GST Reconciliation Archives

GST council begins review of rates, items to raise revenue

December 4, 2019 admin Comments 0 Comment

The government has begun discussions with states for a possible revamp of the goods and services tax (GST), which may include bringing a few exempted items under the levy while reviewing the rates and the cess on all goods and services, as part of an exercise to shore up revenue.

In a letter to states, the GST council has given a full menu of options and suggested their feedback ahead of a meeting of ministers expected before the end of the month. The move comes at a time when tax collections have been hit, which authorities believe is due to a massive reduction in rates. The RBI had recently estimated that the effective GST rate in India has come down from 14.4% in May 2017 to 11.6% now.

Officials said this has robbed the government of potential revenue of around Rs 2 lakh crore annually and also increased compensation payout to states as the Centre had assured them to make good on any “losses” in case collection growth was less than 14% a year. The economic slowdown, along with tax leakage, has added to the government’s woes and the growth has been lower than anticipated despite an expansion in taxpayer base.

“The effective indirect tax rate on many products in the pre-GST era was around 25%, which has reduced to 18% in GST. In the absence of a significant increase in volumes, there would be an impact on revenues,” said M S Mani, a partner at consulting firm India.

Another tax consultant said the services sector revenue has not seen a significant expansion in the base as investments have slowed down. As a result, the GST council has asked states to review the list of products that are currently exempted, which includes some of the items that were earlier subject to tax.

With states complaining about the Centre holding up compensation, the government is also seeking a review of the items that can face the levy apart from looking at the possibility of enhancing the levy on existing items like tobacco, soft drinks and cars.

With the compensation cess kitty eroded, states have little choice but to either agree to settle their bills over a longer period than the five years that was provided for or agree to higher cess or expanding its scope, said officials.

Source: Times-of-India

How the Implementation of GST has impacted the Enterprise Resource Planning Systems

How the Implementation of GST has impacted the ERP – Enterprise Resource Planning Systems

October 31, 2019 admin Comments 0 Comment

It has been quite a challenge for businesses to switch over to the GST system initially. Those players that had an effective action plan for their ERPs to migrate into the GST regime were the winners of this makeover. Data migration is a daunting task that impacts the master data and the transaction data alike and needs the deployment of adept resources. For this reason, it is essential to evaluate and recognize the areas in the ERP system which could be affected by the GST implementation.

Some of the Key Functionalities that are affected Under the GST System

Here are some of the functionalities that are affected by the implementation of GST.

Master Data Details – The GST law puts forward rules regarding the tax charges, location of supply of goods and services, and the time of supply. The tax rates concerning the different goods and services also vary as per these rules. To deal with such scenarios, there arises a need to re-enter the master data which includes the client’s billing and shipping addresses, inventory and warehouse details, item masters, etc. In fact, this has streamlined the different tax procedures as well as the reporting process in the ERP system

Chart of Accounts – Previously under the VAT system, the companies that sold goods and offered services at the same time needed to have separate account codes for transactions related to Value Added Tax (VAT) as well as Services Tax. Further, these account codes are combined under the GST system. It was mandatory for the taxpayers to carry forward the tax credit balance from the previous accounting codes to GST account codes in order to maintain the tax credit paid under the earlier system. Later on, the reconciliation of the same was made possible.

Reporting and Workflows – Another key change that occurred with the implementation of the GST system was related to the reporting framework and workflows. The already existing reports formatted as per the indirect tax system under the VAT regime have become out-dated and those must be re-designed according to the GST law. The merging of the tax data with the ERP system is susceptible to failure as it acts as a single point for the entire reporting process. Hence there arises the need for the implementation of more robust workflows.

Tax Rule Engine – A majority of the ERP systems maintain a separate tax rule engine which serves as the master repository of all the information available inside the system. This consists of details regarding tax jurisdiction, tax compliance, tax rates, and reporting. A lot of re-engineering has gone into developing this tax engine as per the GST system, and it is still undergoing up-gradation on a regular basis.

Requirement of a Smart Reconciliation Tool for the ERP systems – At present, as the amendments are not made in the returns, but would be reflected only in the next month returns, it is essential to have a robust reconciliation tool implanted in the concerned ERP system in order to track changes so as to evade duplication in data. Further, the GST system is all about matching data between numerous returns like GSTR-2A with GSTR-3B returns, GSTR-1 with GSTR-3B returns, etc. To handle this situation, it requires a powerful tool that can offer details about the mismatch in the reports, recommend actions, and circumvent duplicate entries in the books. In fact, matching entries in books and returns is another strenuous task that the businesses have to encounter if the tasks are not automated. A comparison between GSTR-2A return and the purchase register is quite important, as it helps the taxpayer to claim 100% of the ITC (Input Tax Credit) for which he is eligible.

Communication Tool for Vendors – The adoption of AI and Machine Learning technologies can be of great help to the larger enterprises in managing the vendor accounts easily. As the GST regime involves uploading the invoice details on to GSTN and matching GST returns between the recipients and suppliers of the supply transactions, it may include regular tracking of vendor ledger accounts using the GSTR-2A return, which is auto-generated on the GST portal. Developing an automated communication tool for vendors which is embedded within the ERP system is the need of the hour that each taxpayer might be looking forward to. This is because it guarantees the timely claiming of ITC and avoids the last minute and later disputes with the vendors regarding any mismatches.

Looking into the Future

Making your organization GST ready could be compared to the implementation or re-implementation/up-gradation of an ERP system from a lower version to a higher one. In fact, it is not that simple as affecting changes in invoice tax calculations; rather, it requires a complete review of the business processes as well as makeovers. Though it sounds complicated, it is not essentially so if the fundamental concepts are understood well.

There are major changes involved in the functioning of the businesses following the GST wave. In fact, with the introduction of GST into the system, there is the same tax structure all over India, unlike it was previously when the businesses had to consider many aspects pertaining to the different states.

It is a well-known fact that businesses flourish when there is a well-structured process in place, along with proper reporting and accounting systems. Further, IT plays an important role in running a business successfully. Following the implementation of GST, a revamping of the entire business processes has become mandatory.

Moreover, as the frequent changes in the law are becoming a tough thing for the businesses to handle and interpret, it would be necessary to conduct an impact analysis on their business processes and embed the same in their ERP systems. A major challenge is to make sure that the software is configurable and flexible to deal with such requirements so that the enterprises can implement the changes without any interruptions.

In short, making necessary changes in an ERP environment while syncing with the GST system is an intimidating task which is to be dealt with carefully to run the business smoothly.

Importers do not need state-wise registration under GST regime

June 26, 2019 admin Comments 0 Comment

Importers with godowns or those which store goods at customs warehouses in different states got relief from the advance authority of ruling (AAR) under the goods and services tax (GST) regime.

The AAR, Maharashtra, in two recent rulings, said that these companies do not need a separate registration in each state and that a registration where their headquarters are located would be enough. These firms can sell products in different states and raise invoices against their head offices, it ruled.

Harpreet Singh, a partner at KPMG, said in one of the cases, the petitioner — Aarel Import Export —noted it has a head office in Mumbai and is exporter and importer of products such as black matpe, toor whole, pet coke, and agarbatti.

The applicant wished to import coke from Indonesia at Paradip port in Odisha. The item would be stored at Customs warehouse at the port. It wished to sell coke to customers in Odisha from the said warehouse but wanted to clear the bill against Mumbai office by paying customs duty, if any, and IGST.

The AAR held that no separate registration is required in Odisha. It also held that the place from where the applicant makes a taxable supply of goods shall be his location — Mumbai office in this case. Since the applicant does not have any godown or place of business in Odisha, it can clear goods on the basis of an invoice issued by the Mumbai headquarters. It also stated that the applicant can mention the GSTIN of Mumbai office in the e-way bill and dispatch place as Paradip Port.

In the other case, petitioner Gandhar Oil Refinery (India) Ltd said it carries out manufacturing activity from its plants located at Silvassa and Taloja in Maharashtra. The company is engaged in the trading activity of non-coking coal and carrying out businesses from many states. Here also, the AAR held that the applicant need not take separate registration in each state where the goods are imported and stored in godowns.

Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: Business-Standard.

Keeping it simple: Reconciliation of GST data in 5 steps

December 4, 2018 admin Comments 0 Comment

Reconciliation under Goods & Services Tax (GST) is about matching the data filed by the supplier with those of the recipients and recording all the transactions that have taken place during that period. The reconciliation process ensures that no sales or purchases are omitted or wrongly reported in the GST returns.

The taxpayers must reconcile their data on a regular basis with that of the vendors to claim eligible Input Tax Credit (ITC). The process of reconciliation is simple, but can be time-consuming, as the taxpayers are required to continuously keep an eye on any discrepancy or mismatches that may affect the ITC claim.

This article will bring about clarity to an otherwise tedious process in less than 5 easy steps.

1. Under the reconciliation process of GST for the financial year (FY) 2017-18, the taxpayers are required to mandatorily file all the periodic GST returns. Even if the due date for a particular GST return is missed, it should be filed along with the interest or the late fees as applicable. As long as the GST returns are not filed, matching and reconciliation process will not take off. The taxpayers need to update their books of accounts and align the tax returns accordingly. Unless and until all the GST returns are filed, the taxpayers won’t be able to claim adequate ITC.

2. Furthermore, the taxpayers should identify the mismatches and correct the relevant entries in the books of accounts. They should also amend these details in the coming GST return filing period. GST laws do not allow for revision of tax returns filed in the previous periods. However, it does allow for filing of the corrected entries via an amendment return in the next periodic return. These amendment entries should be filed in GSTR 1 & GSTR 3B, accordingly.

Make sure you carefully match the purchase register with GSTR 3B (uploaded month wise) and with GSTR 2A details (uploaded by the supplier). It is important to streamline the books of accounts, the GSTR-3B return, and GSTR-2A form to fully avail the ITC on the relevant purchases; otherwise, the taxpayer will lose ITC claim and will end up paying extra taxes.

3. The congruity between the books of accounts and the GST returns is crucial for claiming ITC. Additionally, taxpayers while claiming ITC on purchases should keep a check on taxes paid under the reverse charge mechanism. However, a taxpayer can only avail credit of taxes paid under reverse charge mechanism only if the goods and/or services are used or will be used for purpose of business.

4. Communication is the key, especially amongst the vendors and customers. This coordination results in uniform reporting of the details in the GST returns. Chances of mismatches, omission or incorrect entries are reduced when the suppliers’ and the recipients’ synchronize their details and then file GST returns. It is also very important to identify the non-compliant vendors, interact with them, and resolve the queries; this will help the recipients maximise ITC. Now, advanced reconciliation software can help reduce this communication gap between the suppliers and the recipients. These software enable the users to send a reconciliation mismatch report to the vendors or suppliers to resolve any issue arising out of it.

5. Lastly, the taxpayers should report all the rectified sale or purchase transactions of the FY 2017 -18, for the September returns. This September 2018, the returns are to be filed by 20 October 2018. This is the last chance for the taxpayers to report and correct all differences filed in tax returns of FY 2017-18.

Any taxpayer who has not claimed ITC in the preceding months can avail the same in the subsequent months, but not later than the filing of annual return i.e GSTR -9 or filing of GST returns for September month of the subsequent financial year, whichever is earlier. Any amendments or changes to the previously filed returns can be done within the same timeline.

GST reconciliation is a recurring event, it must be performed periodically to claim maximum credit and to avoid mismatches on a larger scale. The taxpayers shall communicate the queries with his recipients or vendors at the earliest and file error-free returns.

XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Source: Economic Times.India
Author: Archit Gupta

Simple Guide of GSTR 9 with Easy Online Return Filing Process, Eligibility & Rules

May 15, 2018 admin Comments 2 comments

The GSTR 9 is an annual return form to be filed by the taxpayer once a year with all the consolidated details of SGST, CGST and IGST paid during the year. Here, XaTTaX briefs all the details, rules and regulations for GSTR 9 online filing along with step-by-step compliance procedure.

Get to know all the related information of GSTR 9 annual filing procedure, format, eligibility, and rules along with proper images (screenshots) and filing guidance at each and every step.

For any query and question relevant to GST, ask our experts and professional CAs which will resolve all your doubts as soon as possible. Here we are going to discuss the complete GSTR 9 form under the goods and services tax.

What is the Meaning of Filing GSTR-9?

GSTR 9 is meant for a return form which is required to be filed once in a year by the regular taxpayers concerning GST regime. It is further categorized in IGST, SGST, and CGST. Under the heads, the taxpayers fill information about supplies made and received in a year separately. It is a consolidated form which comprises the details mentioned in the monthly/quarterly returns in a year.

Who is Required to File GSTR-9?

All the registered taxpayers are required to file GSTR 9 under GST regime. However, following persons are not required to file GSTR 9

Casual Taxable Person
Input service distributors
Non-resident taxable persons
Persons paying TDS under section 51 of GST Act.

What are Different Sorts of Annual GST Returns under GSTR 9?

Different kinds of annual return under GST:

GSTR 9: The regular taxpayer who files GSTR 1, GSTR 2, and GSTR 3 are required to file the GSTR-9.
GSTR 9A: The composition scheme holder under GST is required to furnish GSTR 9A.
GSTR 9B: All the e-commerce operators who have filed GSTR 8 are required to file GSTR 9B in a financial year.
GSTR 9C: The taxpayers whose annual turnover cross Rs. 2 crores are required to file GSTR 9C in a financial year. All those taxpayers are needed to obtain the accounts to be audited and furnish a copy of reconciliation statement of tax already paid, audited annual accounts and tax payable according to the audited accounts with GSTR 9C.

What is the Due Date for Filing GSTR 9?

GSTR-9 is required to be furnished on or before 31st December in respective financial year bracket. For example, if you want to file GSTR 9 in the this FY 2017-18, then the last date to file the return form will be 31st December 2018.

Penalty Norms When you Miss the Due Date of GSTR 9 Filing

The late fee of one hundred rupees for every day during which such failure continues will be levied subject to a maximum of an amount deliberated at a quarter percent of taxpayer turnover in the respective Union territory or state.

Which Kind of Detail is Required to Mention in GSTR-9?

GSTR 9 is divided into 9 sections:

GSTIN: A state-wise PAN-based 15-digit Goods and Services Taxpayer Identification Number(GSTIN) is provided to each registered taxpayer. GSTIN is auto-populated when furnishing the return form.
Legal Name: When the registered taxpayer log-in to the common portal, the legal name of the person is auto-populated.

- 2C. Taxpayer Liable To Statutory Audit: Every registered taxpayer whose composite turnover during a financial year surpasses Rs. 2 crore is required to get his accounts audited as mentioned under sub-section (5) of section 35 and he/she shall file a copy of audited annual accounts and a reconciliation statement, duly validated, in FORM GSTR-9C, electronically using the common portal either through a Facilitation Centre informed by the Commissioner or directly.

Date of statutory Audit: This head takes the date of the statutory audit.
Auditors: The taxpayer is required to mention auditors’ names who have audited the accounts of the entity.
Details of Expenditure: Information about goods and services bought in a financial year is required to mention here mandatorily. These details are required to be mentioned along with the appropriate HSN/ SAC codes and taxable worth of such goods and services. This information is provided in GSTR-2. Further, the relevant information is categorized in following sections:

- The total value of purchases on which ITC availed (inter-State)
- The total value of purchases on which ITC availed (intra-State)
- The total value of purchases on which ITC availed (Imports)
- Other Purchases on which no ITC availed
- Sales Return
- Other Expenditure (Expenditure other than purchases)

Total value of purchases on which ITC availed (inter-State)

Details of income: Details of income accommodates all the information of supplies and sales made in a relevant financial year. This information is also mentioned by the taxpayer in GSTR-1. It is categorized as follow:

- The total value of supplies on which GST paid (inter-State Supplies): Composite worth of supplies on which IGST is applicable in respect of inter-State Supplies
- The total value of supplies on which GST Paid (intraState Supplies): Composite worth of supplies on which CGST and SGST are applicable in respect of inter-State supplies.
- The total value of supplies on which GST Paid (Exports): Composite worth of supplies made under goods and services tax on which IGST is paid in respect of exports.
- The total value of supplies on which no GST Paid (Exports): It comprises the worth of goods on which no GST is applicable in respect of exports.
- Value of Other Supplies on which no GST paid: It takes the information of the supplies made under GST on which no GST is paid.
- Purchase Returns: It includes the information of purchase return done in a financial year.
- Other Income (Income other than from supplies): Other income made in a financial year which is not mentioned in above points are required to be mentioned here.

Details of all supplies and sales made during the year needs to be provided here. Such details are also mentioned in GSTR 1

Return reconciliation Statement: After filing the details, the system will match with the transactions automatically and will calculate tax liability applicable in respect of the tax paid. The details such as interest, amount of tax difference and penalty are auto-populated by the system. It categorizes the relevant details in following fields:

Return reconciliation Statement

Other amounts

GSTR 9: Other amounts

Profit as Per the Profit and Loss Statement

Profit as Per the Profit and Loss Statement As soon as particulars are furnished appropriately, the assessee is required to sign digitally either via a digital signature certificate (DSC) or Aadhaar based signature verification to authenticate the return details.