Operating in Retail TAX  Know how Small Business Growth Summit  Bangalore, September 20, 2009
<ul><li>CHALLENGES </li></ul><ul><li>Applicability of tax to a specific transaction </li></ul><ul><ul><li>Combination of V...
Supply Chain  Manufacturer or productised service provider  Wholesaler / Aggregator (Company Outlet) Wholesaler / Aggregat...
Supply Chain  <ul><li>Refund of Additional Duty of Customs for resellers  </li></ul><ul><li>Inter-State Sale vs. stock tra...
Supply Chain  <ul><li>Forex implications on overseas brands supplying locally  </li></ul><ul><li>Concentration of profits ...
Managing the tax function  <ul><li>Corporate Governance  </li></ul><ul><li>Stake holders and social responsibility </li></...
Managing the tax function  <ul><li>The BIG bang  GST  </li></ul><ul><li>Empowered Committee reaffirms implementation effec...
thank you  [email_address]   +91 . 80 . 4151 6187 www.accretiveglobal.com “ An organization’s ability to learn, and transl...
Upcoming SlideShare
Loading in …5
×

Presentation on transaction taxes for retail or franchising sector

234 views
207 views

Published on

The presentation made at the FRO 2009 - Small Business Growth Summit on Sept 20, 2009 at Bangalore

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
234
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Presentation on transaction taxes for retail or franchising sector

  1. 1. Operating in Retail TAX Know how Small Business Growth Summit Bangalore, September 20, 2009
  2. 2. <ul><li>CHALLENGES </li></ul><ul><li>Applicability of tax to a specific transaction </li></ul><ul><ul><li>Combination of VAT / CST, Service Tax and Central Excise </li></ul></ul><ul><ul><li>Retrospective amendments </li></ul></ul><ul><li>Multi products and locations </li></ul><ul><ul><li>Warehousing & inventory policies </li></ul></ul><ul><ul><li>Differences in the state wise commodity tax laws </li></ul></ul><ul><li>Inflexible contracting terms </li></ul><ul><ul><li>Lead time for delivery </li></ul></ul><ul><ul><li>Supplier / customer demands </li></ul></ul><ul><li>OPPORTUNITIES </li></ul><ul><li>Increased NRV for the products </li></ul><ul><ul><li>Tax savings / mitigations for all players in the supply chain </li></ul></ul><ul><ul><li>Product more attractive to resellers </li></ul></ul><ul><li>Beat the competition </li></ul><ul><ul><li>Passing of tax benefits to end users </li></ul></ul><ul><li>Additional working capital </li></ul><ul><ul><li>Credits, exemptions, refunds etc throughout the supply chain </li></ul></ul>Tax Management
  3. 3. Supply Chain Manufacturer or productised service provider Wholesaler / Aggregator (Company Outlet) Wholesaler / Aggregator (External Partner) E N D C O S U M E R S Retailer (External Partner) Retailer (Franchisee Outlet) Retailer (Company Outlet) Retailer (Wholesaler’s Outlet) Retailer (Consignment Sales) Retailer (Agency Relationship)
  4. 4. Supply Chain <ul><li>Refund of Additional Duty of Customs for resellers </li></ul><ul><li>Inter-State Sale vs. stock transfer </li></ul><ul><li>Franchising opportunities (utilise service tax credits) </li></ul><ul><li>Warehousing activities (utilise service tax credits) </li></ul><ul><li>Service tax on outward movements </li></ul><ul><li>Discounts vis-à-vis FOC </li></ul><ul><li>Storage vis-à-vis rent for exporters </li></ul>Opportunities Challenges
  5. 5. Supply Chain <ul><li>Forex implications on overseas brands supplying locally </li></ul><ul><li>Concentration of profits arising out of Service Tax / VAT credits </li></ul><ul><li>Service tax, Central Excise and VAT on the same transaction </li></ul><ul><li>Import of services and subsequent sale of goods </li></ul><ul><li>Factoring of tax cost into MRPs </li></ul><ul><li>Ineligible - VAT for service providers and Service Tax for resellers of goods </li></ul><ul><li>Utilisation of basic exemption threshold is not always beneficial </li></ul>Opportunities Challenges
  6. 6. Managing the tax function <ul><li>Corporate Governance </li></ul><ul><li>Stake holders and social responsibility </li></ul><ul><li>Right to access information </li></ul><ul><li>Business partners and public </li></ul><ul><li>Ignorance of law is no excuse </li></ul><ul><li>Presumption of culpable mental state </li></ul><ul><li>Steps initiated by the Govt. </li></ul><ul><li>Invoicing methodologies relaxed </li></ul><ul><li>Compliance made easy </li></ul><ul><li>Presumptive schemes of taxation </li></ul><ul><li>MRP based taxation </li></ul><ul><li>Self assessments </li></ul><ul><li>Self declarations in lieu of detailed scrutiny </li></ul><ul><li>GST… </li></ul>
  7. 7. Managing the tax function <ul><li>The BIG bang GST </li></ul><ul><li>Empowered Committee reaffirms implementation effective April 2010 </li></ul><ul><li>Concurrent Dual Structure – State and Central GST </li></ul><ul><li>All other transaction taxes except Customs to be abolished </li></ul><ul><li>Credits across the board – Services vis-à-vis goods </li></ul><ul><li>Inter-State disparities and trade wars to vanish </li></ul><ul><li>Cascading impact on taxation to be completely removed </li></ul><ul><li>Principle of neutrality – uniform % of tax regardless of supply chain distribution </li></ul><ul><li>Simplification – computation, documentation, compliances… </li></ul><ul><li>What to look for? </li></ul><ul><li>Franchising / Retail </li></ul><ul><li>Reductions in the tax cost in the supply chain </li></ul><ul><li>Compliances further simplified </li></ul><ul><li>Complexities involved in multiple products / locations would be eliminated </li></ul><ul><li>Tax differences for goods and services to be wiped out </li></ul><ul><li>Inter-State disparities no longer a worry </li></ul>Look beyond… Franchising / Retail Unified account monitoring - Extension of tax support function to the franchisee / retailers Corporate Responsibility, Uniformity in positions, Economies of scale Demand for centralised compliance
  8. 8. thank you [email_address] +91 . 80 . 4151 6187 www.accretiveglobal.com “ An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage” - Jack Welch

×