Company Name: ___________________________________

Mapping and Impact Analysis and Checklist

Date:

Rating summary Person Assigned Target Mandays

A UNDERSTANDING OF BUSINESS

B TAXABLE AND NON-TAXABLE SUPPLIES

C PROCUREMENT OF GOODS AND SERVICES

D OPERATIONAL / ADMINISTRATIVE

E FINANCIAL STATEMENTS REVIEW

F INFORMATION TECHNOLOGY

G REVIEW OF VARIOUS REPORTS

H REVIEW OF AGREEMENTS / CONTRACTS

I ASSESSMENT OF TRAINING REQUIREMENT

J TRANSITION PROVISIONS

A UNDERSTANDING OF BUSINESS
Objective Suggested approach Done?

Review of Articles of Incorporation / Memorandum of Agreement to know

A.1
the objectives of the business
 Review and understanding of present and future business plans to
A.2
ascertain VAT impact

Assessing the business first hand by visit to place of business including

A.3
branches and other fixed establishments

Review of historical financial statements for last 2 years-

A.4
(including upto TB level)

Review of forecast balance sheet, cash flow and income

A.5
statements for 2 years

A.6 Review of product / service data sheets and company profile

A.7 Review corporate structure of organisation

Identifying the places of business, if multi-location presence [Branches

A.8
and other fixed establishment from which goods / services are provided]

Understanding the industry, major competitors and various business

A.9
process as prevalent in the industry

Evaluating the perception of customer / vendors/ related parties on likely

A.10
impact of VAT on business

Understanding various policies in the entity such as retention of money

A.11 from customers and repayment policy, Guarantee / warranty /
replacements

B REVENUE / SALES / SERVICES

Procedure Suggested approach Done?

B.1 Review of Profit of Loss account to ascertain

a. Sale of goods Manufactured / Traded

b. Goods cleared in Designated Zones / Direct exports / GCC

 c. Services provided in State / GCC/ Exports

B.2 Review of treatment of sales return to study implication under VAT

B.3 Review of discount policy in organization and impact under VAT

If the business is service oriented, can it hold on to key talent? Why or why
B.4
not?

Review the client base of the organisation to ascertain VAT implication

B.5
including impact based on place of supply principle in VAT

Identify major customers/clients to trace the realizations to study the

B.6
implications under VAT. Suggestion onchanges/ modifications if any.

B.7 Review of various modes of supplies of goods and services such as:

* Stock transfers / warehouses / related parties / branches

* Samples

* Leasing / rentals

* Supply of services to other branches / related parties

Ascertain impact on sales supply chain / distribution model under VAT law
B.8
Ascertain requirement

Ascertain requirement / non-requirement of various sales / Service offices /

B.9
branches

C PROCUREMENT OF GOODS AND SERVICES

Procedure Suggested approach Done?
C.1 Review of procurement policy of the organization including imports

Review the nature of services and goods procured by segregating the

C.2
expense under following categories:

● Expenditure presently taxed at full rate

● Expenditures presently not liable to tax

● Expenditures related to salaries and obtain percent to total expense

Review whether procurements are made through registered persons in

C.3
State / GCC / and impact under proposed VAT.

Analysing the possibility of suggesting vendors for better pricing and cost
C.4
reduction in VAT.

Review of procurements made under intra GCC / import to study impact

C.5
under VAT

Review the purchase and expense invoices on sampling basis to study the
C.6 impact under VAT with respect to taxations and deductions for smooth
transition
Review of treatment of purchase returns to study the possible impact
C.7
under VAT
Review the foreign currency payments to ascertain impact under VAT-
C.8
Reverse Charge

C.9 Ascertain the possibility of better purchase planning during transition

D OPERATIONAL / ADMINISTRATIVE
Procedure Suggested approach Done?

Review the credit policy of the organisation. This could have significant
D.1 impact on cash flow especially if the policy with vendor and customer is
not synchronised

Review the system of recognising sales / services and

D.2
system of invoicing customers
Review present valuation mechanism adopted and impact
D.3
under VAT on valuation
 Review the services provided free of cost or free issue of
D.4
materials

Review of job work register to identify the process

D.5
outsourced

Review of accounting and billing system (Centralised or

D.6
De-centralised) followed and impact under VAT

E FINANCIAL STATEMENTS REVIEW

Procedure Suggested approach Done?
Review the shareholding pattern of investment by group companies /
E.1
associated enterprises

E.2 Studying the nature of accounts maintained by the organization

E.3 Review of taxes under refund

Review of stocks in trade at all business places including job worker’s

E.4
place and impact on release

F INFORMATION TECHNOLOGY
Procedure Suggested approach Done?

Review and identifying software presently being used at various divisions

F.1
of organisation

F.2 Review system of integration of different software with each other

Review system of integration of data from various business locations

F.3
across GCC/ World
 Review the agreement entered with the software vendor to check policy of
F.4
regular updates, modification of parameters

Review the existing controls established to prevent alteration of information

F.5
in the records and importance of the same under VAT regime

Review of following systems and suggesting changes

F.6
which may be required under VAT

*Customer master process

*Vendor master process

*Tax master process

*Purchase master process

Advising on importance of strong IT system under VAT regime and

E.7 arrangement with IT vendor with respect to modification of tax structures,
requirement of various reports
G. REVIEW OF VARIOUS REPORTS
Procedure Suggested approach Done?

Review of following to ascertain the issues pertaining to indirect taxes and

G.1
level of compliance:

* Internal Audit Reports

* Others

G.2 Review of MIS reports, if any

H REVIEW OF AGREEMENTS / CONTRACTS

Procedure Suggested approach Done?

Review of agreements to identify important clauses with customers or

H.1
vendors which could have major impact under VAT

Advise on major implications and precautions to be taken considering the

H.2
transition provisions under VAT

I ASSESSMENT OF TRAINING REQUIREMENT

Procedure Suggested approach Done?

I.1 Understand the level of knowledge among various departmental’s heads

If the distribution channel is guided by tax inefficiency under present tax

regime, the extent to which anomaly is being rectified in proposed VAT.
I.2
Whether the change necessitate the need to alter/modify/change the
supply chain or distribution model presently being followed

Understanding requirement of training for vendors /

I.3
contractors
J TRANSITION PROVISIONS
Procedure Suggested approach Done?

Review of registrations obtained for various places of business and status

J.1
to ascertain impact under VAT

Review of systems followed with respect to goods sent for job work and
J.2
impact under VAT

Review of systems followed with respect to finished goods received back

J.3
from customers and impact under Vat