A Consideration of GST Training for Business is Best Practice!

Indias biggest tax reform, the Goods and Services Tax commences since July 2017, is
estimated to create a wide range of opportunities for government and its people in the long
run. This is a thirteen years in the making tax rollout that applies to both goods and services
with a definitely greater compliance focus on transparency of trade data for matching
between traders, thereby increasing the number of tax payers in the country, and in turn, a
larger revenue for the government.

The main focus of GST in India is on the transparency of tax payers declaration of sales &
purchases, which can only be effectively done using GST preparation software with inbuilt
artificial intelligence both from the government and the tax payers to facilitate the data
matching process. The tax system with intended data matching functionality however will not
efficiently work with existing desktop software where majority of businesses previously use
to manage their sales and purchases even with the GST compliant upgrades due to the direct
and vigorous online data matching required in the reporting process. Business will either
need to use cloud based GST preparation software which has inbuilt connectivity with GSP
services for continuous mismatch data download to perform online data correction and
reconcile the ledger or risk the opportunity to identify for all data mismatch, attend to
reconcile the errors and the books, consequently facing heavy penalties imposed as a
negligence to comply with GST legislation.

India to date has over 70% of businesses utilising desktop accounting software to manage
their business transactions and records and most if not all of these businesses have over the
last few months upgraded their desktop accounting software to GST compliant versions in
preparation for GST reporting deadline with their accountants support. Unfortunately, these
businesses will soon find out the inefficiencies of the desktop accounting software when
handling data mismatch and electronic filing process.

The possible consequences for these businesses if maintaining their existing desktop GST
compliant accounting software is for them to accept any data mismatch found from GSTN
portal errors download thus maximising the likely GST payable instead of correcting them.
The issue with this action is the business GST ledger will not reconcile with the details filed
with GSTN portal and again data mismatch if an audit is later found.

One may think then to register for GSP services direct to save on cost but again the facilities
will be no difference to that of GSTN portal file upload without the artificial intelligence
inbuilt to enable for online errors correction, ledger reconciliation and electronic records of
your reports to be filed to GSTN which may be called upon if an audit is required. The
functional services of the GSP are a replica to that of the GSTN portal for tax payers. Its sole
purpose is to enable for direct online linkage with other accounting software providers and
lessen the connectivity pressure to that of GSTN portal if all software and tax payers were to
interact for reporting and support. This accounting software if online would facilitate data
manipulation and push back for electronic filing and record keeping.

GST registered businesses must file at least 3 GST reports per month and an annual return to
GSTN. The process of data collection and data management for use in the preparation of GST
reports must be systematic perhaps even at point of sales for both buyers and sellers to
minimise the time consume and any possible mismatch. For bigger businesses, data
collection and compliance reporting process is generally managed systematically and by their
own in house accounting team but the luxury of such system is not likely to be available for
most if not all smaller business whose compliance reporting is prepared by the engaged GST
practitioner or their local public accountant as an extended service to their business who may
have more up to date knowledge on GST and its reporting requirements.

To ensure higher level of transparency is achieved, auditors, accountants and GST

Practitioners are encouraged to provide basic GST training for their clients to manage data
collection on sales and purchases which will in turn assist them when preparing the GST
reports for electronic filing to GSTN.

With adequate training on GST, both practitioners and business can detect errors within the
software which has inbuilt errors data download capability and correction adjustments,
thereby preventing possible future incoherencies and saving man-hours.

Inadequate knowledge of how to prepare a GST ledger for online reporting purposes will
result in an improper treatment of books of accounts which is tantamount to irreversible
consequences. Recent incident where a small retailer neglected to report Rs15 in the GST
report filed to GSTN was heavily fined at Rs 20, 000. As part of the GST legislation, every
registered taxable business is required to keep record of their book that coherently shows the
statement of cash and tax credit either by cash, cheque or by bank transfers for at least 60
months. Failure to keep and maintain accounting records of their business transactions that
were recorded in the filed GST reports, will lead to undesirable consequences.

Accounting transactions under GST without a GST ledger is like ending the financial year
without auditing your business to ensure accuracy and absence of loopholes. Businesses are
encouraged to take up GST preparation software to maintain their books and get adequate
basic GST training to minimise the chance of getting undesirable attention from the tax man.