It’s been a few days left for the Union Budget 2020 presentation to take place in Parliament and the trade body Federation of Indian Chambers of Commerce & Industry (FICCI) has put forth another proposal.

FICCI is sighing for excise duty benefits for the producers in the petroleum sector on their output against GST payments they made on inputs.

In the pre-budget proposals, the industry body expressed that the producers of petroleum and natural gas should be permitted to negate the ITC for Goods and Services Tax (GST) that these producers pay on inputs against the excise duty impossible on their output.

Under the current scenario, petroleum crude, petrol, natural gas, high-speed diesel and aviation turbine fuel are out of GST ambit. When the GST was implemented in July 2017 with an objective of “one-nation-one-tax”, these five petrol-products – petrol, crude oil, diesel, natural gas and aviation turbine fuel (ATF) were kept out of GST purview.

So, accordingly, the input tax credit of GST liability executed on procurement is not permitted against the output tax liability to the supplier of the respective products and so it becomes an additional cost for the oil and gas companies.

According to the industry body, till the time GST gets implemented on petrol-products, appropriate amendments in the CENVAT (Central Value Added Tax) rules will bring down the production costs for oil and gas corporations.

At present, the government is of the view that petrol and diesel should be brought under the purview of GST. The first Union Budget for the whole year under the governance of Prime Minister Narendra Modi will be presented on 1 February 2020 by the Finance Minister Nirmala Sitharaman in Parliament.

FICCI, in its pre-budget memorandum 2020-21, also urged for clear interpretation and changes in the Taxation Laws (Amendment) Bill, 2019, for the best utilisation of cuts in corporate tax rates by the current as well as upcoming domestic companies and the clearance of higher surcharge by non-corporates on some selected capital market transactions issued via the Bill.

Payroll is the most required management software by the corporate offices and large business houses for the overall maintenance of employees and their designated profiles. The payroll software also helps in generating salaries and arrears for the employees along with the attendance and other statutory compliance required by the government for the companies. Here we will go through all the general and frequently asked questions on payroll software and understand the basic issues under the payroll management.

Q.1 – What is the meaning of payroll software?

Payroll is a part of Human Resource Management system which refers to the list of total employees and total wages paid to them. It also includes the calculation of salary after the addition of bonuses & incentives and subtraction of various deductions such as TDS & various other taxes, etc. These days many Payroll softwares have emerged out that automates the work of HR manager, Gen Payroll software for employees management is one of the leading software that comes with exquisite features.

Q.2 – Who are payroll services providers?

Payroll Services Providers are companies which caters payroll services or to whom payroll responsibilities of an organisation can be outsourced. These are outsiders specialized in payroll service and manages payroll of another company.

Q.3 – Is there any payroll software which is available for free trial?

Trial version of Gen Payroll is available for free download. However, it’s all exclusive benefits can be enjoyed after paying a nominal fee. Gen payroll is available in online as well as offline version of PC & desktop. The demo version remains active for 10 hours time frame.

Q.4 – What are the benefits of payroll?

Payroll auto reads the attendance of employees followed by the auto-calculation of their salaries. It also keeps annual reports and payslips stored in readily accessible yet confidential manner.

Q.5 – Why payroll softwares are gaining popularity these days?

Big or small, employees are one of the best resources of any organisation who craftly use other resources to yield maximum benefits and so is the management of Human resources holds utter importance. Human resource management includes upkeeping of employees’ databases, providing them proper incentives, maintaining their leave records and so on. Manual execution of these tasks is quite arduous and prone to the risk of inaccuracy and mismanagement. However, the invention of HR management or HR payroll software for the management of employees has solved the issue as it effectively & efficiently manages the Human Resources.

Q.6 – Which features determines an ideal and innovative payroll software?

An innovative and ideal payroll software should have the following features:

• Daily attendance records
• Few clicks salary calculation
• Statutory compliances
• Update leave records
• Online and offline versions
• Easy calculation of TDS & reimbursements

Q.7 – How do payroll calculates gross salary of an employee?

Payroll calculates gross salary of an employee by multiplying the total number of hours worked in a pay period with the hourly wage rate.

Q.8 – How can we find the best payroll for our company?

The best payroll for a company can be determined by properly weighing its pros & cons and taking a demo. Smart way to choose the most appropriate software is to download the free trial of some leading payroll software and see which one greece the wheels for you.

Q.9 – Why a company should use payroll software?

Success of an organisation depends on its employees. Improper management of employees, their database and salaries lead to stress and demotivation for them which further results in inefficiency. This not only hamper the growth of an organisation but also divert Human Resource Managers and other supervisors from focusing on their core business activity. Whereas, a duly chosen Payroll software automates the work of HR managers and let their skills be invested in other activities such as formation of new employees policies, handling their queries & grievances, conducting activities for employees, etc which acts as motivational tools for employees.

Q.10 – Which is the easiest software to use?

Gen Payroll is the easiest payroll software which is highly recommendable for small businesses as it includes complete HR & Payroll management along with tax support. Gen Payroll, invented by SAG Infotech, is also one of the customer-friendly and low cost payroll software. SAG Infotech provides all day long customer care services to its customers which further ease the tasks for you.

Q.11 – What are payroll entries?

Payroll journal entries refers to the record of compensation given to employees. These journal entries are then recorded into the financial statements of the entity via general ledger.

Q.12 – Which are the top rated software of 2019?

Gen Payroll is the top rated software of 2020. Gen Payroll is widely used and appreciated Payroll software. More than 1000 clients from India calls it a best software that is compliant with statutory norms.

Finally, we have come through all the frequently asked questions based on payroll software for management companies and big organizations. The Gen payroll is one such solution for all the management companies to tackle all their payroll related issues and to further manage the complete process of employees via the sophisticated payroll management software as offered by the Gen Payroll.

The department under GST is finally extending notices to on business whose accounts are required to get audited as per the norms. Cordial notices are being sent by the government to businesses for the first year of GST (2017-18).

There are three basic kinds of audits under GST, the first one focuses on the business where the annual turnover is more than Rs. 2 Crore, such businessmen are required to get their accounts audited by a Chartered Accountant or a Cost Accountant and furnish the reports in GSTR 9C (Audit Form) respectively. The second audit signifies a special process under which the Chartered Accountants or Cost Accountants designated by the Tax Commissioner conducts the audit on the commands of the Deputy/Assistant Commissioner, any minor default in the reports the second audit is subject to tension on a big level.

The third kind is the general audit where the local tax authorities process audits for individual taxpayers. As declared by some influentials in the field, the period of continual audits has arrived in which the taxpayers (either entities or individuals) have to prove the authenticity of the tax paid and the credit claimed by them on the inputs by furnishing the accounts of their sales, profit, and purchase to legal authorities.

Being the first audit session after the implementation of GST (Goods and Services Tax), the official involved in the process are expected to pay extra attention to examine all the documents depicting the financial architecture of a business or income of an individual. Such documents include financial statements, directors’ reports, GST filings, income tax filings, tax audit reports, cost audit reports, internal audit reports, agreements, purchase orders and many more, they said.

Time Limit for Furnishing the Audit Reports

Held under the surveillance of Section 65 of the GST Act, the general audit is supervised by the group of GST officials either from their offices or the site of business. As per the norms, the concerned assessees are likely to receive an intimation of audit 15 days prior to its conduct. The deadline for completing the audit is 3 months starting from its commencement, in special cases, if the audit is extended then the very edge is six months from the date of its actual commencement.

While conducting the audit, the concerned official may ask for the set of facilities required to verify the books of accounts providing which is the sole responsibility of the assessee. Providing all the relevant documents required to audit the accounts is the prime duty of the assessee so that the process takes no more than the designated time limit and there is no inconvenience caused to the participants in the audit.

Following the conclusion of the audit, the concerned audit officer will extend a legal intimation to the taxpayer regarding the outcomes of the audit and further obligations (if any) from his (taxpayer) side along with proper reasoning. The assessee is subject to further investigations if the audit team finds any of the incidences when the tax is not paid or the less amount is paid or ITC is wrongly claimed by the assessee.

Following the arrival of audit notice by the legal department, the taxpayer should start preparing for the major event dates by accumulating all the related documents and records of the said financial year (various return forms of the year GSTR1, GSTR 2A, GSTR 3B, GSTR 9 and GSTR 9C), registration certificates, balance sheets, directors/self-audit reports, returns furnished to banks / financial institutions (if any), cost audit, tax audit & internal audit reports, electronic credit/cash ledger, abstract of output services invoices & input services, work order/purchase order/agreements, filed the forms as prescribed by GST Audit manual and copy of last general audit report.

A panel of officers aimed to improve the current condition of the good and Service tax (GST) has received a suggestion to replace the current slab scheme with a new slab scheme by putting two slabs of 10% and 20% and an additional third slab for sin and luxury goods.

Currently, the committee has not taken any decision they are just listing them before GST council meeting, which includes Union and state finance ministers. In the meeting which was held last week, the council and members did not talk on this matter and also asked the officials to conduct a fresh/ assessment of the scope and impact as ministers believe that the research and analysis were not complete. On the other hand, Several State finance ministers, even from BJP-ruled states, said that they did not support any move of increment in GST rates.

The committee is getting suggestions from stakeholders, and the suggestions did not stop at only reworking the GST slabs. From withdrawing tax benefits on some items, to increase the tax on education and health, they are getting all types of recommendation. Apart from making goods, they also get suggestions to raising taxes of phones from the current level of 12% and reversing the previous changes done on several items by changing taxation from 28% to 18%, which also includes perfumes and refrigerators.

There is also a suggestion to increase the levy on precious metal, such as increasing gold from 3% to 5%.

However, the committee was established to bring a road map for the restructuring of GST to improve its efficiency, increase benefits, and also generate more resources at a tensed time when collections have decreased significantly and threaten to impact central and state finances. There are various other proposals and suggestions to repair the administration to improve compliance, including widening the scope of tax deducted on source and e-invoices, some of them are already under implementation.

The Delhi High Court underlined that the Goods & Services Tax (GST) regime intents to facilitate the assesses and not to make them suffer due to technical failures & faults so the software system should be maintained & regularly updated with the amendments in rules & regulations.

Delhi HC said that the rights of individuals registered under GST ‘cannot be subjugated’ to the incompetent and inadequate software systems taken up by the tax authorities. The court’s ruling is anticipated to be beneficial for the GST registered assesses who are facing hardship due to technical problems.

The court ruled, “The software systems adopted by the respondents have to be in tune with the law, and not vice-versa. The system limitations cannot be a justification to deny the relief, to which the petitioner is legally entitled,” in an issue associated with the repudiation of the use of unutilized Input Tax Credit (ITC).

Harpreet Singh, Partner at KPMG, appreciated this ruling and said that the order seems to give long-term positive domino results under GST. As the people’s dependence on technology is increasing, it is quite obvious that technical insufficiencies and outdated software would adversely affect the statutory filings or the ideal balances at the portal.

He said, “Post this order, dealers should be able to claim their rightful benefits/ dues without worrying about technological handicaps, so long as other statutory conditions are satisfied.”

The rollout of the Goods & Services Tax regime was followed by the introduction of a special provision that allows the transition of credit amassed under VAT, service tax or excise duty to GST. This opportunity to claim transitional credit is available for all the assessees other than the registered dealer who opted for the GST Composition Scheme.

However, transitional credit was subject to some conditions. The first condition limit the availability of the credit to the condition when the returns for the last six months, i.e., from January 2017 to June 2017 were filed under the VAT regime.

The second condition mandates the filing of Form TRAN 1 by registered individuals under GST (who may or may not be registered under VAT regime) by December 27, 2017, to carry forward the ITC.
The third condition restricts the rectification of Form TRAN 1 to only one chance.

Respondents’ Stagnation

The petitioner appealed HC to file the grievance of the inactivity of the respondents i.e. the GST authority at the state level and their inability to allow the flawless transfer of the credit available by dint of unutilized input tax.

The petitioner filed the petition as he was unable to use and employ the ITC while exporting in the months of July and August 2017. As a result of which, the petitioner had to give away INR1.37 crore which could have been saved or invested if he had been allowed to use ITC that had accumulated even before the introduction of the GST regime.

The court, after taking hearing both sides, concluded that the petitioner cannot be made at disadvantage due to incompetencies of the respondents in designing glitch-free transition from pre-GST regime to GST mechanism w.e.f. July 1, 2017.

“The business activity in the country cannot be expected to come to a standstill, only to await the respondents making the GST system workable,” it said.

“Unfortunately, even after the passage of over two years, the respondents have not remedied their omissions and failures by taking corrective steps. They continue to take shelter in the limitations in, and the inability of their software systems to grant a refund, despite the same being justified,” the court stated.

As per the recent update, the government is planning a beneficial step for companies undergoing resolution process under the IBC. IBC is an acronym for Insolvency and Bankruptcy Code.

There is some talk going on between the Ministry of Corporate Affairs and Department of Revenue (DoR) and a framework is expected to be revealed soon. A senior officer said that “The issue is under discussion… a procedure will be worked out,” The other person said that to finalise the contours, a meeting between officials is gonna organized this week.

As per updates, They are planning to allow companies undergoing resolution process to pay current levies of GST without the mandatory payment of past dues. This step will eliminate the obstacle in the bankruptcy resolution process.

At present, a firm is not allowed to file current tax dues if it has some past dues under the GST framework. Penal action has also been initiated for noncompliance in such cases where the GST registration has been cancelled or insolvency resolution process has been initiated.

Thus it comes in the way of efforts to revive a company under the IBC process and also delaying the resolution process. Many Industry organisations have lobbied the government and this step, asking it to accept current GST without the mandatory payment of past dues.

Many experts also stated that GST and IBC need to be aligned which is now initiated indirect taxes leader, PwC. Pratik Jain also said that “It is important that the period during which the corporate insolvency resolution process (CIRP) takes place is insulated from the past GST compliance of the company.”

MS Mani, partner, Deloitte India said on the same issue that “There is a need to recognise the fact that there could be several cases of default in GST filings/payments due to genuine reasons, Such defaults should be condoned, possibly with a small penalty and the focus should be to avoid business disruptions.”