GST accounting Impact | GST Accounting Software

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Impact of GST on Business Accounting

• CA Abhishek Jain

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What is GST ?

• As we all know, Goods and Services Tax (GST) the
  most googled keyword in the recent past. GST in
  india is more of a reform than just a new tax, it
  is single indirect tax for the whole nation (One
  India One Tax One Market).
• GST is a destination based tax levied on the
  consumption of goods and / or services across the
  nation. It is the resultant tax after subsuming
  major Central and State indirect taxes.

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So What's Gone and What Stays

• Whats Gone

• What Stays

• Central Excise Duty
• VAT and Central Sales Tax
• Service Tax
• Entertainment tax, Luxury tax
• Taxes on lottery, betting and gambling
• Octroi and Entry Tax
• Purchase Tax
• Additional Excise Duties
• Countervailing Duty (CVD)
• Special Additional Duty of Customs
• Central State Cesses and Surcharges

• Basic Customs Duty
• Exports Duty
• Road Passenger Tax
• Toll Tax
• Property Tax
• Stamp Duty
• Electricity Duty
• Central Excise Duty on Petroleum and Liquor etc.
• VAT and Central Sales Tax on Petroleum and Liquor
  etc.

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Major Laws

• Central Tax

• State Tax

• Integrated Tax

• Cess

SGST
CGST
IGST
CESS

• GST on intrastate supply of goods and services,
  the GST levied by the Centre, it will be called
  CGST or Central Tax.

• On intrastate supply of goods and services the
  GST levied by the State or Union territory will
  be called SGST/UTGST or State Tax

• GST on interstate supply of goods and services,
  the Centre will levies and administers, it will
  be called IGST or Integrated Tax.

• GST Compensation Cess to be levied on certain
  goods. It is additional to highest Rate of GST

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Few New Terms...

1. Supply
2. Supplier
3. Recipient
4. Mixed supply and Composite supply
5. B to B
6. B to C

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Philosophy and Process

• With advent of GST whole Process of accounting
  has changed.
• It has put Mercantile system of accounting as a
  only system of accounting.
• Accounting will now be through some or the other
  software.
• Monthly Finalisation of Accounts.
• Buying from Registered Business and through
  Banking Channels
• No to Delays.

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Transition

• Companies will need to plan well for transition
  and assess carefully the transition
  rules.Practical challenge relates to carry
  forward of tax credits. These may need to be
  carried forward state wise, which could involve
  significant effort in identifying and breaking
  down the current balances.
• Further tax accounting and compliance
  considerations needs to be planned in the IT
  systems for transactions originating before
  transition but reversing/ concluding post
  transition, e.g., sales returns, receipt of
  purchases after transition etc.

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Invoicing

• In GST the invoice must have following details

• Invoice number and date
• Customer name
• Shipping and billing address
• Customer and taxpayers GSTIN
• Place of supply
• HSN code/ SAC code
• Item details
• Taxable value and discounts
• Rate and amount of taxes i.e. CGST/ SGST/ IGST
• Whether GST is payable on reverse charge basis
• Signature of the supplier

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How many copies of Invoices should be issued?

• For Supply of Goods, Three Copies of Invoices
  are required
• For Supply of Services Two Copies of Invoices are
  required

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Payments Receipts

• With GST the Payments for Invoices must be
  completed within 6 months or else Tax credit
  taken must be Reversed by the Recipient.
• All the Advance Receipts must bear the Tax rate
  for which advance money is taken and also tax
  must be deposited for the advance.

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Reverse Charge Mechanism

• In certain cases, the Levi of tax is upon the
  buyer of the goods and or services. This is
  called reverse charge as the chargeability of tax
  gets reversed.
• Unregistered and other specific service provider.
• Self Invoicing
• Payment of Tax and then Utilisation through
  credit ledger.

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Reporting

• Accounts will be required to be maintained with
  Inventories.
• HSN Wise Reports will be required.
• GST Reports will be required from the softwares
• Advance Receipt Reports
• Stock Reports
• B2B Supplies Report (Item Wise Report)
• B2C large and Small Report
• Export reports.

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Scope of Accountants and Managers

• Rise In Need of Accountants in SMEs
• GST Advisory
• Implementation of GST
• Filling Opportunities
• Employment Opportunities as EDP
• TAX Management
• 100k Jobs will come with GST

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Compliances

• Three Returns every month on GSTR1 (Outward
  Supply), GSTR2 (Inward Supply) and GSTR3 (Monthly
  Return) to be filled 10th, 15th and 20th
  respectively.
• One on One check from inward supplies.
• Payment must be made till 20th of every month
• Annual Returns with Reconciliation
• Annual Audit

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