While ruling out the possibilities for any further delay in implementation of GST, Finance Minister Mr. Arun Jaitely had expressed, “Of the total 8.09 million existing tax payers, 81.1% have already registered.”
But would only registration itself be the Cracking Code to GST?
Financial Discipline is the primary intention behind drafting the entire law from the grassroots level.
Financial Discipline also helps you find the revenue leakages and manage your business.
It also helps you allocate resources and expenses, which results in profitable outcome.
How can we expect a boy, who is not well-dressed at school entry, would stay disciplined all day?
Similarly, taxpayers also need financial discipline, by cleaning their books and ensuring accurate input tax credit carry-forward. Less carry-forward hence leads to fund blockage; excess invites scrutiny and interest costs.
How to ensure precise tax credit carry-forward with invoice-level matching?
Reasons for inaccurate input tax credit:
- The deductions made for quality issues, delay in delivery, damages, etc
- Rejected material not sent back.
- In the case of works contract: approval of completed work is pending, escalation claims, scope change claims, etc.
- Service tax credit on advance payment.
- Invoice not received for Goods and Services, and so forth.
What can we do to ensure the availability of accurate input credit?
A. Ask your suppliers, service providers, and customers to share pending invoices, debit/credit notes, and unreported deductions or rejections.
B. Get transaction and balance confirmation from suppliers, service providers and also customers.
Strict deadlines for Excise & VAT returns (ending June 30, 2017), fortunately affect the feasibility of this activity.
That is where FIRMWAY’s digital platform comes in, effectively expediting confirmations.
Firmway has achieved 80% reconciliations (in value) within a week, fortunately with minimal accounts team involvement.
firmway.in to know more about Firmway.