Recap on conditions….Conditions and GST precautions for Sale to Merchant Exporter for 0.1%

Conditions in GST for Export indirect … via Merchant Exporter…0.1% GST is not your “Right”, unless you do these duties.

Terms and conditions

(i) The registered supplier shall supply the goods to the registered recipient on a tax invoice;

(ii) The registered recipient shall export the said goods within a period of ninety days from the date of issue of a tax invoice by the registered supplier;

(iii) The registered recipient shall indicate the Goods and Services Tax Identification Number of the registered supplier and the tax invoice number issued by the registered supplier in respect of the said goods in the shipping bill or bill of export, as the case may be;

(iv) The registered recipient shall be registered with an Export Promotion Council or a Commodity Board recognised by the Department of Commerce;

(v) The registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier;

(vi) The registered recipient shall move the said goods from place of registered supplier –
(a) directly to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported; or
(b) directly to a registered warehouse from where the said goods shall be move to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported;

(vii) If the registered recipient intends to aggregate supplies from multiple registered suppliers and then export, the goods from each registered supplier shall move to a registered warehouse and after aggregation, the registered recipient shall move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported;

(viii) In case of situation referred to in condition (vii), the registered recipient shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgment of the warehouse operator shall be provided to the registered supplier as well as to the jurisdictional tax officer of such supplier; and

(ix) When goods have been exported, the registered recipient shall provide copy of shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional tax officer of such supplier

Ideas Courtesy : Mr Rajesh Khandelwal, CA and learned speaker on GST matters , across India.

There are the MANDATORY  conditions in GST, for sale to merchant exporter.

If you can fulfil these, then good…. Instead of 18% normal GST rate you can charge only 0.1% GST on the sale in this situation

Points to remember

MANY PEOPLE MISS SOME OF THESE POINTS… AND RISK GOES BIG

Conditions in GST for Export indirect … via Merchant Exporter…0.1% GST is not yet right, unless you do these duties.

Why are the Sales Figures different. in Different Reports ? with Logics ?

Finance for Non-Finance People

What is the logic behind this ? What is the Truth Reason ? What should I learn ?

Different Sales Figures in Finsys ERP .. How to Handle. Which figure is ok ?

Answers

Different reports are made for different users, and for different information needs
So, the reports are created on different software SQL commands, taking data from different sources

Some reasons are as follows

Due to Sales returns  / debit note from customer 

These are Entered in accounts by reducing sales, ( so P & L is net figure)
But online “live” status report are from the pure invoicing .
Most of the reports from the Sales and Marketing menu are also – invoice based reports
Most of the reports from the GST menu are also – invoice based reports

Both are a fact, and both are required.
And Hence this should be reconciled internally

Sales of capital goods

This is not a normal thing.. only a few transactions a year
Sale of an old machines
Sale of Old Car / Truck
Sale of old EOT Crane
Sale of scrap of old furniture
In case of sale of capital goods,
Invoice is made = yes ..
It will come in Sales auto emails = yes,
it will come in all invoice based reports. yes
But is this is sale ? = no
So, these are NOT Entered in accounts, ( so P & L is pure goods sales figure)
But online status report and most of the invoice based reports are from the pure invoicing
Both are a fact, and both are required.
And Hence this should be reconciled internally

Sales invoice for “Purchase Return”

As per GST law, & Practical reasons, it is good to make a GST invoice for purchase return
Note, in GST, it will be a part of the total
But, in accounts, it will be credited to Purchase account / purchase return account
Hence
NOT Entered in accounts in Sales, ( so P & L is pure goods sales figure)
But online status report and most of the invoice based reports are from the pure invoicing
So, some reports are made taking all these
And some other are made without these Purchase return invoices
Both are a fact, and both are required.

Any Debit note to customer ( additional income )

In case, if any debit note is entered on the customer
Entered in accounts, ( so P & L is added to sales figure)
But online status report is from the invoicing ( it is pure basic value from the invoices )
Both are a fact, and both are required.
Humbly submitted please

Debit to party for cartage, freight, insurance packing, in the Invoice
If this is taken in the invoice as an additional charge, please note that it is debited to party and sometimes credited so “other income”. ( we will prefer .. they go into Normal Sales, as per Finsys SOP )
So,  in case you take it to other income, then, NOT Entered in accounts in Sales , ( so in P & L it comes separately, as other income )
But online status report and many Sales reports are GROSS from the invoicing ( it is GROSS basic value from the invoices )

Reports may have different formats

Some of these reports required and given are
Basic only
Basic of 100% invoices
Basic of Sales invoices only ( exclude the Purchase return invoices )
Export only
Domestic only ( all )
Selected series – say trading invoice only

For GST purposes

Basic + GST of 100% invoices
Basic + GST of Sales invoices only ( exclude the Purchase return invoices )
Other combinations

Show the other charges or not ?

Some reports will show all other charges / add-on’s upto transport charges, insurance, etc
And some will not
Reason = different needs

Show the Sales data for selected Group parties only ?

Facility available
Obviously, report will be for that 16xx series only

Can there is one single “best report”  for Sales for Accounts people ?

Yes, the Sales register, in accounts, on landscape format, extra-wide on fools-scape paper is the best one.
If your company can ask all users to use this only, that will be great
(( this is a internal company decision ))

However this will not be The “best” for Despatch team or marketing team. They can select their own “best report”

Inter Plant Billings – peculiarities under GST laws

Whenever you bill, inter plant,
Say from your Noida plant to Manesar plant , or
plant 2 to plant 3,
for GST, it is a “Sale”, so invoice is made
for one plant’s Balance sheet / P & L , it is a sale
for 2nd plant’s Balance sheet / P & L , it is a Purchase
for consolidated BS / P & L, it is a contra entry ( to be cancelled against each other )

Inter Plant Billings – peculiarities if the purchase contra entry is not made

Note that, a Sale of first plant is purchase of 2nd plant
But this cannot be automatic
The goods must also be linked to a MRR of the 2nd plant
( there has to be a physical counting and QC of these goods at 2nd plant )
Thus, Note that if the 2nd plant does not pass the Purchase voucher of this MRR
Sale bill is reflected in the ERP immediately
But the Purchase side is not reflected in the ERP till the PV is passed
Hence some temporary differences can be there

Inter Plant Billings – peculiarities under GST laws

if there is a inter-state( UP to Haryana Plant), it is a sale / branch tfr of type A with GST
if there is a within state of UP, it is a sale / branch tfr of type B .. without GST Delivery challan
so, different reports need to take these differently

Sale Bills of FOC goods

For GST, they are a turnover, GST is to be paid
But they are removed / treated separately for the customer account
Hence again ,  different reports need to take these differently

Final submission

All the above are a fact, and all combinations are required.
And Hence should be respected
and should be reconciled internally.

Thus, Finsys team submission is that, accounts is the final repository of all financial data.
And the final report given by P & L Account or Trial balance is the best report
And that must be considered, and given best credence.

Why are the Sales Figures different. in Different Reports. What is the logic behind this ? What is the Truth Reason ? What should I learn ?

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