–Following are some points you should check while entering New customer in your ERP–
Which New Customers are created in this month ?
Have you followed the SoP of their account creation?
Have you entered their correct GST no. ?-If even a single digit of GST no. entered is incorrect then the GST Return gets wrong and the customer will not get ITC.
What is the Credit Limit of New Customer ?-Are you approving Credit limits?
If the PINCODE is correct ?-The E-way Bills and E-invoice gets stuck if the pincode is wrong because it also has distance concept. Address should be correct.
Till now we discussed about New sale order and New customer creation, next will discuss about further things to be taken care for Sale audit.
Stay tuned for more such informative content and see the video below by – Mr. Sangeet Kumar Gupta, F.C.A and Co-founder of Finsys for further information and more clarity .
We usually assume that if invoice is generated by system it has more reliability. That’s why sale audit is mostly done just for taxation.
But
—Here are some questions for you—
1️⃣
Have you checked your Sale order’s price?
2️⃣
Have you checked that the price of invoice is according to the discussed, agreed and final price?
3️⃣
If effective date is correct or not ? –
(For more clarity like – the price was effective from 1st April and you started the invoicing of price changed and you get order on 10th April and you changed the price in your ERP on 15th April.
So..as per the things price gets changed from 15th April, if the debit notes were made for the dates from 1st to 15th April or if credit notes have to be issued-issued or not ?)
Now the most important question-
Who is Responsible and Accountable for all this?
You have to understand that it’s also an important area for Audit.
There are some important areas of Sale audit.
Today we gonna discuss about one of them which is –
New Sales Order
Here is the checklist you should be checking-
Which Sale order is new in this month? – It can be either fresh or amended orders.
What is the position of the orders? – If in literal we got the order or it’s just party has asked for the quotation on mail.
We should ask or cross-check with the management that – If we get the price increase in any order in this month according to our assumption or not?
After checking the Sale order given by management you should check whether the already rate entered in your ERP are correct or not?
Check the Sale order physically or either make demand for it. As there is a possibility if you doesn’t have your customer’s P.O (Purchase Order) and you changed the price, this will not be considered as increase in price.
If taxes deducted are ok or not or are according to discussion or correct or not ?
Effective Date is correct or not ?-Is there any Retrospective increase or decrease?
E-invoice should be made or not ? as its mandatory for the organization over 5 Crore turnover.
These all points should be covered while you are going to have your Sales Audit.
–> Next time will talk about our next important area of Sale Audit which is – ‘New Customer Creation’<–
Stay tuned for more such informative content and see the video below by – Mr. Sangeet Kumar Gupta, F.C.A and Co-founder of Finsys for further information and more clarity .
Also read about the recent event he attended by the link given below:
We are Proud to share that we are Attending WOFA – New Delhi 2025.
WOFA is World Forum of Accountants … See you there
We at MLGA areattending WOFA
Wondering What WOFA is ?
Just stay in touch with us to get more knowledge, Information like this and also get expert in these kinda terms.
So, basically WOFA is…
A global gathering of accountants and finance professionals organized by the Institute of Chartered Accountants of India (ICAI). The 2025 WOFA will take place at Yashobhoomi, New Delhi from January 31 to February 2, 2025. The theme for the 2025 WOFA is “Accountability Meets Innovation (AI): For A Sustainable Planet”.
What’s its endeavour ?
The World Forum of Accountants (WOFA) will delve into the critical intersection of artificial intelligence (AI) and environmental sustainability. The forum will explore AI’s transformative potential to address global environmental challenges, such as climate change, pollution, and resource scarcity. By examining AI-driven solutions, WOFA aims to inspire innovative approaches to environmental management and conservation.
For more information and to register yourself click the link below. https://wofa.icai.org/
Proud to attend this three day international conference
Some Recommendations of the 55th Meeting of the GST Council ( As relevant to our members )
Note : Detailed notifications are yet to be released. The above is based on the Press Release dt 22-12-24. The meanings may change, after the actual Circulars / Notifications are released
Now in Detail… first for Sale of Used Cars
To bring supply of the sponsorship services provided by the body corporates under Forward
Charge Mechanism.
GST Council recommends no GST on transaction of vouchers as they are neither supply of goods nor supply of services.
The provisions related to vouchers is also being simplified. GST Council clarifies that no GST is payable on ‘penal charges’ levied and collected by banks and NBFCs from borrowers for non-compliance with loan terms
GST on Old and Used Vehicles
Old Position
Smaller Vehicles
12% on the Gain portion only
Larger Vehicles
18% on the Gain portion only
Cess taken at Zero
New position
All Passenger Vehicles , all types
18% on the Gain portion only
Benefit : No confusion to MSME himself, and no confusion to the Government
Note
This GST is on the Gain portion only
Gain means : Margin of the Supplier, that is, the difference between the Purchase price, less Depreciation and Selling price, ( That is logical )
And an unregistered person, say a Salaried person = Not applicable at all
Cess again remains zero
Source for old position : Notification 8/2018 dt 25-1-2018 – Central Tax (Rate )
Meaning : Law is same for all now
If Sold Below WDV
If sold above WDV
Size of Vehicles..4000 mm, 3000 mm.
Any Size
No GST applicable
Yes, GST on “profit portion” only
Sports SUV or non SUV
Anything
No GST applicable
Yes, GST on “profit portion” only
Ground Clearance Rules…170mm
Anything
No GST applicable
Yes, GST on “profit portion” only
Engine Capacity… 1200cc…1500cc..1600cc
Anything
No GST applicable
Yes, GST on “profit portion” only
All Size of Vehicles All Size of Vehicles All Size of Vehicles
Same Rate, Same Rules
Category
GST ?
Normal employees, without registration in GST
No GST
Normal Residents, without registration in GST
No GST
Doctors , or any exempt category
No GST
Sale of old Motorcycle by any user ( salaried or business, except Auto dealers themselves )
No GST
Any Regd person selling a old car at a loss
Usually Motor Vehicles are sold at a Loss only
No GST
Any Regd Person, selling an old Car at Profit over WDV
This is very rare… that Income tax depreciation is 15%.. and actual value reduction is less than this
Yes, GST on the Gain portion only
Calculation examples
Car
Purchase Cost
Written down value after 15% annual income tax Depreciation
Sold for
Gain or Loss Value
GST
A
20,00,000
14,00,000
13,99,000
(1,000)
Nil
B
20,00,000
14,00,000
10,00,000
(4,00,000)
Nil
C
20,00,000
14,00,000
18,00,000
4,00,000
18% on 4 lakh
But looks very rare
D
20,00,000
5,00,000
4,99,000
(1,000)
Nil
E
20,00,000
5,00,000
4,00,000
(1,00,000)
Nil
F
20,00,000
5,00,000
7,50,000
2,50,000
18% on 2.5 lakh
But usually rare, since cars have a limited life of 10/15 years now
Note : Detailed notifications are yet to be released
No GST on the Penal Charges by Banks, and NBFC’s
GST 55th council meeting , agreed and clarified that no GST is payable on the ‘penal charges’ levied and collected by banks and NBFCs, from borrowers for non-compliance with loan terms.
This is good
This used to be a PAIN
Already some penal charge levied
And on the top of it its GST….. Now no more
The council has agreed.. that the essence of this is of “Interest”, hence probably GST council smiled and let this go.
Note : Detailed notifications are yet to be released
Ease of Doing Service by the Associations : in GST
Topic
Current Position
New Position
Sponsorship considered
Reverse Charge GST only
Forward Charge GST if done by Corporates ( example Section 8 company )
Loss of GST
The Service provider Association cannot take ITC input of GST on its input services…. and leads to loss , Need to absorb that GST as loss / Cost
No such loss in future
Doubling of GST
Yes, Double GST, first paid to vendors of the association by the association, then Again, as RCM by the Sponsor to the Govt.
This Double loss is removed
In Short, the Government is Making Business Better
For queries, suggestions and feedback , you can e-mail us
Sangeet Kumar Gupta, FCA, DISA, ACMA, PGDMM, B.Com(Hons), Honorary Consultant, Integrated Association of Micro Small and Medium Enterprises of India, 93126-08426, Camp Off : TB-06, 3rd Floor, Crown Plaza, Sector-15A, Faridabad, Haryana 121007 skgupta[at]finsys.in. I am SME of India Office … Plot No.135, Sector 59, Industrial Estate Phase-II, Ballabhgarh, Faridabad- 121004, Haryana.
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Notes & disclaimer
The contents of this circular are for Private circulation & intended for the addressee/s only. We do not warrant that this email is free of mistakes, errors or any other defect. Care has been taken to provide authentic information, but it is advisable to confirm/verify with qualified legal practitioners, professionals before implementing any suggestions. The views expressed are not necessarily those of the Association. We encourage readers, our Members to write to us their opinions, suggestions, ideas, comments, thoughts and bring to our knowledge mistakes, omissions etc. which we’d be pleased to correct/implement.
For personalised suggestions, and solutions, contact our I am SME of India Team and Consultants
Regular Monthly Stock Audit Facilities from Finsys ERP Team
How will you know the correct material accountability,
if your stock is inaccurate and haywire ?
The “Surprise” “Friendly” Stock Audit helps energise your team
That yes, Keeping Stock Correct is important
It is mandatory for GST, Income tax, Bank and yourself
It helps in Better ERP implementation too.
Excellent Web Based ERP Software Facilities from Finsys ERP Team
RCM on GST on Metal Scrap Purchase from Unregistered Persons,
Also TDS Starts for Registered Suppliers
This is a Big News. First Time Ever. Govt has started 2% TDS on Purchase of Metal Scrap from Registered Persons.. + Also RCM GST on Purchase from URP
Note there are TWO separate NEW ITEMS…. they are related but NOT SAME.
We start with the First one : RCM
This has come up with the introduction of Notification No. 06/2024-Central Tax (Rate), dt 8th Oct 24
All businesses involved in metal scrap PURCHASE should take immediate steps to comply with the reverse charge mechanism provisions. So, Starting from October 10, 2024, registered persons purchasing metal scrap from unregistered sellers must ensure that the appropriate GST is paid under RCM.
Notification No. 06/2024-Central Tax (Rate): Amendments to GST on Metal Scrap
Date of Notification: October 8, 2024 Notification No.: 06/2024-Central Tax (Rate) Effective Date: October 10, 2024 Issued by: Ministry of Finance (Department of Revenue), Government of India
Key Dates:
Event
Date
Notification Date
October 8, 2024
Effective Date
October 10, 2024
Deadline for Compliance
Ongoing from October 10, 2024
The metal scrap industry often involves transactions between unregistered suppliers and registered businesses. By mandating that registered recipients must pay the GST under RCM, the government aims to bring more transparency and compliance to this sector, preventing revenue leakages.
The source of this is the Recommendation of the GST council in 54th Meeting
The 54th GST ( Goods and Services Tax ) council meeting held on 9th September 2024 has recommended 2% TDS on the supply of metal scrap by registered persons in B to B supply. It had provided the clarifications on the RCM. The meeting was presided by the Finance minister Nirmala Sitharaman.
The Council has recommended the introduction of the Reverse Charge Mechanism (RCM) on metal scrap transactions
Under this new provision, when a metal scrap supplier is unregistered AND HE supplies to a registered entity, the recipient (buyer) will be liable to pay tax under RCM.
This is to bring these transactions in GST Net…. Since the unregistered Scrap dealers were slightly a GREY AREA
New Accounts required in your Finsys ERP / Tally / any Accounting package
Either create Three new accounts to create in your books
CGST RCM Payable ( Scrap )
SGST RCM Payable ( Scrap )
IGST RCM Payable ( Scrap )
CGST RCM ITC Receivable ( Scrap )
SGST RCM ITC Receivable ( Scrap )
IGST RCM ITC Receivable ( Scrap )
or you can continue with your current generalised RCM Accounts also… if you can manage with them
Specifically, under the new amendment, unregistered persons selling metal scrap (falling under categories 72, 73, or 81) will be subject to the reverse charge, meaning the registered buyer will be responsible for paying the GST instead of the seller.
Notification No. 06/2024-Central Tax (Rate) | Dated: 8th October, 2024 G.S.R. 614(E).— In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue), notification No. 4/2017-Central Tax (Rate), published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), vide number G.S.R. 676(E), dated the 28th June, 2017, namely:-
In the said notification, in the Table, after S. No. 7 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: – 2. This notification shall come into force on the 10th day of October, 2024. (1) (2) (3) (4) (5)
“S No 8.
Chapters 72, 73, 74, 75, 76, 77, 79, 80 or 81 Metal scrap
Seller = Any unregistered person
Buyer = Any registered person.
Now the second topic…… A new GST TDS of 2% will be applicable on supply of metal scrap by registered person in B to B supply.
Note : Income tax TDS will be zero upto 50 lakhs.. since this is not a service… and will be 0.1% after Rs 50 lakhs year purchase
But…. this GST TDS will start from Rs 2,50,000 per contract onwards…..
TDS of 2% to Be Applicable on Supply of Metal Scrap by Registered Person in Case of B2B Supplies | Notification
The CBIC has issued notification to provide that any registered person receiving supplies of metal scrap shall deduct TDS of 2% on B2B transaction. This notification shall be applicable from 10th October, 2024.
GST is in the eighth year of its implementation. When the CGST Act was enacted in 2017, Section 51 contained the provisions of TDS. But this section was made applicable only w.e.f 01.10.2018. Section 51 of the CGST Act causes obligation on the recipient of the supplies (deductor) to deduct some percentage as tax at source from the payments to be made to supplier (deductee) and pay it to the Government.
Till now , upto now, from July 2017 to September 2024 ….. the provisions were made applicable only to government bodies and PSUs.
However, clause (d) of section 51(1) empowers the government to notify any other category for the purpose.
A TDS of 2% will be applicable on supply of metal scrap by registered person in B to B supply.
NOTIFICATION New Delhi, the 9th October, 2024. No. 25/2024-Central Tax G.S.R. 629(E).— In exercise of the powers conferred by sub-section (3) of section 1 read with section 51 of the Central Goods and Services Tax Act, 2017 (12 of 2017), hereafter in this notification referred to as the said Act, the Central Government, on the recommendations of the Council, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 50/2018-Central Tax, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R 868 (E), dated 13th September, 2018, namely:– In the said notification, (i) after clause (c) and before the first proviso, the following clause shall be inserted,-
“(d) any registered person receiving supplies of metalscrap falling under Chapters 72 to 81 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), from other registered person”;
(ii) for the third proviso, the following proviso shall be substituted, namely- “Provided also that nothing in this notification shall apply to the supply of goods or services or both, which takes place between one person to another person specified under clauses (a), (b), (c) and (d) of sub-section (1) of Section 51 of the said Act, except the person referred to in clause (d) of this notification.”
>>>> means Registration is mandatory for the Supplier and he cannot take exemption under this 2017 notification
2. This notification shall come into force with effect from the 10th day of October, 2024. [F No. CBIC-190354/149/2024-TO(TRU-II)] AMREETA TITUS, Dy. Secy.
Note:- The principal notification no. 50/2018- Central Tax, was published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R 868 (E), dated 13th September, 2018 and last amended vide notification no. 73/2018-Central Tax, number G.S.R 1250(E), dated 31st December, 2018.
Note there are TWO separate NEW ITEMS…. they are related but NOT SAME.
