Namaskar ! 

I hope you find this blog in the best of your health.

I just got a call from Karan Ji (name changed), who is one of our clients. Karan has saved approximately Rs. 79 Lacs of GST in the month of July, and he was really happy with the amount saved.

I wanted to share how this happened with you, so you can implement the same techniques in your business and save extra money.

Know a bit about Karan

Karan Ji owns a company which has a turnover of around Rs. 300 Crores. The product in which the company deals comes in the 18% GST category.

Let's understand the problem

The company has been availing Input Tax Credit every month; however, they have been getting a mismatch in GSTR 2A along with non-compliance issues in 36(4).

They knew about the root of the problem. They were dealing with a lot of vendors, and some of these vendors were:

1.  Claiming ITC but not filing their GSTR 1;

2.  Not completing their 3B obligations;

3.  Not registered with GST as the department has cancelled their GSTR numbers;

When they sat and made a list of all such vendors, the number was 77 vendors, and the amount was approximately Rs. 82 Lacs for June.

This became a big point of worry as all this amount was blocking the working capital, and there was also a risk of losing all this amount. The risk was there because if the amount does not reflect in 2A, or if the vendor GST number is cancelled with GST, or if the 3B obligation is not met, it would mean that they would not be able to claim the ITC.

After thinking for a while about the problem, they finally came to our office and told us everything about the issue.

After listening to everything, our team started by sharing the solutions with them. We told them that they should take care that:

1. Reconciliation should be done with 2B and not 2A.

2. The vendor should file his/her GSTR 1 and 3B.

3. The vendor should be existent when the department tries to find him/her.

4. ITC can be claimed only when the goods or services have been actually received. This means that the E-way bill has to be checked.

5. The vendor should make sure to complete the payment in 180 days and also safely maintain the bill.

Karan Ji got frustrated when our team was speaking and interrupted them by saying that he know all this, but the problem is not the knowledge but the implementation. Karan Ji told them that it becomes challenging for his company to identify non-compliant vendors. Even when they find those vendors, it becomes cumbersome to follow up again and again.

As soon as I came to know about the real concern of Karan Ji, I joined the meeting with our Data Consultant and Tax Tech Team. I then told him that what he needs is the power of technology to do all these tasks for him. I told him about our software which is powered with AI, BI and stores everything on the cloud.

I told him that:

1. Vendor Scorecard

Our software has a Vendor Scorecard that gives every vendor a score based on his/her return filing pattern. After a few red flags, you will get an idea of the vendors to choose and the ones to avoid.

2. Fast Auto Reconciliation with Validation Parameter

It is common for businesses to reconcile their data in excel, which is one of the most cumbersome tasks. After reconciling the data, companies usually share the reconciliation status with their vendors on Email with a screenshot or an excel file.

This process takes hours and becomes more challenging to track when you sit to follow up the next time.

3. Notification to all Vendor on a click with Separate Statement of Matched, Not Matched, In Books but not in 2A and vice – versa

Our software does this reconciliation in real-time in minutes rather than days, and not only that, but it sends a notification on email to the vendors with a single click. You can notify the non-compliant vendors in a single click after the software finds the problems within a few minutes of reconciling with respect to separate tables for Matched, Mismatched, Not in Books and Not in 2A.

What happened after this?

Karan Ji asked me to integrate our software with their data and start fixing all the problems.

In July, we started by uploading the data and reconciling it. We got a list of the non-compliant vendors to whom we sent the notification email with a single click.

We started getting responses from the vendors, and most of them completed their obligations.

In the month of July, the number of non-compliant vendors reduced to 8 and the mismatch amount reduced to Rs. 2.8 Lacs.

Karan Ji is on cloud nine and couldn't be happier!

You can also get the same happiness and convenience for your business.

Contact us to know more.

Thanks & Regards

DOST Vikash Dhanania