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The Points to consider while implementing new Tax software solutions

Tax software solutions can simplify complex procedures for large multinationals as well as a small company. Tax obligations have changed a lot in India since the introduction of the Goods and Service Tax Besides the four types of GST, companies also need to pay other taxes and cess. Thus, tax software can make things easy.  

Is the software GST complaint and programmable for changes?

Initially, GST was designed to support the “One Nation One Tax” theory. However, the four slabs and sub-types (CGST, SGST, IGST, and UTGST) have made things complicated. The filing and invoicing, claiming input tax, etc. make it a complex tax. Plus, there are sector-specific cesses that firms need to pay over and above the GST. 

The Goods and Service Tax rates for the same food items differ according to the place where the consumer buys the same. Pastries sold by a sweet or cake shop attract 18 percent GST. However, the same product sold by a pastry shop with a restaurant like tables and chairs set up attracts just 5 percent GST. Thus, as of now, the software does not eliminate the need to seek help from accountants due to lack of clarity on multiple issues. If you are a trader who wishes to learn the tax system inside out, you can consider opting for Account & Taxation Course Ahmedabad.

Does it offer the necessary features?

The critical feature to look out for is the software’s ability to generate perfect GST invoices systematically.  The requirement to submit HSN-wise details about goods purchased and supplied is one of the complex procedures for any business. The software solution should be able to generate the same. The government often introduces some or the other amendment in the GST. So, the platform should be programmable when it comes to making such changes.

Categorizing expenses as per multiple categories, maintaining records for purchase orders and inventory purchases for future accounting reference, are features offered by all tax software these days. 

The platform should also be able to maintain a state-wide database for suppliers, vendors, and customers along with monthly transactions made with them. Such records play a crucial role in tallying CGST, SGST, IGST, UTGST, as well as other cess liabilities applicable to specific products that the firm sells. The software’s ability to integrate with existing ERP, CRM systems in the organization can be a plus point.

Generating Bank Reconciliation Statement (BRS), statements for e-TDS/TCS transactions, calculating details about accounts payable and receivables, creating profit-loss statements, trial balance reports, and ability to record journal voucher entries are other functions that the platform needs to offer.  It should also have a GSTN validator, show notifications for mismatches, and needs to be able to integrate with existing human resource accounting and compensation management systems in the organization. 

The platform should offer both, online and an offline mode so that you can save the transactions even while the internet connection is unavailable. 

Intuit Quickbooks, Clear Tax, ZOHO Books, TALLY ERP 9, ProfitBooks, and Quicko are some of the reputed software solutions in India. However, these are not the only options, and some local players also offer tailor-made solutions according to the firm’s business requirements. 

Not a support system but the need of the hour

A company that operates in almost all states in India is expected to file 725 returns each year under the GST regime. So, a GST compliant accounting software is not a support system, but the need of the hour. The platform would make sure that the organization uploads accurate invoices while filing returns on time to avoid penalties.

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