Meet Compliance Requirements and Optimize GST Input Tax Credits

Indian corporations overlooked up to 60 percent of claimable GST ITC claims on travel and non-recurring spends. This insight was part of a 5-year assessment by Arbor Research in its report, State of Direct Taxation Report in India: GST Input Credit Challenges for Indian Corporates. This potential quantum of claimable credits is money that could instead be put to use for the business.

To continue forth the next stage of digitalization across India’s business ecosystem, the Indian government is creating a more efficient GST ITC claims workflow that aids the process of running and building a business. This is being progressively addressed in various ways.

Promoting e-Invoices for business transactions

Recently, a new notification issued by the Central Board of Indirect Taxes and Customs (CBIC) under goods and services tax reduced the threshold limit for e-invoicing from INR 20 crore to INR 10 crore, effective from 1 October 2022. With this revised qualifying threshold, businesses  must now issue e-Invoices if their aggregate turnover exceeds INR 10 crore in any preceding financial year from 2017 to 2018 onwards.[1] Further, effective 1 Jan 2023, the threshold for business required to mandatorily issue e-invoices has been further reduced to INR 5 crore. 

This latest revision will push for more organized businesses and stronger digitalization in segments of the Indian economy to strictly comply with the GST regime. The mandate will lead to significant changes in the economic landscape. This includes:  

• Requiring SMEs to issue e-Invoices solutions for uniform interpretation of invoices
• Plugging leakages around tax evaders or errant vendors
• Being interoperable with India’s progressive GST ecosystem
• Embracing technologies that are improving the quality of tax compliance

Reducing Delays

Another ongoing challenge involves reconciling mismatched invoices. In a traditional mismatch, a mandatory credit note has to be issued by the vendor and a new invoice has to be given, leading to another delay of the ITC claim by a month.

The issued credit note can reduce the tax liability of the supplier and incur losses for your business if:

• The vendor has erroneously declared a value which is more than the actual value of the goods or services provided
• The vendor has erroneously declared a higher tax rate than what is applicable for the kind of goods or services, or both supplied
• The quantity received by the recipient is less than what has been declared in the tax invoice
• The quality of the goods or services or both supplied is not to the satisfaction of the recipient thereby necessitating a partial or total reimbursement on the invoice value

The way forward now demands a workflow solution that harnesses the ubiquity of e-invoices, and is interoperable with India’s wider GST ecosystem. This is where real-time reconciliation using automation makes the difference.

Real-time reconciliation achieving 100% GST ITC claim compliance

Finkraft.ai is designed to integrate with India’s GST ecosystem and help businesses optimize GST ITC claims.

Automated real-time reconciliation keeps all records of your business transactions updated, streamlined, and ready for referencing. Invoices and expenses are processed, optimized, and reconciled in a systematic manner. Businesses and vendors have uniform interpretations of invoices. All of this in real time.

Business input spends, non-recurring spends, and cashflow leakages are no longer an uphill climb. Non-compliant suppliers, inefficient reconciliation methods, and ineffective vendor management processes are eliminated with automation.

Finkraft.ai now integrates with SAP Concur solutions, to connect businesses, partners, and vendors at your fingertips for maximum GST ITC claims.

"With the AI engine, invoice management is improved, meeting the tighter compliance codes, and strengthening business-vendor relationships. Users can claim up to 100 percent of eligible GST ITC claims, with automation aiding the workflow in qualifying claims,” said Rohit Anand, CEO & Co-Founder, Finkraft.ai

When invoices are uploaded, Finkraft.ai processes them and generates vendor insights. A vendor score is formulated based on the number of GSTR 1 and GSTR3B filing defaults, and delayed filing return over the past 6 months.

Businesses gain visibility on vendor track records and improve compliance standards through a common score metric. Everyone benefits from a higher standard of compliance.

“Integrating Finkraft.ai with SAP Concur solutions are a clear signal that we want digitization of processes to set the tone for nationwide digital improvements,” he added. We continue to deliver the best in-class travel, expense, and invoice management solutions. Our partnership with Finkraft.ai helps us provide additional support for India’s business, tax and compliance ecosystems, enabling our customers to control expenses and improve profitability,” agreed Anand Agnihotri, Head of Cloud Channel Sales, SAP Concur India.

Get Started

Finkraft.ai’s integration with SAP Concur solutions makes your business processes more compliant, interoperable, and accessible for everyone. Visit our website and discover how to maximize GST ITC claims for your business.

Make the change today, get in touch with an SAP Concur representative here.