Let me provide the outcome of my meeting with our Chartered Accountant yesterday on this new format released in India. Our CA, mentioned that the format is a guideline and we can have our own formats, but with all the details mentioned (as per requirement). However, we need to track all the applicable GSTs, like IGST, CGST & SGST as these are eligible for input tax credits.
I have tried this with an example in MANAGER, and it has come out well. Let me explain…
We created new tax codes like… IGST, CGST & SGST with 2 rates each (14% & 28%). While creating the CGST & SGST, we used a general term called GST and created multiple rates, CGST & SGST under this. A test purchase invoice was then created with IGST called, and then an invoice with GST (CGST+SGST) called.
Purchase Bill Image:
Now to keep track of the tax details, Tax Transaction report was taken and the image is given below:
Here, it would be better if the general tax code of GST 28%, which has multiple codes like CGST 14% & SGST 14% can be shown clearly on this report.
From the above report, if manual calculation is made, we will know our tax liability. PLEASE NOTE THAT THE REQUIRED FILING HAS TO BE DONE IN PRESCRIBED FORMAT AND IT CAN BE DONE BY A TAX PRACTITIONER or YOU CAN USE FILING SOFTWARES AVAILABLE ONLINE.
This formats were shown to the CA and he mentioned this should be fine, with all other details, like GSTIN, Place of delivery etc., clearly mentioned.
With this, my view is that MANAGER is currently capable of handling GST invoicing and tax tracking in India. However, would request some modification on the Tax Transaction Report to show the final liability clearly (ie. Tax collected - Tax Paid) somewhere at the end of this report.
Also, what we need to worry here is the running balance on each tax code after availing the input credit.
On the above Purchase Invoice, we can avail an input credit of 280 (IGST 28%) against the Sales Invoice, which means we need to pay only 140 (420-280).
As per rules, we can avail input credit as per priority (for IGST - credit would be for IGST first, then CGST and then SGST). From the above purchase bill and invoice, the input credit of 280 (IGST) has to be applied to CGST first and the remain to be applied on SGST.
I feel, this is something we need to work upon…