledge improvement.
• Regulatory Framework: A study of the regulatory structure managing GST and its implications for CA firms, including compliance obligations and procedures for dispute resolution.

Life of Chartered Accountants After GST Implementation

Increase in CA’s Clientele

GST is a whole new taxation system in comparison to the former indirect taxation system we had. Since its implementation, businesses have been doing good but at the same time complaining. They reach out to the CA community for help asking about the applicability of GST on their businesses and the registration process. 

A CA has a significant responsibility in this situation to inform clients of GST law in addition to providing advice. This is essential because, in order to comply with the GST law, one must have a fundamental understanding of how it affects businesses. A CA can bridge this knowledge gap. Simply put, companies contact the CA community for GST counselling and other services, including registration, return filing, and GST accounting. All of this undoubtedly results in a rise in CAs’ clientele, which will then result in an expansion of their total business.

Boon for New Chartered Accountants India

For newly licensed and prospective chartered accountants, GST is a life-saving tool. The straightforward explanation for this is that GST has been introduced for the first time in India. In other words, both the experienced CA and the CA who is less experienced are in the same boat because it is something new. Newly licensed chartered accountants should take advantage of this chance to advance their careers by surfing through the GST wave.

Growth of Revenue Due to Compliance with Different Services

The potential law allows CAs to provide a package of services in addition to GST, such as accounting services, GST registration, timely return filing, tax payments, etc. This technique will undoubtedly be profitable because it is simpler to repeatedly earn from a current client who utilizes different services than it is to get a new client. 

Most importantly, the compliance phase will begin when a client has been effectively educated and transitioned into the GST system. Compliance with GST requires a considerable increase in revenue for the CA community and is a recurring undertaking. This increase in income has the potential to significantly impact both new and seasoned chartered accountants.

Ease of Doing CA Work

Before the implementation of GST, we had a variety of indirect taxes, including the Excise Tax, Service Tax, VAT, and CST, in addition to numerous other taxes and regulations. Chartered accountants and their clients have frequently struggled with this complexity since they are prone to making compliance mistakes. In other words, they can be about to breach the law without even realizing it.

As both the central government and state governments must abide by the same law, the GST will completely eliminate this complication and create better tax governance. As a result, after the GST is implemented, the workload of the community of CAs has significantly reduced, making consulting and compliance work considerably simpler.

How GST Can Change Tax Compliance

GST has brought an effective change, which is a heightened emphasis on duty compliance. Businesses before the enactment of the GST needed to navigate distinct duty systems that varied from one state or region to another. Companies with the rollout of the GST are now required to function under a consolidated duty frame.

Regular GST Forms:

Companies must file GST returns regularly, which may be monthly or daily, as per their size and original norms. It requires businesses to track all deals and purchases to ensure precise reporting. The accountants must invest fresh time to ensure that these forms are accurate and submitted promptly to avoid incurring penalties.

Input Duty Credits:

The capability for businesses to reclaim the duty paid on their purchases, known as input duty credits, is the major benefit of the GST. Businesses can take advantage of the same by keeping comprehensive records of all deals and ensuring they retain the applicable documentation for every trade and purchase. The same demand has made the clerk more difficult, but it has also increased its importance. 

Avoiding Penalties:

Businesses in the GST structure must follow norms of due dates and delicacy. Penalties can occur for crimes or skipped due dates. Hence, it is important for businesses to remain alert to filing due dates and to ensure that all the documentation is appropriate. The Compliance now goes beyond just paying fees; it also includes submitting forms accurately and on time.

How have VAT & GST Changed the CA’s Roles and Responsibilities?

In the former VAT case, much of the work was performed, which has consequences in the precious time duration loss. But now with the GST, everything could get done online, which makes work easier and secures time. 

We, professionals, are merely able to operate in one or two states under VAT as separate forms and laws applicable in every state, however, under GST, there would be a single return that gets considered across the board, expanding the area of our operations. 

In the VAT system, we were able to upload the monthly return. It was required to complete the sales and purchase register along with the main return. If there was any discrepancy in the tax credit, they would need to re-do the entire process, which consumes a lot of time. However, in GST, the data is reflected promptly while uploading the sales register of a client.

In GST, for statutory auditors, there is a yearly form where information needs to be entered. In such situations, the auditor is accountable for the information provided for the VAT return. The details should be accurate and should not conflict with the books and the GST return. If any discrepancy is found in the quarterly, it needs to be resolved in the yearly returns of the GST.

Another provision says that a Chartered Accountant or a Cost Accountant can conduct a special audit. Conclusively, CAs and the professionals at work are working as a single window solution.

Read Also: What is The Role of Chartered Accountant in Nation’s Progress

What Are the Opportunities for Chartered Accountants in GST?

Most CAs who are already in the domain of sales tax and other indirect taxes may find it easy to learn the GST procedure, as most of the provisions of the GST are taken from service tax/ VAT/ central excise tax provisions. Here are some of the services of CAs in the GST regime that may add immense value to entities.

#1. Study Impact on GST

There can be seen a positive impact in manufacturing sectors, considering its simplification of taxes, business efficiency for manufacturers, reduced cost of production, and also relief from lengthy assessments. For a few other services, the GST impacts are negative, such as the textile sectors, pharma, media, dairy products, IT, and telecom. Moreover, there has been a constant increase in the prices of jewellery, mobile phones, and credit cards. Therefore, it is suggested that businesses are well aware of the GST penalties and fines after exceeding the time limit for tax liabilities. CAs can help them with so many tax-saving opportunities.

#2. Guide in the Transition Phase of GST

The transition phase of GST could include some important elements, such as identification of eligible credits, modification of contracts/agreements, suggestions for modification of ERPs considering GST requirements, and training of vendors if necessary. If GST would be completely automated and there would be very little manual interaction, ERP deployment could very well be a separate service.

#3. Training of Entities for Compliance with GST

Before GST, there were a lot of hurdles for entities in implementing it. All departments for running a business entity, like marketing, stores, and finance/accounts, were in need to understand the basics of GST. In this situation, CAs were the only professionals who could help them. 

#4. Business & Firm Consultant

After GST implementation, CAs are working as business consultants, following all the GST laws. Earlier, they were just working as tax consultants. Now CAs’ services are expanded as business structuring, tax advice, guiding on the development of SOP (standard operating procedures), etc.

#5. Regular Review / Compliance Assistance of GST

Before GST, CAs were able to review the compliance regularly for businesses to make sure the compliance is according to tax payments, availability of credits, etc. After GST implementation, compliance is the most significant for the assessee for all these elements, including taking deductions. It was an option to launch a similar method where a buyer had the opportunity to credit, but only on the condition of proper reflection of taxes by the seller and complete payment to the department by the seller. CAs have a better opportunity in this regard.

#6. Compulsory Audit by CAs or Cost Accountants

Mandatory audit of books of account for all taxable individuals on completing a fixed turnover is provided under section 42 (4) of the Model GST law. Only CAs or Cost Accountants can manage these audits. This is under the control of the current VAT laws of most states. After the implementation, CAs could take the mandatory audits.

#7. Dispute Avoidance and Resolution

In the beginning, there could be a great deal of GST issues for which the proposed GST council must have a resolution process. There may be a few chances for professionals as a result.

#8. Refunds Certificates

Under the GST system, you can expect refunds significantly faster. On submission of an appropriate application and the required paperwork, up to 80% of the return amount may be sanctioned immediately. Even with the GST law, requirements of refund applications and credit amounts may be necessary, similar to the current Cenvat credit provisions. For CAs, this would mean consistent opportunities.

There may be many more services available the list above is merely an illustration. We must wait and see what new opportunities can emerge once the final GST bill and associated rules and regulations are enacted.

How to Prepare for Client’s Services?

In order to provide GST-related services, the providers should be well-versed in the GST law. Here are a few ways to be updated with the GST-

• Attend a seminar
• Participate in workshops
• Read the provisions of the bare act
• Forming study circles

FAQs for CA After GST Implementation