The Central Goods and Services Tax (CGST) is an important part of India’s GST system, introduced on July 1, 2017. The GST law replaced several old indirect taxes from the central and state governments with one unified system. Let’s take a closer look at CGST, its key features, benefits, and calculation. What is CGST?Beginning with the full form, CGST refers to Central Goods and Services Tax and is a type of indirect tax under Goods and Services Tax (GST) in India. CGST ApplicabilityCGST applies on intrastate transactions, i.e. on goods and services that are traded within the same state. On such transactions, the government collects both CGST and SGST (State Goods and Services Tax).

The Finance Bill 2022 introduced a new section in the Central Goods and Services Tax (CGST) Act, 2017 by way of substituting the existing Section 38. The revised Section 38 was proposed in a bid to further tighten input tax credit (ITC) claims, owing to the extent of ITC fraud that takes place by way of fake entities and fake invoices. The provisions of this section will also help avoid any matters of litigations in the court of law.The revised Section 38 has not yet been passed by parliament nor notified for taxpayers at the moment. However, it could become part of the GST law in the months to come. Latest updatesUnion Budget 2025- 1st Feb 2025Manual validation of invoices may now be required as GSTR-2B may no longer be fully system-generated as CGST Section 38(1) is being amended to omit the expression "autogenerated".New clause (c) under CGST Section 38(2) allows the government to specify additional ITC statement details, increasing compliance requirements.Let’s decode the new Section 38 and find out how it will impact the ITC claims of a business.How does the existing Section 38 govern ITC claims?The existing Section 38 of the CGST Act is titled ‘Furnishing details of inward supplies’. It governed the furnishing of details of outward supplies (i.e.

Accurate and timely financial reporting is critical for managing business finances. However, doing it manually for companies with operations spread across geographies is an endless struggle with collecting, collating and corroborating spreadsheets. Thankfully, standardised business processes, like R2R, have made financial reporting and management much easier. This article discusses everything you must know about the Record to Report process flow.  R2R Full FormR2R is the abbreviation of the Record-to-Report process.  What is Record to Report (R2R)? Record-to-Report is a financial and accounting management practice that aims to standardise the process to capture, collect, process, and timely deliver financial and accounting data accurately for management reporting purposes. Companies with geographically distributed operations or presence in multiple industries with dissimilar financial reporting standards follow R2R practices to maintain parity in financial and accounting management reports.  Common types of businesses following R2R practices: Multinational companies Publicly traded companies Global business process outsourcing companies Large tech companies with global operations Companies managing operations through global business service centres Large consumer goods companies Global e-commerce companies Importance of R2R in FinanceRecord to Report in finance and accounting processes is important for several reasons, like,Compliance Transparency Strategy Audit Compliance - Listed companies and companies with business operations in multiple countries need to comply with regulatory guidelines across different jurisdictions. R2R practices help to maintain uniformity in financial reporting for legal and regulatory compliance. Transparency - The business reputation of a company, to a large extent, depends on how accurately it maintains transparency in financial and accounting reports for internal and external stakeholders.

To run your business smoothly, you must learn how to manage your vendor data properly. Yet, many organisations struggle with incomplete information, outdated records, and miscommunication with suppliers. SAP’s Vendor Master tables provide a structured framework to store, manage, and track vendor information across different domains to address specific challenges you might face in building a reliable community of suppliers. What is the Vendor Master Table in SAP?The vendor master table is a central database used by a company to store and retrieve vendor-related information. This table simplifies how every team of a business, from procurements to accounts payable, interacts with vendors. As every member of your business is accessing unified information, this eliminates the risk of errors, such as incorrect payments or miscommunication with suppliers. When you manage several vendors without streamlined data, it becomes difficult to keep a tap on efficiency and meet compliance with regulations.

Supply chain visibility is a concept that can be game-changing for businesses and keeps them one step ahead of their competitors. It involves collecting real-time data and allowing businesses to track goods at every step of the supply chain. In this blog, we discuss what is supply chain visibility and how businesses can benefit by applying it. We will also explore the challenges companies face, the supply chain visibility metrics and ideas for improvement.What is Supply Chain Visibility?Supply chain visibility gives businesses the ability to track their products and components in real-time, throughout the supply chain, by collecting and sharing data. To put it simply, supply chain visibility aims to monitor the movement of goods across the entire supply chain from the supplier to the manufacturer to the consumer.When the companies have the right data about the supply chain at the right time, it ensures that:The management makes informed decisionsDisruptions are managed proactivelyOperations are optimisedThe process becomes time-efficientSupply chains have grown bigger and become complex over time. More and more countries are dependent on global suppliers who dominate world trade.

Vendor portals are important platforms for businesses who have to deal with multiple different suppliers. They resolve several pain points such as delays in invoice processing or order fulfilment, delayed payments, miscommunication, etc. This article will give you an understanding of vendor portals and their contribution in streamlining supplier collaboration. What is a Vendor Portal?A vendor portal, also known as a supplier portal, is a platform that enables businesses to effectively communicate and collaborate with their vendors on the internet. Vendor portals provide a centralised dashboard which gives both the enterprise and the supplier access to different features such as order tracking, invoice uploading, raising and resolving queries, and more, all from within the portal. Enterprises also get an analytics dashboard to analyse activities across all vendors plus performance reports. This enables them to track patterns and discrepancies and resolve issues faster.Key Features of a Vendor PortalIf you haven’t used a vendor portal yet, here are the features that vendor portals provide that can enhance how an enterprise works with its vendors. Order ManagementInvoice SubmissionPayment Reminders and TrackingVendor Profile ManagementCommunication ToolsDocument SharingBenefits of a Vendor PortalThe vendor portal integration comes with several benefits, such as- Enhanced Efficiency: With multiple vendors involved, vendor portals enhance efficiency through digital document uploads, accelerated invoice processing, automated reconciliations, faster query handling, and one-click payment tracking. Better Communication: Communication with multiple vendors demands time and effort, which can be drastically cut short with the use of vendor portals. Vendor portals enable both the vendor and buyer to get real-time clarity and transparency. Cost Savings: Faster invoice processing and the elimination of late payment fees contribute to lower administrative expenses for the enterprise.Better Compliance: Vendor portals align with existing compliance requirements such as GST, e-invoicing, etc.

Shipping goods comes with freight charges, but how does GST affect them? This article explains how GST applies to freight, whether you can claim ITC, the HSN and SAC codes for freight, and what to expect with the Reverse Charge Mechanism (RCM) on freight charges, etc.What are Freight Charges?Freight charges refer to the expenses businesses incur to transport goods from one place to another. These charges vary based on several factors. The following is a breakdown of the common components of freight charges:ComponentDescriptionMode of TransportThe means used to move goods—road, rail, air, or sea. Each mode has distinct costs.Loading and UnloadingFees for handling the goods at both the origin and destination points.Forwarding CostsCovers safe delivery, packaging, and necessary documentation.How GST Applies to Freight ChargesScenarioGST ApplicabilityExplanationFreight charges included in the sale invoiceGST applies at the rate applicable to the goods soldIf freight is part of the total value of goods, it gets taxed at the same rate as the goods.Freight charges are billed separatelyGST applies as per the freight service rate.When billed separately, the applicable rate depends on the type of transport used.Freight charges paid to Goods Transport Agencies (GTA)GST applicable at 5% (without ITC) or 12% (with ITC) if the GTA opts to pay under forward charge, or 5% (without ITC) under the reverse charge mechanismIn most cases, the recipient (buyer) pays GST under RCM for GTA services. Check the list of  recipients covered under the Reverse Charge Mechanism.Freight charges for the export of goodsExempt from GSTFreight services for exports are generally GST-exempt.Reverse Charge Mechanism (RCM) on Freight ChargesThe Reverse Charge Mechanism (RCM) under GST shifts the tax liability from the supplier to the recipient, ensuring streamlined tax compliance for specific services in the transport and logistics sector. The CBIC notification no. 03/2022-Central Tax (Rate) dated 13th July 2022 clarified the GST rates applicable to Goods Transport Agencies (GTAs) on both a forward and reverse charge basis as follows:Service CategoryGST Rate (%)Special Conditions/NotesGoods Transport Agency (GTA) services - when the GTA does not opt to pay GST on a forward charge basis5%Input tax credit is not allowed on goods and services used in supplying the serviceGoods Transport Agency (GTA) services - when the GTA opts to pay GST on a forward charge basis5% or 12%If the 5% rate is selected, input tax credit is not allowed on goods and services used in supplying the service.(Note that the option to pay GST on a forward charge basis must be exercised by the GTA by filing a declaration.)One must note the following: Other than GTAs or courier agencies, road transportation is exempt from GST. GTAs exclusively providing RCM-liable services are not required to obtain GST registration.Ancillary services (e.g., loading, unloading, warehousing) are part of the composite GTA service if billed together and taxed under RCM.

The applicability of RCM on renting vehicles has helped small service providers with improved liquidity by reducing their GST compliance. Paying GST on forward charge was not possible as they received payment for their services after several months.It was decided in the 37th GST Council Meeting to put the supply of renting of motor vehicles under RCM for suppliers charging GST at 5% to corporate bodies. But, RCM was not made applicable for suppliers paying GST at 12% with full ITC because this would have blocked the ITC chain. Hence, the government’s reverse charge mechanism helped in faster tax collections and reduced payments and compliance on small service providers.Definition and explanation of ‘Motor Vehicle’ and ‘Renting of Motor Vehicle’ under GSTThe word motor vehicle or renting of a motor vehicle is not defined under GST law. But as per Motor Vehicles Act, 1988, a motor vehicle means “any mechanically propelled vehicle used on roads but does not include a vehicle running on fixed rails or a special vehicle used in a factory or an enclosed premises having less than four wheels with engine capacity not exceeding 25 cubic centimetres.”Motor vehicle: Government vide Notification No.29/2019 dated 31.12.2019 replaced the word motor vehicle with “motor vehicle designed to carry passengers, and where the cost of fuel is included in the consideration charged from the service recipient”. Earlier, the term “motor vehicle” covered all types of motor vehicles.

An auditor is required to issue an audit report on the financials of the company. For this, he needs to keep in mind several considerations with regard to GST to ensure that the financials give a true and fair view. This GST checklist discusses the considerations that need to be kept in mind before finalising the profit and loss account and its balance sheet.GST checklist before finalising the profit and loss accountSr. No.ParticularsRemark1Turnover1. A reconciliation shall be done between turnover as per books and returns.

The new return system came into effect on a trial basis from July 2019 and aims to simplify the procedure of filing GST returns. It was planned to be implemented on a full-fledged basis from April 2020 onwards as against earlier October 2019 as per the 37th GST Council meeting held on 20th September 2019. However, it has been pushed to October 2020. Some of the new aspects introduced in the new return system are simple returns forms for small taxpayers, real-time availability of input invoice details, amendment of returns, etc.Lates Updates14th March 2020*The new GST return system will be implemented from October 2020.The present return filing system (GSTR-1, 2A & 3B) will continue until September 2020.*Subject to CBIC notificationWhat are the types of returns to be filed and the frequency of filing them?It is important to note that small taxpayers (having an aggregate turnover of up to Rs.5 crore in the preceding FY) have the option of filing either quarterly or monthly returns. However, large taxpayers (having an aggregate turnover over Rs.5 crore in the preceding FY) have to compulsorily opt for monthly filing of returns.  The types of returns and the frequency of filing them can be summarised in the table below:FrequencyName of the returnDetails to be reportedQuarterly (to be filed by the 10th of the month following the quarter)SahajB2C outward supplies and inward supplies attracting reverse charge can be declared.