CA Amitav Das

The ERP system needs to go through a significant changes to cope with the changes from the Indirect tax system to GST system by the business houses.

All the Business processes to be improved as the business migrate to GST. From the Transaction level to Reporting and Reconciliation level all the process to be changed as per the regulation mentioned by GST.

The business houses are need to improve their ERP to cope with GST Changes. The below points are need to be taken into consideration for the ERP Changes.

  • Registration Number of  the Organisation : The ERP should be having the option to capture the GSTIN for the organisation and for their other registered location .
  • Registered or Unregistered Persons : There should be a flag for the registered and unregistered persons in the ERP system.
  • Registration number of Registered Customers and Vendors- We need to capture the GST registration number of all Registered Customers and Vendors in the Customer Master and Vendor Master in the ERP system.
  • Tax Codes – ERP should be having option to capture the tax code for CGST, SGST, UGST, IGST. Tax Code for Tax Deducted at Source Tax Codes for CGST, SGST, IGST is required in ERP. Tax Code for Tax Collected at Source for CGST, SGST, and IGST is required in ERP.
  • Tax Rates – The ERP should be having the facility to capture Tax rates under GST for all goods and services as per the slab rates. In addition to that the exempted goods and service can be flagged for the control and reporting purpose.
  • Cess by State– ERP needs to have the option to capture Cess applicable on sin goods, luxury goods and on the aerated drinks and on other transactions as per the respective states.
  • New Account Code in Chart of Accounts – New accounts code is required for the Input tax, Output Tax liability (for both CGST and State wise SGST and UGST) and interim credit account, etc. in the ERP System.
  • HSN Code – The facility required to capture HSN Code for all the goods along with the Goods description  in the ERP system.
  • SAC Code – In ERP we need to capture the SAC Code for all the services which is very important for the calculation of GST Rate and computation.
  • Place of Supply – The facility required to capture the place of supply at transaction level in the ERP system as per the regulatory requirements under GST.
  • Migration of Open Transactions : All the open transactions of Sales, Purchase need to be migrated to GST in ERP from the existing system. All the sales booking, Purchase Order, Sales Quotation and Sales order need to be taken care under GST with the help of ERP during the migration stage to GST.
  • Migration of Partially Open Transaction :
  • All the partially open transactions like Goods in Transit to customer, Goods in Transit from the Vendor, Good Received partly, Invoice has not been made need to be migrated to the new GST System.
  • All the Sales and purchase return for the transactions made before GST need to be taken care appropriately after GST comes in to force.
  • Currently all the stock in transit will be taxable under GST, while under current regime it is not similar. In this case all these Stock in Transit need to be taken care during the GST migration stage.
  • Document numbering: All the Invoice , Advance Receipt, Receipt, Credit Note need to have a unique document number generated in the ERP as defined by the tax authorities under GST .
  • Document Format : All the Quotation, Order, Invoice , Receipt format need to be changed in ERP as per the  regulatory requirements under GST.
  • Tax Invoice –As per all the statutory sales  invoice plays a major role directly or indirectly to compute the revenue or turnover . All the adjustments can be taken care by Credit Note. In GST the Tax Invoice is one of the most important document for the business entity. Under GST the invoice will not be able to cancel . There is no provision of cancellation of tax invoice. This need to be taken care in ERP.
  • Reference Number on Tax Invoice: Post GST there will be mobile check post to cross verify and to check the authenticity of the documents and transactions. For this it is required to print the reference number on the Tax invoice generated from the ERP.
  • Reference Number for advance receipts – Advance receipts will play a major role in the system. We need to track the final invoice against the advance receipts. All the receipt vouchers need to be uploaded on the GSTN during the month of receipt of the advance. The same has to be given as reference on the final invoice of supply of goods and services. The facility is required in the ERP for the same.
  • Un-utilized Credit from the Existing System :All the unutilised input tax credit under Excise, Service Tax, VAT etc. to be updated and distributed to the CGST or SGST correctly as per the guidelines given under GST
  • Input Tax Credit –Under GST, the input tax credit can be taken only on the payment of taxes by the supplier . There is a option to avail the input tax credit on the provisional basis on payment of taxes by the supplier.ERP should have the option for the same.
  • Reversal of Input Tax Credit – Similar to service tax, in ERP System option required to reverse the input tax credit availed on inward supplies of services,  if the payment to the supplier is not made in 3 months.
  • Preparation of Returns : There are three returns to be filed on a monthly basis and one annual return for regular taxpayers ( Except Ecommerce and Service Distributor ). So in total 37 returns per year per. All these returns will have great impact on the ERP.
  • Filling of Returns :All the returns need to be filled through GSP. It’s advisable to discuss with GSP to make sure that all the data and information are available in the ERP system.

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April 2021