Maintain Separate Tax Accounts for Reverse Charge Mechanism and Input Tax Credit

An educative seminar on recently implemented Goods and Services Tax (GST) Regime has been organized by MIDC Industries Association (MIA) for the members of the association. The faculty members attended the seminar on GST namely – CA Rakesh Agrawal, CA Shambhu Tekriwal, trade representative of NVCC and Director of NCCL, CA Eshuji Jain and CA Kirti Agrawal.

While addressing on the GST seminar, CA Kirti Agarwal said that it is essential to maintain records, returns, and accounts under the GST Act, 2017. She further indicated the significance of documentation, accounts, and records has been maintained by traders as per the new GST Act.

CA Ishuji Jain and CA Shambu Tekariwal guided to the participants. They said that manufacturers and traders under GST Act will be required to create proper tax accounts for IGST, CGST, and SGST separately. It should be maintained as per rate wise separately for inward and outward supplies so that they are able to evaluate their tax liabilities or extra credits hassle-free on time.

For Seamless transition of credit paid and discharging the liability under GST, documentation, maintenance of records and accounting will make the complex process easier effectively on the timely basis.

CA Shambhu Tekriwal said: “This will later help them in reconciling the same with their electronic credit ledger accounts while filing the forms and returns under GST. It is advisable to the taxpayers to maintain separate accounts of tax to be paid on Reverse Charge Mechanism (RCM), so that they know the amount of tax liability to be discharged on input supplies to be paid in cash/ bank i.e. to be debited in electronic cash ledger on account of Reverse Charge Mechanism and availability of the same to be utilised as credits once paid off as per the law along with the Input Tax Credits available on inward supplies.”
CA Ishuji Jain said, “On Reverse Charge Mechanism and the credit available on the same. It is advisable to maintain separate accounting ledgers for RCM and Input Tax Credit.”

CA Kirti Agrawal insisted that, Registered traders and dealers under GST, it is compulsory that they maintain the detailed records of inward and outward supplies. Secretary of MIA, C G Shegaonkar, welcomed and introduced the guest on the seminar.

President of MIA, Capt. C M Randhir, welcomed all GST faculties on the seminar. Current representatives of association consisting of PIX Transmission, Mecgale Pneumatics, Jalaram Feeds, Navratna Industries, Nirav Industries, Vishwashanti Udyog, Phoenix Engineering, Duraweld Metsys, Arco Life Sciences, Yash Forging, Onkar Furniech, Tag Glass, Techno Engineering and Rubbers, and many others.