When ever there is a change in the taxation framework, the businessmen needs to bring in changes in their business systems. LBT too comes with changes which are required to be made. I have grouped changes into 2 partsThis post shall be discussing what all changes required to be made in Accounting System.
The major change required is that of Classification. In VAT we all are used to classification of purchases into "regisreted dealers" and "Unregistered dealers" (commonly know as URD) and then further bifurcation into Out of State and Inside state purchases i.e. VAT purchases and CST purchases.
Now with LBT coming into picture, the bifurcation will go deeper as to "Outside City Purchases" and "Inside city purchases" and then "Outside City Purchases" will be further bifurcated into "1% Rate", "1.5% Rate","3% Rate","5% Rate", and so on depending upon which goods you deal in are taxed at what rate.