How Tally ERP 9 supports Businesses to become GST ready?

It’s been almost a month now with the launch of GST (Goods & Services Tax), touted to be India’s biggest tax reform since independence. Many GST experts have already held enough training sessions on how this tax regime will benefit all types of businesses and individuals. Still many of them, especially the users of Tally services have a burning question on their mind which is ‘What role will Tally play in making my business GST ready? This write up will help you in knowing Tally’s strategy relating to GST and how it will enable you to seamlessly shift into GST with its Tally ERP 9 software.

Readiness for GSTN

As all are familiar with the fact that the GST council authorized the law few months back and we are still in the early days of GST implementation. The rules are still being finalized. Completion of GST rules is closely associated with the completion of GSTN APIs and readiness of GSTN. Till the time the GSTN foundation is available with much needed stability, an up-to-date and functional GSTN affiliated product cannot be created for the users. To get over this dependency Tally GST has come up with some measures. Let’s have a look at these measures. The important initial steps for GST readiness include:

• Creating transactions compliant with GST
• Printing GST invoices
• Maintaining books of accounts
• Making your data visible online on GSTN – you might be surprised with some aspects of it as this is entirely a new activity for you. it’s recommended to follow the below steps so that you gain more confidence in the new phase of filing GST returns:

1. Make use of the error solving capability, which is also called triangulation provided in the latest tally software, i.e. Tally ERP 9 to make sure that you don’t upload incorrect transactions and have correct data
2. Upload verified transactions to GSTN to diminish any unforced errors With Tally ERP 9 Release 6, one can begin running the entire business operations to adhere to the GST rules using the following competences:

For running the daily business operations:

• Get all the GSTIN details of all the customers and suppliers after setting up the much needed tax rates
• Make sure that all new transactions are compliant with GST and print GST invoices

  Submitting the compliance returns

• Before uploading any data, use Tally ERP 9 Release 6.0 to confirm precision of transactions as per the GST rules, prior to uploading data
• A precisely formatted Microsoft excel sheet using the software’s latest release should be used to export data
• You then need to import this excel file into the offline utility given by GSTN and generate an output file
• The last step is to upload this extracted file to the portal of GSTN

Tally ERP 9’s Release 6 has been designed to seamlessly integrate with GST to provide the entire benefits of this tax system to all those concerned. Even now Tally is continuously working towards offering several small and large businesses the right solution towards implementing GST in their functioning.  

What Transformation will GST bring on the Indian Wholesale Market?

India is a country where consumer is treated as a king. Roughly 14 million retail points serve the end consumer in both rural as well as urban markets. Undoubtedly, it’s an enormous task for manufacturers, particularly for those of consumer durables and FMCG to cater to the increasing demand. Further, as 92% of the retail sector is unorganized which makes it all the more difficult or one can say practically impossible for a manufacturer to cater to the end consumer, just relying on distributing channels. Then what’s the solution for this, inevitably, the wholesale market.

With GST about to be launched in few days, it will boost the Indian economy as GDP is estimated to grow 2 to 3%, with a great spur in consumption and export is expected.  Further, the new tax system will also lead to a rise in the amount of tax revenue as the number of tax payers will rise and evasion will be reduced. In addition GST will certainly eliminate all compliance issues. Let’s discuss how GST will transform the wholesale market in India and what impact it will have on it.

GST Impact on Indian Wholesale Market  

The current tax regime doesn’t cover the wholesale business, however, with the GST regime; this will not be the case as it will bring a large section of the wholesale business under the tax system. Today, most of the transactions in the sector are done in black, i.e. the buyer doesn’t get any invoice and ultimately no entry is posted in the books for such sales. These taxpayers generally influence the tax liability dodged and to gain in volume, weaken the entire market. Also, their margin of profit remains as low as 1%.  After the GST gets launched, retailers and wholesalers won’t be able to escape paying taxes as here every invoice related to taxable supply must be uploaded on the common portal of GSTN and must be accepted by the buyer. Tax evasion would have been possible if the entire supply chain would have been outside the tax network and won’t file a return under the law of GST, however, with GST coming into effect shortly, it’s quite unlikely.

Wholesale Sector will benefit from GST

The transformation under the Tally GST for businesses working with Tally ERP 9 will happen from manufacture, sale or provision of services to supply of services and goods. This will lead into branch transfers being constituted as supply and will come under the tax bracket, but entitled for full credit. The wholesalers along with the distributors will be indirectly benefitted as the entry tax and octroy will be removed. Further, under the GST regime, payments, refunds and tax returns would enjoy common formats. Traders from different geographical locations across the country will find it quite easy to abide by this new unified tax structure.

To conclude, GST will certainly transform the wholesale market in India. While there is a possibility that it could hit them initially, the benefits of this tax system are immense.
 

What is Input Service Distributor in GST?

Input service distributor refers to an office of the supplier of goods and/or services that gets tax invoices issued towards receipt of input services and issues tax notice and other such documents as suggested for the purposes of distributing the credit of CGST and/or IGST. This article highlights the same.

These days, businesses having a distributed system of service rendering units as well as manufacturing units across the country are quite common. In other words, businesses with Head and Branch Offices spread across the country could be located in the same or different state. Under this system, for having a better operational control and efficacy, businesses prefer centralized billing for gaining common services at the HO. As a result of this situation, there’s an accretion of input tax credit paid on common inward supplies used by the branch units.

So, for avoiding the above mentioned situation, the notion of Input Service Distributor (ISD) got introduced in CENVAT credit rules, with the help of which the HO can easily distribute the input tax credit to entitled units which are responsible for manufacturing or rendering of services that are taxed.

Businesses having Tally ERP 9 integrated with GST would prefer input tax distributor as it helps ensure a smooth functioning of business. Under the GST model, Input Service Distributor includes:

The office of the supplier of goods which gets tax invoices issued under section 28 towards receipt of input services and issues a suggested document for the purposes of distributing the credit of CGST and/or IGST paid on the services to the supplier.

Registration along with Returns filing under GST

• Businesses need to apply afresh for registration as migration of prevailing registration won’t apply to ISD. Thus for a tax payer, it’s worth to take a note that he/she could apply as a ‘Supplier of Service’ as well as an ‘Input Service Distributor’ concurrently unlike the current scenario. Distinct registration number would be given for this application.
• If the business is registered as an ISD then it requires to file the return by 13th day of the following month while if the business is registered as ‘Supplier of Service’ then return needs to be filled by 20th day of the succeeding month.

What are the conditions for Credit Distribution?

• The required documents need to be issued to the receipts of credit comprising the suggested details
• The amount of credit distributed should not surpass the distribution amount
• Credit of tax paid on input services accredited to a credit’s recipient would be given only to that recipient
• Turnover in such recipient’s state during the pertinent period, to the turnover’s aggregate of all such receivers to whom such input service is accredited and that are operative in the prevailing year, during the said applicable period

The provisions under the prevailing tax laws have been kept affiliated under this GST model law so that all the benefits continue that are available to Input Service distributor with solidity.

How does GST Work and Will It Benefit The SMEs?

July 01, 2017 is the day for GST to roll out all over India. GST (Goods & Services Tax) bill has greatly evolved over the last few years and is considered to be the sole largest tax crusade since India got its independence. Many tax experts estimate it to boost the GDP up to 2%. With the introduction of GST, the slogan of ‘One India One Tax’ will come into existence and all the indirect taxes will vanish making the country a common market. GST coming into effect will not only abolish the cascading effect, but the advantages of easy acquiescence and a single process across the country will greatly contribute to ease of doing business, particularly for those working with Tally ERP 9 as the software’s latest version is fully compliant with GST and the businesses would need it to file their returns.

This specific tax is an all-inclusive tax imposed on the supply of services and goods across the nation. It was June 2016, when the draft model of GST law was initially made open and which the draft was revised and made open on Nov 26, 2016.

GST Background 

Over the past five to six decades the indirect taxation program in India has witnessed several transformations. The transparency in tax administration has increased over the years due to various initiatives taken by the government thus lessening trouble to tax payers, abolishing the cascading effect thus benefiting the end user. However, with the structure of the Indian system being federal the tax is administered by both the state and centre. A little bit of cascading effect is still left in the system due to the deficiency of facility to use credits across these two establishments. In addition, as there are multiple agencies involved, there is an increase burden of compliance. These concerns are precisely addressed by GST by driving regularity across the nation through a single tax and making sure that the credit flow is not restricted. Idealistically, one can say that GST is akin to VAT, which means tax will be charged whenever there’s value addition at every juncture in the supply chain.

Infrastructure for IT

GSTN or Goods and Service Tax Network is a non profit organization that’s incorporated under the partnership of private and public companies which includes state and central government and private companies. The main aim of GSTN is to roll out the IT backbone along with the portal for meeting all the e-filing needs of GST. This is considered to be the nodal agency which would control all the forms, processes along with the data of all the trade happening in the country.

All the businesses registered under GST would require to file returns mandatorily along with the essential quarterly or annual returns. This can be easily done with Tally ERP software as its latest version is integrated with GST. Even those businesses who were till date filing returns quarterly or half yearly must now file returns every month. The tax system under GST would now be quite simple with individuals and businesses can just comply by a single tax.

An Overview of Tally Auditor’s Edition

It’s a well-known fact that the idea behind creating Tally has been to enable a modern business, however, its latest version’s, i.e. Tally ERP 9 Auditor’s Edition has been designed to empower CAs in their practice. This specific edition helps the CA to work effectively with the client and the engagement between the two is raised to an entirely new level. An auditor’s role is anyways quite critical for an organization and increasing tax net, growing economy and enhancing compliance requirements further makes his role crucial. This implies that time is money for any CA. By every passing day the costs for travel and human resource is in really short supply at times and rather than a seamless level of workload throughout the year, there are times when you have short times of extreme work. This can all be turned around with this powerful tool solely for CAs.

As mentioned earlier, the primary objective behind the creation of the tool is to transform the CA’s practice and rationalize the business of the clients.  This tool works great when it aligned with Tally ERP 9 put in to the client’s office and helps in increasing audit efficiency, lessen a great amount of time and exertion, enhance opportunity as new services get added to your collection, and much more. This unique product has much more to offer you such as it provide you the capability to remotely access client’s data from the place of your convenience and provide value added services such as constant compliance.

Features of Tally ERP 9 Auditor’s Edition 

• Yearly audit for every client, defining the capacity of the audit and lessening the data severance and efforts, etc.
• This product lets detailed micro analysis of the customer’s data in a 3 dimensional way and offers superior steadiness across financial statements for clients and auditors
• Using this product auditors can easily verify ledger balances and if there are any alterations in balances, they can be simply highlighted with the tally software thus letting an instant rectification to the concerns
• Using this product numerous configurations can be customized to record and detect that look recurring or unusual
• This product helps in evaluating variations present in association with percentage, transaction counts or negative change based on configurations that are pre set

To summarize, this highly useful product offers commanding tools to help the CAs grow their practice, see enhanced revenues, lessened costs and provide increased services to their clients.

CAIT & Tally Solutions come together to Educate Traders on GST

With GST rolling out in few months down the line, it’s important that every industry/sectors get to know what exactly it is. In order to make aware about the GST regime and for its seamless adoption, the Confederation of All India Traders (CAIT) has joined hands with Tally Solutions, a software product company that has created Tally ERP 9. In combination, both the entities have rolled out a countrywide campaign in order to help traders comprehend the impact that GST would bring on their business. Tally Software experts opine that the GST taxation system is extremely different from the current system as it will result into the merger of all other taxes such as excise, service tax and VAT. So, the CAIT felt that it was essential to equip the traders with sufficient knowledge regarding the procedures and compliance formalities under GST.

The primary aim behind both of them coming together is to impart technological knowledge to the traders during this campaign. The first phase saw holding of around 33 conferences on GST by both the entities in several states of the country which was till 20th December 2016. Several cities held the conferences besides Mumbai such as Ahmedabad, Kanpur, Jaipur, New Delhi, Chennai, Bengaluru, Nagpur, Bhubaneshwar, Rourkela, Raipur, Ranchi, Guwahati, Hyderabad, Indore, Bhopal, Pune, Chandigarh, Cochin etc.

The top executives of both the entities said that future mode of business in the country will essentially be carried out through electronic payments and with GST being introduced, the tax will be deposited through either debit/credit card, NEFT or RTGS only. There won’t be any cash or cheque and tax returns, claiming of input credit, communication between traders and tax department and other incidental activities, as all activities will be conducted digitally. Thus, it’s important that the traders and other sectors adopt technology and comprehend the procedures of compliance. They felt that at a time when the government is moving towards e-governance, the businesses cannot remain distant from technology.

Both the entities in their joint campaign aim to reach out to over thousands of trade associations, Federations & Chambers across India and will also include national organisations of various verticals from the non-corporate sector. The main motive behind this is to train master trainers across the country who’d in turn train traders in their respective states. Tally solutions and CAIT have started their GST conferences across tier 1 and tier 2 cities in India, gradually looking to cover even the smallest towns. This partnership further aims to educate as well as train the trading community of India on how the new tax system will affect their businesses and help members comprehend the significance of adopting new technology in this new age.

How does GST differs from other Tax Structure in India?

GST is an indirect tax for the entire nation that will make India a unified common market. Right from the manufacturer to the consumer, it’s a single tax on the supply of goods and services. Due to credits of input taxes paid at each stage being available in the following stage of value addition, GST which is now integrated with Tally software essentially is a tax only on value addition at each stage. The consumer will thus bear only the GST charged by the last dealer in the supply chain along with the set off benefits at all the earlier stages. With GST, all the geographical barriers for trading are set to be eliminated and will transform the entire nation to one common trading place.

How GST differs from present tax structure?

It’s important to understand the fundamentals of GST as it’s a dual concept tax system. Under this system, tax is managed, collected and shared by both the State and Centre governments, based on the nature of transaction. It certainly differs from the present tax structure and would make the life of people easy, once implemented. Let’s have a look at how GST will differ from the current tax structure:

• In the present tax structure there are separate laws for separate tax whereas in GST there would be only one such law as GST will include several taxes
• Currently there are separate rates. In this system there would be one CGST rate and a uniform rate of SGST across all states
• In current system there’s a cascading effect due to credit of CST and several taxes aren’t allowed. In GST, this situation won’t arise as CST concept is being eliminated with introduction of IGST
• Under current scenario, tax burden on tax payer is quite high. In GST, tax burden is expected to lessen since all taxes are integrated which make it possible the burden to be divided equally between manufacturing and services
• Due to the existence of cascading effect, some taxes become part of the cost. In GST, the cost burden is lessened as the mechanism eliminates such effect by offering credit
• At present, there’s no concurrent power to both Centre and State on same subject tax matter in the present tax system. In GST, both Centre and State are entrusted with the power to make law on GST due to the proposed Article 246A of the constitution
• Currently, tax compliance is complex due to the multiplicity of laws and their necessities to be followed. in GST, tax compliance would be easier as only one law including other taxes need to be followed
• Currently, tax is imposed at two stages in broad manner, i.e. when product moves out of factory and the other at retail outlet. GST needs to be imposed only at final destination of consumption and not at several points. This leads to transparency and corruption free tax administration.

GST is clearly a long term strategy and its integration with Tally App will now extend its reach to millions once introduced. Further it would lead to a higher output, more employment opportunities and economic inclusion. Its integration with Tally ERP 9’s latest release will help small and medium sized companies manage their business in an effective way.

How Businesses can be empowered with Tally’s Free Mobile App on GST?

Recently, Tally Solutions declared the launch of its GST mobile application so that the technology led law is easily adopted by the masses. Businesses and individuals would be the first to benefit from this specific app, as it will prove to be a rich source of information on Goods and Services Tax, and will further help them understand GST and its nuances. The interface of the app is quite user friendly which is designed in the way so that both types of users can handle it; the ones who are well equipped with the technology and the others who are just easing into the use of this technology in order to get better understanding and mechanization of their accounting practices. Brought in by Antraweb Technologies, Tally’s master partner for several years, Android and IOS users can download this free enterprise from their respective app stores.

 It has been Tally’s constant endeavour to equip traders and small businesses with appropriate information to train and prepare themselves for the Tax reform. Recently, the GSTN Network announced Tally to be a GST Suvidha Provider. Also, in order to educate and train the Trading community on GST, they have also collaborated with the Confederation of All India Traders (CAIT). Moreover, a blog has also been launched by Tally software to help with the provision of the most updated information on GST and its associated impact on verticals.

Commenting on the launch, Tally Solutions said that it’s proud of creating the simplest yet most advanced technology solutions for businesses over the past three decades. It further stated that after being part of several events with their partners in the eco-system across India, the company realised the need to develop a simple to use at the same time an all-inclusive tool to deliver this solution to the businesses that the company has invested in the Tally for GST App.

GST for Businesses

GST will bring comfort of starting a business by introducing uniform centralized registration process in India. Businesses will benefit with this change as they will get high exemption with an enhanced investment and lower tax burden, providing unified tax calculation without differentiating between product and services. GST will also play a major role in bringing down the fiscal deficit, enhance GDP and bring economic integration in India.

Going ahead, the process of paying tax will become simpler and transparent with GST, merging all taxes of various states into one, with no difference between sales and service. Furthermore, GST will lessen the logistic cost of the company producing non bulk goods, cutting down stocking cost of goods and services. Matching the Indian market, GST lets full tax credit for inputs and capital goods, i.e. both local and interstate taxes will be paid on procurement. Thus GST reform strives to enhance the growth of SME sector holistically.

In recent time Tally has conducted more than 170 events across India with several partners for making them aware and train small businesses on GST. The company serves more than a million businesses through their Tally ERP and Tally ERP 9 version and is constantly mobilising its manpower and systems to help ease of transition of their prevailing and additional users to GST regime