GST Billing kerala

Matching & Reconciliation under GST – Importance & Procedure

GST Reconciliation and Matching are not new to any taxpayer. This has been prevalent in earlier VAT and excise regime too. Then, the matching of data between the books of accounts and tax returns was an easy task for many business organisations. If the tax department on processing returns found some discrepancy, communications would be sent to the taxpayer and accordingly further scrutiny and audits would be carried out by the authorities.

But under GST, this process has gained significance as the sanity of the Input tax credit utilised by businesses is monitored by the GST authorities regularly. Also, the taxpayers must on regular basis reconcile their data every month with the data declared by its vendors too. The return filing and processing are semantically automated and the GST returns are inter-linked.

1. What is Matching & Reconciliation under GST?

Following Mismatches can be noticed by taking up following Matching and Reconciliation exercises:

• Differences between the amount of credit shown in GSTR- 3B and the GSTR 2A or/and
• Discrepancies between GSTR-3B and GSTR-1 or/and
• Differences in the provisional credit claimed and actual credit that is claimable. This situation arises usually during transition stages.

Any differences noticed between these returns will lead to scrutiny notices being issued to the taxpayers.

There can be several causes for mismatches. Popular ones are:

1. The vendor has declared liability but credit is not availed in GST returns: Such credits should be availed at the earlier of due date of September returns or Annual returns.
2. The vendor has not declared liability on supplies made but businesses have availed credit on such procurements in the GST returns: Businesses should follow up with the vendor to ensure that the liability is declared. Else, risks of such credits being disallowed may arise.
3. Mismatch between liability declared by the vendor and credit availed: The reasons for differences should be identified and reconciled appropriately (e.g. by issuing debit notes/credit notes etc) before 30 September, 2018.
4. Mistakes in the details furnished: There can be mismatch in the fields such as GSTIN of the supplier/recipient, number and date of the invoice/debit note etc. Make amendments in the GST returns of the month following the relevant month when mistakes were committed.

Reconciliation under GST although seems to be a simple process due to automation but still consumes lot of time and resources, as taxpayers are required to continuously communicate with vendors for making amendments in the returns filed by them or even to track. It would not tasking for businesses having a handful of transactions to monitor. However, in case you have thousands of invoices in a month, then even a single digit percentile will be a significant volume. Therefore, one must reconcile the returns data on regular basis under GST.

2. Why is GST Reconciliation required?

There are several reasons why reconciliation for GST returns data is required by businesses under GST.

1. As per the new proposed model of GST returns by GSTN, taxpayers will be able to claim ITC only if the invoice is present as a part of their 2A data or vendor data. Owing to this, taxpayers will now need to do a reconciliation wherever the ITC as per their purchase register and 2A data is not matching.

2. GST returns are filed monthly or quarterly basis. Finally, after the financial year gets over, annual returns must be filed before the 31st December of subsequent FY. This would need consolidation of the data reported over the FY. In order to ensure the correctness of the declaration made and to avoid duplications, taxpayer must reconcile the data, then consolidate the values and make the declaration.

3. Certain deadlines are stipulated in the GST laws for making amendments to GST returns data or to claim ITC. As per CGST Act, following actions must be taken at the earlier of due date of the September ,2018 GST returns or Annual returns:

• Claim eligible ITC against any invoice raised in FY 2017-18.
• Any apportionment of ITC belonging to FY 2017-18, as eligible and ineligible not made earlier must be affected before the deadline.
• Declare CDNs issued against any Invoices raised in FY 2017-18.
• File Amendments to information reported in the GST Returns filed between July 2017 to March 2018.
• Taxpayers who opted into Composition scheme or the vice versa current year 2018-19, may make amendments to the information reported in the GST returns filed in FY 2017-18 prior to conversion.

3. How to do GST Reconciliation?

To start with, Reconciliation must be done within the GSTIN and then must be taken to the PAN level. Reconciliation must be done across months for the entire FY 2017-18. Not just that, but the amendments made to GST returns of FY 2017-18 in the CY 2018-19 must also be considered.

Input tax credit (ITC) is the most important component of your GST returns as it holds greater relevance when compared to any other component of the GST returns. The stage at which the sanctity of claims were checked in the previous tax regime is no longer the same as the current GST regime. The genuineness can be confirmed by a taxpayer now at a stage of filing GST returns( vis-vis with GSTR-2A & take action). Earlier, tax authorities usually carry out this check while processing the returns.

Hence, the vendor-wise reconciliation must be done on a regular basis. If not done, taxpayer must consider doing it before filing September 2018 GST returns. This will help identify and declare any unclaimed ITC within the deadline.

• Reconcile transitional ITC
• Claim ITC belonging to FY 2017-18, if not claimed earlier or reverse the ineligible ITC, if not identified and done earlier.
• Match Table of exports at 6A of GSTR-1 vis-a-vis Corresponding declaration in GSTR-3B
• Matching Table of exports at 6A of GSTR-1 vis-a-vis details of shipping bills submitted on ICEGATE
• Comparison between Annual Income Tax Return with Annual GST return

Declaration of Turnover from Business(at PAN level)

• Comparing Purchase register vis-a-vis GSTR-2A for the entire year 2017-18
• Compare GSTR-1 vis-a-vis GSTR-3B
• To Compare the ITC in GSTR-3B vis-a-vis GSTR 2A  for the entire year 2017-18

4. What are the major issues with Reconciliation?

The primary concerns of the taxpayer revolve around the following:

Am I:

• Being Tax compliant in accordance with GST and it’s claiming of ITC?
• At fault anywhere and hence the possibility of getting notices later?
• Missing out on possible working capital by claiming lesser than what I should be claiming?
• Who are the suppliers from whom I am getting the most amount of pain reconciling and how to make it easier for them and for myself?

The major issues with the Reconciliation under GST between GST returns are:

• The invoice number that the purchaser has recorded does not match with seller’s invoice received in 2A. Both follow a different convention.
• The purchaser may work in multiple states, and the seller has raised invoice with another GSTIN/HQ GSTIN instead of the actual purchaser GSTIN. In this case it might not reflect completely at a GSTIN level.
• The invoice date by purchaser doesn’t match with seller. Difference because of date of recording the invoices is different at both places. Mostly purchaser at fault here as they should’ve entered the same date as in Sales invoice.
• The purchaser and supplier have recorded invoices in different return periods.
• Invoice value from Supplier and Purchaser differs by a minor value because both parties have different conventions of rounding off.
• The invoice value differs at supplier and purchaser’s end in case a CN/DN is issued and it fails to match in a recon row.
• When invoice number and date do not match while only the invoice value matches between two parties.
• There are multiple invoices between a purchaser and supplier where every invoice is of same value at different dates and one of the parties has recorded invoices higher than the other. This happens in case of regular fixed supply business.

One of major challenges in doing a reconciliation is that both parties involved may have different nomenclature of storing the invoice numbers, while the implementation has a hard match around invoice number.

5. How to choose a tool or software to reconcile faster and ensure 100% compliance?

A technological solution which can solve for all of the major pain points discussed above. This will add a lot of value to the business owner.

Certain features that one must find in a powerful reconciliation tool or system for matching and reconciling GST returns data are:

• The tool should be able to handle a massive amount of data.
• It should make it easy for the business owner to get data into the system for reconciliation and also take it back to his ERP post- GST reconciliation. A seamless integration here would help. It should be able to get the data into the reconciliation system from any kind of source – ERP, Excel, bill books, etc.,
• It should be able to provide deep reporting and insights which can help answer the pain points above.
• Overall, it should also make the whole process month over month seamless and largely efficient that the business owner does not feel a burden.
• It should allow for easy data sharing and collaboration between the business owner and his accountant(s).
• Given the Government GST rules might keep changing over time, the system should have the ability to evolve fast and in-line with Govt. changes. This will abstract the real problem away from the business owner and make it still seamless for them.
• It must be extremely intelligent to handle any case of missing/wrong information. It can be wrong dates, wrong invoice numbers, missing items, wrong tax rate, wrong sale value and a lot more. The system should be able to provide the most effective reconciliation in all such scenarios.
• The system should be real-time and proactive. A seamless integration to bring the invoice for reconciliation and real-time automatic application of pre-defined rules will help.
• Proactive reminders and automatics to reduce human intervention will also make the system more efficient.

ClearTax GST offers the most powerful and Advanced Reconciliation Tool that comes packed with all the above discussed features and intelligence to auto-identify, match entries and assures 100% ITC claimed. Some of its tools are:

• GSTR-3B vs GSTR-1 Tax Comparison Report

Compares GSTR-3B and GSTR-1. Gives a graphical representation as well. This enables clients to understand the difference in the tax liability which helps clients avoiding penalty or Notice from GSTN

• GSTR-3B vs GSTR-2A ITC Comparison Report :

Compares GSTR-3B and GSTR-2A. Gives a graphical representation as well. If ITC is claimed in excess, this can be identified here for each month. Thus ensuring that the clients are prepared for any notice that comes their way

• Monthly Tax and ITC summary Report :

Month on Month view for the top management on the tax paid and ITC taken by each of the GSTINs.

• Advanced Reconciliation Tool :

1. Download multi-month GSTR-2A in a click – Enabling all clients to start reconciliation of their 2A and purchases by pulling complete financial year’s 2A report.
2. Intelligent and Smart Rules – ClearTax Recon uses intelligent and smart rules for you to get suggestions on what could be reconciled without taking much effort in looking for. Helps you do recon faster and easier.
3. Claim Max ITC – Use ClearTax to claim 100% ITC.
4. Four buckets in ClearTax GST to identify data match, mismatch type :

• Matched

Shows in this section when purchase invoices uploaded by you and GSTR-2A data downloaded from the GSTN portal matches based on default and suggestions from ClearTax

• Mismatch In Values

Shows in this section when purchase invoices uploaded by you and GSTR-2A data downloaded from the GSTN portal doesn’t match which is highlighted in red on the software

• Missing In My Data

Shows in this section when you have not uploaded purchase invoices but data is present on 2A side

• Missing In Supplier Data (Not In 2A) My Data

Shows in this section when you have uploaded purchase invoices but data is not present on 2A side

Best Billing software Kerala

What is GSTR 1?

GSTR 1 is a monthly return of outward supplies. Essentially, it is a return showing all the sales transactions of a business.

Who needs to file the GSTR 1?

Every business registered under GST, will have to file the GSTR 1.

What is the due date for filing GSTR 1?

• GSTR 1 for the month of July 2017 is due on 5th September 2017.
• GSTR 1 for the month of August 2017 is due on 20th September 2017.
• Starting from the month of September 2017, GSTR 1 is required to be filed by the 10th of the next month (i.e., 10th October for the month of September, etc.).

Contents of the GSTR 1 form

1. GSTIN of the business.
2. Legal name of the business.
3. Aggregate turnover in the last financial year.
4. Taxable supplies/sales made to registered persons.
5. Taxable supplies/sales made to unregistered persons who are outside of the base state and exceeding Rs 2.5 lakhs (i.e., inter-state sales to unregistered persons, for more than Rs 2.5 lakhs).
6. Zero rated and deemed export sales.
7. Sales made to unregistered persons not covered in section 5 above.
   1. All sales made through an e-commerce operator.
   2. Inter-state sales to unregistered persons upto a value of Rs 2.5 lakhs.
8. Nil rated, exempt and non-GST supplies – Supplies which are exempt and not covered in the above sections.
9. Amendments in taxable sales/supplies made to registered businesses in the previous months.
10. Amendments in taxable sales/supplies made to unregistered businesses in the previous months.
11. Details of advances received or adjusted during the month, from the customers.
12. HSN-wise summary of outward supplies.
13. Documents issued during the month (containing the serial numbers of the invoices, credit notes and debit notes, issued during the month).

Where should one file the GSTR 1 return?

GSTR 1 has to be filed on the GST portal . The government has provided an offline utility to fill the GSTR 1 return and upload it on the GST portal. It can be downloaded from the following link:

GSTR1 utility

One important point to note, is that the GSTR 1 form once submitted, cannot be revised. You can modify the form by amending details in the next month.

GST Billing Software Kerala

Let’s have a look at a short summary of GST’s impact on small businesses in India:

DISADVANTAGES

All invoices from B2B transactions have to be captured and compared to the corresponding party’s records. If there are any discorcondances, input tax credit cannot be claimed.

Implementation will be tough on businesses as they will have to learn on the go. Returns need to be made more often and cash flow might have suffer. GST software will be the key in their day to day operations.

While logistics will get easier for companies that sell goods, businesses in the service sector will suffer more. Currently, service providers need to register once at the central level while GST will require registration in every state such a business operates.

ADVANTAGES

No more tax cascading and applying tax at the total value of the product on each stage of the supply chain. Tax will be applied to value addition at each stage and businesses will be able to claim input tax credit.

Taxes for both Centre and State will be collected at the point of sale and charged only on the manufacturing cost. As prices are likely to come down, consumption will increase, resulting in more production and helping businesses grow.

Interstate movement of goods will get easier. All businesses that need to move goods around the country currently need to keep multiple warehouses in order to reduce tax prices. This won’t be necessary as GST will remove entry state taxes.

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The Goods and Services Tax

The constraints which any regulatory agency has in fixing the goods and services tax (GST) rates in a country include the fact that it should be low enough to ensure compliance as well as not cause inflation, and high enough to generate revenue for the government. The concerns which led the GST Council to initially prescribe multiple rates was primarily to generate the same revenue as before, and in that light, keep the effective indirect tax rate on the commodity as close as in the previous jurisdiction. Rate rationalizations over a period of time have tried to bring down the rates in sectors to boost economic activity and move from a high rate of 28% to 18% for most commodities.
In the most recent rate rationalization, the highest tax bracket of 28% has been rationalized further with rates on daily-use items like perfumes, cosmetics, toiletries, hair dryers, shavers, mixer grinder, vacuum cleaners and lithium-ion batteries, being lowered to 18%. For the number of consumer durables like a refrigerator, washing machine, small screen TV, storage water heaters, paints and varnish, the rate has been reduced from 28% to 18%. Then some products like sanitary napkins have been exempted completely while for others like handmade carpets, the rate has been reduced to 5%.
The impact of the reduction of tax rates would be to reduce the price of these commodities. Since most of these are consumer items, this will impact household budgets in a positive way. However, where there is a complete exemption, those goods will not be able to enjoy the credit of input goods and services, which will become a cost and hence, the reduction in prices may not be commensurate with the percentage reduction in GST rates.
The impact of this rate rationalization would be multi-fold. There will be a revenue loss to center and states because of these rationalizations. The total reduction would be roughly 35% (10% of 28%) of the GST collected on these items. However, given that these cuts would need to be passed on to the customer, due to anti-profiteering provisions, the demand and hence the sale of those commodities would increase, following a simple demand-supply curve. Individual commodities may have varying elasticities and the quantum might vary, yet, overall sales of these items would increase. This will give a boost to economic activity in the country leading to an increase in GST and income tax revenue from other sources. For example, a factory starts manufacturing more products, it may need more contract labor, more supply for canteen services, may be hiring more vehicles to ferry and hence, more GST on these supplies. Similarly, paints are a major component of the capital expenditure by government and by corporates and individuals.
A number of items still remain within the 28% bracket, including air conditioners, certain vehicles, engines, etc. The rate structure in the next few years should move towards lower rate brackets, minimum exemptions and if any industry needs to be really benefitted in respect of a particular sector, then instead of exemption, either the goods need to be zero-rated or a minimum rate should be levied to recover the credits accruing in the cost.

best billing software in kerala

1. What is GST Return?

A return is a document containing details of income which a taxpayer is required to file with the tax administrative authorities. This is used by tax authorities to calculate tax liability.

Under GST, a registered dealer has to file GST returns that include:

• Purchases
• Sales
• Output GST (On sales)
• Input tax credit (GST paid on purchases)

To file GST returns, GST compliant sales and purchase invoices are required. You can generate GST compliant invoices for free on ClearTax BillBook.

2. Who should file GST Returns?

In the GST regime, any regular business has to file two monthly returns and one annual return. This amounts to 26 returns in a year.

The beauty of the system is that one has to manually enter details of one monthly return – GSTR-1. The other return GSTR 3B will get auto-populated by deriving information from GSTR-1 filed by you and your vendors.

There are separate returns required to be filed by special cases such as composition dealers.

3. What are the types of GST Returns?

Here is a list of all the returns to be filed as prescribed under the GST Law along with the due dates.

3.1. Any regular business:

As per the CGST Act ( Note : subject to change by Notifications /orders)

Return Form	Particulars	Interval	Due Date
GSTR-1	Details of outward supplies of taxable goods and/or services affected from July 2018 to March 2019 ( Taxpayers whose turnover is more than Rs. 1.5 Crores in previous year)	Monthly*	11th of the next month**
GSTR-2	Details of inward supplies of taxable goods and/or services effected claiming input tax credit.	Monthly*	15th of the next month (Suspended now )
GSTR-3	Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax.	Monthly*	20th of the next month
GSTR-9	Annual Return	Annually	31st December of next financial year*
GSTR-3B	Return for the months of up to March 2019	Monthly	20th of the next month

** Details of outward supplies of taxable goods and/or services affected till June 2018 will be 10th of the next month.

** Taxpayers whose turnover was less than Rs. 1.5 Crores in the previous financial year has the option to file a quarterly GSTR-1 by end of the next month affected July 2018 to March 2019.

3.2. A dealer opting for composition scheme :

A composition dealer will enjoy the benefits of lesser returns & compliance along with payment of taxes at nominal rates. A composition dealer will file only 2 returns:

Return Form	Particulars	Interval	Due Date
GSTR-4	Return for compounding taxable person	Quarterly	18th of the month succeeding quarter**
GSTR-9A	Annual Return	Monthly	31st December of next financial year*

3.3. Returns to be filed by certain specific registered dealers:

Return Form	Particulars	Interval	Due Date
GSTR-5	Return for Non-Resident foreign taxable person	Monthly	20th of the next month***
GSTR-5A	Return for Non-resident persons providing OIDAR services	Monthly	20th of the next month***
GSTR-6	Return for Input Service Distributor	Monthly	13th of the next month***
GSTR-7	Return for authorities deducting tax at source.	Monthly	10th of the next month
GSTR-8	Details of supplies effected through e-commerce operator and the amount of tax collected	Monthly	10th of the next month
GSTR-10	Final Return	Once. When registration is cancelled or surrendered	Within three months of the date of cancellation or date of cancellation order, whichever is later.
GSTR-11	Details of inward supplies to be furnished by a person having UIN and claiming refund	Monthly	28th of the month following the month for which statement is filed

Here is a video to understand who should file GST Return and why should it be filed –

Here is a video to understand who should file GST Return and why should it be filed –

4.Due Dates to file GST Returns

Due Dates for filing GST Returns can be extended by issuing Orders or Notifications. Here, we have got for you the list of upcoming GST returns due dates that you must not miss!

GSTR-1

For turnover upto Rs 1.5 cr and who opted Quarterly filing

Period	Due dates
Jan- Mar	30th April 2018
Apr-June 2018	31st July 2018
July-Sept 2018	31st Oct 2018

For turnover of more than Rs 1.5 cr/ For turnover of less than 1.5 cr but opted Monthly filing

Period	Dates
April 2018	31st May 2018
May 2018	10th June 2018
June 2018	10th July 2018
July 2018	10th Aug 2018
Aug 2018	10th Sept 2018
Sept 2018	10th Oct 2018

GSTR-2 and GSTR-3

GSTR-2 and GSTR-3 filing has been suspended.  Know more about what was discussed on Return filing at 27th GST Council Meeting!

GSTR-3B

• GSTR-3B has been extended to March 2019.
• All businesses have to file GSTR-3B by 20th of next month until March 2019.

Due date for the month September 2018 is 20th October 2018.

GSTR-4

Due date  for the quarter July 2018 to September 2018 is 18th October 2018

GSTR-5

Due date for September 2018 is 20th October 2018

GSTR-5A

Due date for September 2018 is 20th October 2018

GSTR-6

Due date of GSTR-6 for the months from July 2017 to August 2018 is extended to 30th September 2018.

5. Late Fees for not Filing Return on Time

If GST Returns are not filed within time, you will be liable to pay interest and a late fee.

Interest is 18% per annum. It has to be calculated by the taxpayer on the amount of outstanding tax to be paid. The time period will be from the next day of filing to the date of payment.

Late fee is Rs. 100 per day per Act. So it is 100 under CGST & 100 under SGST. Total will be Rs. 200/day. Maximum is Rs. 5,000. There is no late fee on IGST.