| Sourcing | Inter-state procurement could prove viable May open opportunities to consolidate suppliers/vendors Additional duty/CVD and Special Additional duty components of customs duty to be replaced |
| Distribution | Changes in tax system could warrant changes in both procurement and distribution arrangements Current arrangements for distribution of finished goods may no longer be optimal with the removal of the concept of excise duty on manufacturing Current network structure and product flows may need review and possible alteration |
| Pricing and profitability | Tax savings resulting from the GST structure would require repricing of products Margins or price mark-ups would also need to be re-examined |
| Cash flow | Removal of the concept of excise duty on manufacturing could result in improvement in cash flow and inventory costs as GST would now be paid at the time of sale/supply rather than at the time or removal of goods from the factory |
| System changes and transaction management | Potential changes to accounting and IT systems in areas of master data, supply chain transactions, system design Existing open transactions and balances as on the cut-off date need to be migrated out to ensure smooth transition to GST Changes to supply chain reports (e.g., purchase register, sales register, services register), other tax reports and forms (e.g., invoices, purchase orders) need review Appropriate measures such as training of employees, compliance under GST, customer education, and tracking of inventory credit are needed to ensure smooth transition to the GST regime |
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