Annual Accounting

PGST Accounting and Compliance

GST rollout will not be just a simple introduction of a new tax. GST implementation will have deep and far reaching consequences on the operations of a business – requiring a total overhaul of the business, finance, financial reporting and accounting systems. As management teams start evaluating these changes, they will also require factoring in changes in financial reporting as well as indirect tax accounting. In this article, we look at some of the major GST accounting and compliance changes expected on GST rollout in India.

Annual Revenue

There might be changes to the methodology for computing annual on implementation of GST. revenue. Under IND AS, excise duty is incorporated in revenue, since it is a production-based tax. Sales tax and VAT is not incorporated in revenue, since it is levied at the time of sales. GST is considered a destination-based tax, which is levied at the point of supply. Hence, GST would not be presented as a part of revenue. As currently excise duty is incorporated in revenue, there might be some volatility in the reported revenue number – even though from an economic viewpoint no important change in operations has happened.