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.
Along with changes in the way business run in India, GST is also going to impact the life of the professional chartered accountant in a manner of some difficulties and convenience.
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 GST implementation.
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 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 at 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 government 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.
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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 basis return. It was required to complete the sales and purchase register along with the main return. If there was any discrepancy in tax credit, they 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 is needed 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 GST return. If any discrepancy is found in the quarterly, they are needed to be resolved in yearly returns of the GST.
Another provision says that the Chartered Accountant or a Cost Accountant can conduct a special audit. Conclusively, CAs and the professionals at the work are working as a single window solution.
What Are the Opportunities for Chartered Accountants in GST?
Most CAs who are already in the domain of sales tax and other indirect tax 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 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 of 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 CA’s 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 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 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