July 1, 2017, saw the beginning of a new era in India’s indirect tax structure. The Goods and Services Tax (GST) has now been implemented and businesses need to gear up for the required changes.

Following are the seven things you must complete to make your business ready for the new tax regime:

1. Registration

As per the GST laws, you need to register your business in all states where you supply goods and services. If your business is already registered, you need to migrate to the new regime. Unregistered businesses will also have to register in those states where they supply the goods and services.

2. Modify the information technology systems

All your information technology (IT) systems would have to be updated to issue GST invoices. All customer-related data and tax codes must be integrated into your IT systems to generate the required GST reports. If you need to upgrade your IT systems, consider availing of business loans.

3. Upgrade business processes

Taxes were levied separately on the supply of goods and provision of services. However, GST is levied on the supply of the goods and services both. In addition, there are several procedural modifications, such as self-invoicing for unregistered sellers, credit reversal when consideration is not paid, and more. All these changes make it necessary for you to modify your business processes. You may consider a business loan to make the necessary changes.

4. Amend vendors’ and customers’ contracts

The present indirect tax system did not require a correlation between the location of the service receipt and invoices for these services. However, in the GST regime, the credit pool will be separately maintained in each state. Therefore, the invoice for the services must be received at the same place where credit is eligible. You may need to modify contracts to comply with the GST laws.

5. Determine product prices early

Currently, supply chain partners like retailers and distributors calculate margins on the basis of only value added tax (VAT) being applicable on the sale price. Under GST, there will be new rates applicable, making it necessary to re-compute prices after considering the tax credits. You must determine the overall effect of the new tax regime and make the appropriate pricing decisions.

6. Settle tax credit

You may claim credit for the taxes for inventory and carry forward the accumulated tax credit on complying with certain conditions. If you carry forward your VAT credit balance, you must submit the sales tax declaration form as applicable when you have claimed concessional rate or exemption of Central Sales Tax (CST) on the sales. If you have not submitted these forms, it is important you claim the tax credits in time. You may consider a commercial loan to meet any short-term working capital requirements to overcome any shortfall due to delay in tax credits.

The implementation of GST will affect many businesses, as well as the economy as a whole. Keep the above points in mind to easily deal with this transition.