Change in ERP system required as per New GST return forms

Last Updated On: Nov. 3, 2019, 11:14 p.m.
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New GST return forms may force firms to change ERP systems

 

The additional changes the current invoices which are generated on the companies’ enterprise resource planning (ERP), the new system would also require automatic uploading of the data on government systems. 

The new Goods and Services Tax (GST) returns from April 2020 that mandate providing more details may require companies to amend their enterprise resource planning (ERP) systems. 

 

Those businesses that planned and implemented effective change management for their ERPs to migrate into GST were winners in the race.

Major ERP players such as SAP, Oracle, Tally, etc have also incorporated the GST compliance requirements within their system for existing and new customers. 

Data migration is one big task that affects both master data and transaction data and requires the extensive deployment of expert resources.

Hence it is of utmost importance to examine and identify the impact areas of GST implementation in ERP systems.

 

Currently, with the amendments not being made in amendment returns but being made in the next month's returns, it is necessary to have a strong reconciliation tool embedded in the ERP to track changes to avoid duplications.  Also, the GST regime involves the matching of data between different returns like GSTR-2A with the GSTR-3B and GSTR-1 with the GSTR-3B and so on.

This needs a powerful tool that can not only give the mismatch reports but also suggest actions and avoid duplication of entries in books. Matching between the books and returns is another tedious task that businesses face without automation. A comparison between the purchase register and GSTR-2A is very important that helps taxpayers claim 100% of the eligible ITC.

Tax experts and chartered accountants (CAs) said that the new return systems would require a lot of details such as purchases from unregistered dealers.

Tax experts say the new return systems would require a lot of details such as purchases from unregistered dealers. Instead of the GST returns being the current supplier-driven traffic, starting April next year, it would become a workflow-driven mechanism besides, the bill of entry-wise import details and bill of entry-wise purchases from SEZs (special economic zones) would be required.

As of now, there is one-way traffic. Presently, suppliers upload these data, but from April 2020 recipients will also have to upload all these data

Instead of the GST returns being the current supplier-driven traffic, starting April next year, it would become a workflow-driven mechanism, he added.electronic or E-invoicing for business to business (B2B) transactions would also kick in from January 1, 2020.

This would also require changes in the ERP systems to ensure that every invoice is tracked by the tax authorities. The move is aimed at curbing tax evasion. In addition to the current invoices which are generated on the companies’ ERP, the new system would require automatic uploading of the data on government systems.

It will not be something which will require a complete overhaul of the system, but certainly, some changes would be required after e-invoicing is implemented and more details in GST returns are required from early next year

We at Legalsuvidha have a team of distinguished experts who not only are well versed with the existing GST process and compliance systems but are also working on the new process as an advisor to BIG4 firms to help GSTN in comping up with new process 

 

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