Focus areas of reports generated by software for filing returns

As we all know, filing of numerous returns in the GST regime will be a cumbersome task which will be essential for claiming input tax credit because credit availment requires matching of outward supplies of the supplier and inward purchases of the purchaser on online portal. The task will be tedious for large sized companies which will require them to develop software for generation of utility reports that will aid and assist in filing returns. Following are the key areas that need attention while developing software for generating reports that are useful for filing returns:-

1. Since the assessee has the option to take single registration for business verticals within a State, it will be imperative for the assessee to resort to centralised billing mechanism. For ensuring that there is no duplicacy in issuance of invoices by more than one units in the same State, policy of generation of alphanumeric bills can be the option.

2. The assessees having single registration for business verticals in a State are also required to ensure that the bills issued for the purchases made by them have specific mention of the address of the respective business vertical as the GSTN will be same but the credit will be availed only by the unit receiving the goods.

3. The treatment of advance receipts is another major area of concern in the GST regime as GST will be payable even in case of advance received for supply of goods. In such a scenario, specific reference of purchase order should be given against each advance received so that the tax paid on the advance could be adjusted during the issuance of invoice for the same. The accounting for advance receipts will be required to be done party wise on FIFO basis.

4. Another significant area of concern is giving effect of debit notes and credit notes. Although, there is no problem in giving effect of debit notes issued by supplier of goods because that will lead to increase in tax liability which will not be objected by the revenue department. However, the effect of credit notes issued is to be given only if there is reduction in tax liability and consequential reduction of input tax credit by the receiver of goods. Hence, proper mechanism should be developed in the software to enable generation of reports pertaining to credit notes whose tax effect is to be considered and accounted in the returns.