Changing Financial Year from April-March to January-December in India

Bad News for Accounting Guys who love long holidays on New Year. As Mr. Modi, Hon'ble PM of India shared his opinion to change Financial Year from April-March to January-December few days back. 

Madhya Pradesh govt implements the same and changes its financial year to January-December Today, new budget for state will be presented in December. Hope other states, UTs and Central Govt will also take the similar step.

World would be enjoying new year parties and some accountants will be closing books of accounts.  That's the life of Accountants.  There are jokes on almost all professions. Few days back I tried to search some joke on accountants, but that too were as complicated as Tax Returns.  I think Accountants are believed to be most serious creatures on the Earth. Anyway Keep Enjoying Accounting. There is also fun to play with numbers. :)

Launches “One IP- Two Dispensaries” and “Aadhaar Based Online Claim Submission”

Good News. Great gift by Govt to all Employees on International Labour Day. :)

Launches “One IP- Two Dispensaries” and “Aadhaar Based Online Claim Submission” Now all Employees covered under ESI can be linked to Two Dispensaries, one for Self and One for Family Members. Useful for those working away from their families in other place. They can get treatment from any of Dispensaries.

Also all EPF Members who have activated their UAN and seeded their KYC (Aadhaar) with EPFO will be able to apply for PF final settlement (form19), Pension withdrawal benefit (Form10-C) and PF part withdrawal (Form31) from the their UAN Interface directly. Members can complete the whole process online and they neither need to interact with the employer nor with the EPFO field office to submit online claim.They are not required to give any supporting document while preferring online PF part withdrawal case.

Thanks.

Assessment under GST

Some years ago, I visited Sales Tax Office with our advocate, after hearing the officer called a clerk sitting nearby and asked him to record proceeding, I simply asked advocate, Is this clerk so knowledgeable ? Our Advocate smiled and said, not about knowledge, but his hand-writing is good. Typist can easily understand his writing. :)

After reading and studying Assessment Chapter under GST, for one thing I am 100% sure, gone the days of lengthy explanations and many pages of assessment order, now most of the question/queries under assessment will be replied in just "Yes" or "No". No stories, No excuses.  It is like change in examination pattern from big theory style to objective type question papers. 

Many Tax Practitioners have to work hard on their communication skill to be specific on points, to comply with GST Rules.  It would be like shifting from Big Stories on Facebook to Explaining your facts in 140 Characters on Twitter.

Here is some basic provisions related to assessment under GST. and with this GSTAAA Series (Accounts, Audit & Assessment) comes to an End. Thanks.

[GstSutras9] [GSTAAA3] #SukhF_GST

AUDIT UNDER GST

Here are some basic provisions related to Audits under GST.  Good thing (or for some very bad thing) is as under current tax system Jab chahe jabki chahe date le lo, jab bhi comfortable ho, reply ya information submit karo. In proposed system of GST it will completely bring an end to all these practices. As there is duration of each activity from sending notice to furnishing audit report has been fixed. There will be three types of Audit. 

1. Routine Audit [Sec35 (5)]: Applicable for Big Taxpayers whose turnover will exceed prescribed limit. It would be like Audit conducted under Income Tax. Registered Person has to get his books audited by Chartered/Cost Accountant and Submit Audited Accounts along with Reconciliation Statement for declared value of supply and value according to audited annual accounts.

2. Department Audit [Sec (65)]: Just like scrutiny case, Proper Officer will conduct/lead audit.

3. Special Audit [Sec (66)] : Under Special Circumstances, where department has reasons to have doubts on Registered Person for tax evasion, can get special audit conducted by Chartered/Cost Accountant nominated by Commissioner.

Thanks. [GstSutras8] [GSTAAA2] #SukhF_GST

Payment of Tax under GST

The use of technology is the Best part of GST. Every Registered Person will get his profile created on GSTN Website and facilitated with Dashboard, and will have access on information like he operates his bank account on Internet. From the Input Tax Credit he is eligible to claim, to know his tax liability and detail of all payments made by him, TDS/TCS made on his behalf etc. He will have access on all information. Basic system of GST Payment would be Like TDS in Income Tax. Difference is here it will be maintained in three parts. 

1.) First an Electronic Register that will display what is payable (Tax, Interest, Late Fee, Penalty Etc)

2.) Second Electronic Credit Ledger that will display how much credit (Input Tax) is available to use/adjust against payment of Tax. (Tax Only and not Interest/Late Fee/Penalty etc.)

3.) Third Electronic Cash Ledger to display payment made by registered person or TDS/TCS made on his behalf and can be used to discharge his balance tax liability after claiming input tax credit or to make payment against any payment other than Tax.

Thanks. [GstSutras7]

How to pass accounting entries under GST

Sharing Nice illustrations on How to pass accounting entries under GST Regime. Would be easy to operate and handle chart of accounts, especially for the companies involved in all three activities – manufacturing, trading and servicing. To pass transfer entries against adjustment of output tax liabilitywith input tax credit and reconciliation with returns used to be pain area for accountants, it seems like more number of accounts also in GST, but if we compare accounts under current tax system, these are less. If we analyze flow of accounting entries, automation should not be a big challenge. Still, if accountants have any confusion or doubt, better create a new company in their software. (For ERP/SAP they have to take help of IT Team but in Tally or Busy they can create themselves, if they have admin rights). In new company they can post different transactions based on their business module. From customisation of accounting, Inventory & Tax Masters to parking or/and posting All types of transactions from Local Purchase to Inter State and Import. Domestic Sales & Export. Reverse Charges. Branch Transfers, Job Work & Works Contract. Advances Received & Paid. How it will work in integrated system with Inventory/Payroll etc.
There is still 2 months we have. Enough to practice various scenarios in terms of accounting entries. If practice daily 15 to 30 minutes, it would boost confidence & working under GST will be really Fun. Thanks. #SukhF_GST

https://cleartax.in/s/accounting-entries-under-gst

Delhi MCD 2017 Election Result - What Lessons we can Learn !

So Result of Delhi MCD Election 2017 is out, as expected BJP managed to win and retain all three civic bodies of MCD. But truth is, it is not winning of BJP, but defeat of AAP. This election was not about MCD, if it would had happened, there were no chances for BJP to win, as Delhi MCD is known as one of the worst and most corrupt institutional body in the world. BJP too knew this fact, that's why fought this battle with new faces. This election was about Modi Vs Kejriwal. Mr. Kejriwal lost in last elections in Punjab and Goa, but he did not learn any lesson. Now it is two years, People want results. He did many things specially in areas of Health and education, but what expectations he made people from him in 2015. People are evaluating on that basis. He still have 3 years to transform himself, forget other states, focus and to perform in Delhi. Have to hold patience and control his desire to emerge as a National Leader. Thanks.

Accounts and Records under GST

Today starting my next series on GST. GST-AAA. 3A stands for Accounting, Audit & Assessment. When I was reading Draft GST Rule on Accounts and Records, then realize, this time law is just not like a well written literature book complied by a group of authors having interest in philosophy, unaware about the business making law that will impact industry and whole nation.  Now it is practical; it is about business & accounting. Accounts & Records will be prime responsibility of everyone, from head office to branch office, from factory to warehouse, from job worker to transporter. Any Business Transaction would be like scent, whosoever will touch, fragrance or aroma will reveal his role in the transaction.  No Excuse will be entertained. Dealer has to ensure Safety of records. Just refer Rule 2 :

Proper electronic back-up of records shall be maintained and preserved in such manner that, in the event of destruction of such records due to accidents or natural causes, the information can be restored within reasonable period of time.

Also condition to maintain complete log of accounting entries will just not impact accountants, but also make other function heads of Purchase, Stores & Sales to forward documents in accounts at the earliest possible. Sales transactions would have to authenticated & final before an invoice is raised because now eyes of big boss (GST Authority) would be always over the system.

If some people have misunderstanding, that GST is only about accountants, need to refresh their thinking, it is about entire business. Directly or Indirectly all business activities would be affected. Thanks. [GstSutras6] [GstAAA1] #SukhF_GST

Debit and Credit Notes under GST

In the series of Important Documents under GST, My this Last Post is about Debit & Credit Notes. We all know these are instruments to settle any dispute between parties, rectify any error or to record Sale/Purchase Return, To Pass Commission/Incentives/Discounts etc. But, What I see this small provision is going to change business culture. As of Now, If Recipient is not satisfied with the quality of services/products, he simply deduct some amount from the invoice of Supplier and issue him debit note. But Now under GST, all power will lie with Supplier to issue Debit/Credit Note. I hope it will bring honesty in Business, and people will get rid of their habit from deducting some amount from each & every bill. It seems not a business transaction but like a housewife buying vegetables for Home.

One more interesting thing if this is case of Tax Reversal We will have limit of 6 months only from the end of FY, but if any transaction result in increase in Tax Liability, No Such Limit. Govt is truly greedy. :)

Thanks for bearing my posts. From Monday (24.04.17)  will try to start a new thread  on some other interesting chapter of GST.  Happy Weekend. Thanks & Cheers.  God Bless All. JMJ. [GstSutras5] #SukhF_GST

Advance Receipt Voucher under GST

In Important Document Series after Tax Invoice, Bill of Supply and Challan, Next is Advance Receipt. I believe that Hon'ble PM Mr. Modi would have not been explained these provisions under GST, otherwise such provisions do not form part of GST Bill. If not Kill, It will harm small companies badly. In many industries small enterprises depend on the advances to run their day to day operations received from their big clients, but now since GST would be payable on Receipt of Advance or Issue of Invoice, whichever is earlier. [Sec 12(2)], with condition Input Tax can be claimed on or after issue of Invoice/Completion of Activity [Sec16(2)]. Many clients will refrain from issuing advances to their small suppliers. SMEs will be left to have no other choice to go for unsecured loans at higher interest rates in absence of collateral that will shrink their margins. Here is some basic features of Advance Receipt. Thanks. [GstSutras4]#SukhF_GST