| |
|
|
02-03-2020
In the case of gst registrations it is advised to create ledgers for all - State GST, Central GST, Integrated GST, and even for tax levied on inter and intra state sales and imports. So in relation with ITC, the ledgers may be as follows:
Interim / Suspense / Provisional ITC - SGST
Interim / Suspense / Provisional ITC - CGST
Interim / Suspense / Provisional ITC - IGST
Interim / Suspense / Provisional ITC - GST Cess
In the wake of newly introduced rule 36(4) with 10% restriction on itc (reflecting in Gstr 2A) wherein the itc would be given only when its reflected in respective 2A, accounting entries can be changed to keep track of itc taken in books vis a vis itc reflecting in 2A --
The new accounting entry at the time of purchase or at the time of booking of expense should be
Inventory/ services/ expenses A/c Dr
Interim/ Suspense/ Provisional A/c - IGST Dr
Supplier A/c Cr
The new accounting entry at the time of matching shall be
Input tax credit - IGST Dr
Interim/ suspense/ provisional A/c - IGST Cr
This process will have an option to track at the supplier invoice level and helps to monitor the suppliers who are not filing returns on time.
This new process also helps to keep track of the changes which are reflected dynamically in GSTR - 2A from time to time based on filing of returns by the supplier after the due date.
As per rule 69 of the Central Goods and Services Tax (CGST) Rules, 2017, following details must be matched to the claim of input tax credit
GSTIN of the supplier
GSTIN of the recipient
Invoice or debit note number
Invoice or debit note date
Tax amount
There are reasons for the differences between the records of the seller and the buyer. These could be wrong GSTIN of the supplier, date related or entry errors while uploading invoice or debit note number, invoice or debit note date and errors in calculation of the tax amount.
There can be errors at various levels like
Errors by the suppliers: It often happens, especially in absence of a good ERP/Accounting system that the supplier might end up entering the wrong GSTIN number. Furthermore the supplier might have not filed tax or uploaded the tax invoice.
Invoice related errors: Again, there could be mismatch due to data entry error of invoice or debit note number by the end of supplier in their ERP system or the books of accounts. The supplier may go errant not just while mentioning invoice number but while entering the amount of the invoice too.
Human errors!
Factor of time and luck:
Another important factor is the time gap between receipt of goods and the generation of invoice. This may cause mismatch and/or errors-for instance, if the purchase is made on a certain day and the invoice is generated way later, for some reason. This will create confusion on the day of purchase. Likewise, it may also happen that the supplier has issued invoice and it was not received by the recipient. Or in some cases in which the purchase has been made but the goods are still in transit or not yet shipped, then it will be required to reconcile the entries accordingly.
To avoid the precious working capital the MSMEs have to change their business process based on the statutory requirements of GST and also adopt technology so that the entrepreneurs can concentrate on the business operations rather than the compliance and accounting work.
It has to be kept in mind that GST is not a tax reform but a business process reform and change of business process and adoption of technology helps the MSMEs to scale to new heights and they have the potential to become tomorrow's MNCs. |
|
|
|
|