CA CMA Syam sundar

  New GST Rule on Credit Notes – Effective 1st October 2025 The Finance Act (No. 7) 2025 ( Section 126 ), read with Notification No. 16/2025–CT, has introduced compliance for businesses issuing credit notes under GST. What Changes? Until 30th September 2025 – Suppliers can reduce their output tax liability on issuing a credit note (subject to customer declaration in case of post-sale discounts). From 1st October 2025 – Supplier will be permitted to reduce their output tax liability only if the registered recipient has reversed the corresponding ITC, if availed. Applicability Applies only to credit notes issued on/after 1st October 2025. Past credit notes (before this date) remain under the old framework, except post-sale discounts, where recipient’s ITC reversal declaration is still mandatory. The new compliance mechanism means Credit Notes flow from supplier's GSTR-1 to the customer's Invoice Management System (IMS) for acceptance. It can be proof of the ITC reversal ...

  To read financial statements, understand the balance sheet, income statement, and cash flow statement, and the notes to the financial statements. Analyze these statements by looking for trends across periods, understanding key ratios, and checking for consistency to get a comprehensive view of a company's financial health, profitability, and cash management. The Three Main Financial Statements 1. Balance Sheet: a. What it shows: A company's financial position at a specific point in time, detailing its assets (what it owns), liabilities (what it owes), and equity (owner's stake). b. Key equation: Assets = Liabilities + Shareholders' Equity. c. How to read it: Look at the types of assets and liabilities to understand liquidity and long-term debt. 1. Income Statement (P&L Statement): a. What it shows: The company's profitability over a period, summarizing revenues earned and expenses incurred to arrive at net income (profit). 2. Key elements: Revenue, C...

  What ITC Means Input Tax Credit (ITC) = The GST you already paid on your business purchases (inputs) can be deducted from the GST you collect on your sales (output). Example: You buy raw materials worth ₹10,000 and pay 18% GST = ₹1,800. You sell the finished goods for ₹15,000 and collect 18% GST = ₹2,700 from your customer. Instead of paying full ₹2,700 to the government, you subtract the ₹1,800 already paid → so you only pay ₹900. This system avoids double taxation. 🔹 Why a Last Date? The government fixes a last date (30th November of the next FY or earlier) because: To close accounts of that financial year properly. To avoid misuse of ITC after too much time has passed. To ensure businesses claim credits in a timely and transparent manner. 🔹 Why You Need to Pay If you don’t claim ITC before the deadline: You lose the right to set it off against your GST liability. That means you will have to pay the full GST amount to the government, e...

  Procurement & Purchase: 1. 𝗣𝗢 (Purchase Order) – A formal document issued by a buyer to a supplier to confirm a purchase. 2. 𝗣𝗥 (Purchase Requisition) – An internal request to procure goods/services before raising a PO. 3. 𝗤𝘂𝗼𝘁𝗮𝘁𝗶𝗼𝗻 (RFQ – Request for Quotation) – A request sent to suppliers asking for price, terms, and availability. 4. 𝗚𝗥𝗡 (Goods Receipt Note) – A confirmation that ordered goods have been received in correct quantity/quality. 5. 𝗜𝗻𝘃𝗼𝗶𝗰𝗲 – A bill sent by the supplier for delivered goods/services. 6. 𝗣𝗮𝘆𝗺𝗲𝗻𝘁 𝗧𝗲𝗿𝗺𝘀 – Agreed conditions on how and when the supplier will be paid 7. 𝗟𝗲𝗮𝗱 𝗧𝗶𝗺𝗲 – The time taken between placing an order and receiving goods. 8. 𝗦𝗼𝘂𝗿𝗰𝗶𝗻𝗴 – Process of identifying and selecting suppliers. 9. 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁 – A legally binding agreement between buyer and supplier. 10. 𝗩𝗲𝗻𝗱𝗼𝗿 / 𝗦𝘂𝗽𝗽𝗹𝗶𝗲𝗿 – The external party providing goods/services. 11. 𝗠𝗔𝗧𝗘𝗥𝗜𝗔𝗟 𝗠𝗔𝗦𝗧𝗘?...

  SAP FICO Technical Tables (with Names) 🔹 General Ledger (FI-GL) Table Description BKPF Accounting Document Header BSEG Accounting Document Line Items BSIS G/L Account – Line Items (Open) BSAS G/L Account – Line Items (Cleared) BSIK Vendor Line Items (Open) BSAK Vendor Line Items (Cleared) BSID Customer Line Items (Open) BSAD Customer Line Items (Cleared) SKA1 G/L Account Master (Chart of Accounts level) SKB1 G/L Account Master (Company Code level) 🔹 Accounts Payable (FI-AP) Table Description LFA1 Vendor Master (General Data) LFB1 Vendor Master (Company Code Data) LFBK Vendor Bank Details BSIK Vendor Open Items BSAK Vendor Cleared Items BNKA Bank Master Data 🔹 Accounts Receivable (FI-AR) Table Description KNA1 Customer Master (General Data) KNB1 Customer Master (Company Code Data) KNBK Customer Bank Details BSID Customer Open Items BSAD Customer Cleared Items 🔹 Asset Accounting (FI-AA) Table Description ANLA Asset Master Record (General Data) ANLB Asset Master Record (Deprecia...

  Three major changes* to the GST return filing mechanism from October 1, 2025. If you handle accounts or return filing under GST, these changes are important for you. *Key Changes:* *Auto-population of ITC* : Until now, input tax credit (ITC) was automatically populated from GST 2B when filing GST Return 3B. This feature will end from October 1, 2025. You will now have to manually access GST 2B to claim ITC. *GST 2B will have to be generated manually:* Data will no longer be populated automatically in GST 2B. You will need to go to the Invoice Management System (IMS) to accept or reject the invoice and generate 2B. Only then will the data from 2B transferred to 3B. *Changes to the taxability of credit notes* : If a supplier issues a credit note and the recipient rejects it in IMS, the supplier's output tax liability will not be reduced. The liability will be added back unless the recipient reverses the ITC of that credit note. This change has been made under Section 34. *Ge...

  Understanding the Different Types of Agreements* Not all agreements are created equal and as legal professionals, it’s important to recognize the nuances between them. Each serves a specific purpose, carries unique obligations, and frames the relationship between the parties differently. Here’s a quick breakdown: 1️⃣ Grant Agreement – Financial support provided (often by governments or institutions) for a specific purpose, with limited involvement from the grantor. 2️⃣ Cooperative Agreement – Similar to grants, but with substantial involvement from the granting agency in carrying out the activity. 3️⃣ Contract – A legally binding agreement enforceable in court, involving obligations, deliverables, and consideration. 4️⃣ MOU (Memorandum of Understanding) – Outlines mutual understanding between parties which are often non-binding but sets the groundwork for future contracts. 5️⃣ NDA (Non-Disclosure Agreement) – Protects sensitive information shared between parties, ensuring c...

  Advisory on GST Rate Change for GTA Services The GST Council’s recent decision to increase GST on GTA services from 12% to 18% (under FCM) has triggered important discussions across industries. Key Impacts & Shifts: 🔹 Working Capital Pressure Under Forward Charge Mechanism (FCM), customers face fund blockage, since they pay higher tax to GTA without having corresponding GST liability. 🔹 Shift Towards Reverse Charge Mechanism (RCM) To manage liquidity, businesses are preferring RCM, where GST is payable at 5% while filing returns and input tax credit is available. This not only reduces fund lockage but also improves cash flow management. 🔹 Compliance Workload – Reduced in RCM Under RCM, the burden of invoice matching, ITC reconciliation, and mismatch risks is significantly reduced. Businesses gain more clarity and control over compliance, lowering operational risks. Legal Considerations: ⚠️ Once opted, FCM or RCM cannot be altered mid-financial year. ⚠️ GTAs shifting to R...

Must-Know GST Documents for Every Business Owner or finance professional Whether you are a entrepreneur or finance professional, understanding GST documents is crucial. Correct documentation not only ensures smooth business operations but also helps in avoiding penalties and staying compliant. Types of Documents under GST 1. Tax Invoice – Issued by registered persons for all taxable supplies (including zero-rated). (Sec 31 r/w Rule 46, 54) 2. Bill of Supply – Issued instead of a tax invoice for exempted/composition supplies. (Rule 49) 3. Invoice-cum-Bill of Supply – When both taxable and exempted supplies are made in a single transaction. (Rule 46A) 4. Receipt Voucher – On receiving advance payment for supply of goods/services. (Rule 50) 5. Refund Voucher – When no supply is made after advance is received. (Rule 51) 6. Payment Voucher – When making payments under Reverse Charge Mechanism. (Rule 52) 7. Debit Note – When taxable value/tax charged is less than actual value/ta...

 Important GST Update – ITC Reversal on Rate Reduction / Exemption As per Section 18(4) of the GST Act (clarified in PIB FAQ, 56th GST Council): 🔹 When the GST rate is reduced OR an item becomes exempt, 👉 Many dealers are confused about whether ITC reversal is required on stock lying as on 21st September. 🔹 No refund of ITC will be given in such cases. 💡 Example: Suppose a dealer has 100 units of an item in stock on 21st Sept. Earlier GST rate = 18% → ITC availed = ₹18 per unit. New GST rate (from 22nd Sept) = 5%. i.e your supply continues to be taxable 👉 No ITC reversal is needed. The ITC already in your electronic credit ledger can be utilised against future GST liabilities. 🚫 Also, no refund will be allowed for excess ITC just because of rate reduction. Inverted duty structure refund is not available in such cases. 👉 However If the item becomes fully exempt, the entire ₹18 ITC per unit must be reversed as per Section 18(4) & Rule 44 on the stock laying as on 21st Sept...

Mr. X have ₹5 crore in assets. On paper, it sounded impressive. But when we broke it down… the picture looked very different. 1. ₹4 crore was locked in a house or Land he couldn’t (and didn’t want to) sell. 2. ₹1 crore was in private investments with zero liquidity. 3. His bank balance barely covered 2 months of expenses. Net worth? Huge. Cash flow? Almost zero. One job loss and he’d be in panic mode. Now compare this with another Mr. Y who had just ~₹50 lakh invested. Not flashy. Not “headline-worthy.” But that portfolio quietly generated ₹4–5 lakh a year in rent, dividends, and interest. - No stress about EMIs. - No anxiety about the next paycheck. His cash flow paid his bills - not his salary. That’s when it hit me: I. Net worth is a snapshot. II. Cash flow is survival. It’s why businesses obsess over cash flow statements more than valuations. And individuals should too. Because you can’t pay EMIs, school fees, or hospital bills with “₹5 crore on paper.” You pay it ...

  Leadership & Life Lessons from Lord Ganesha Lord Ganesha is not just the remover of obstacles, but also a teacher of timeless wisdom. Each of his features holds a deeper meaning — lessons that we can apply both in our personal growth and professional journey: Big Ears – A true leader listens more than they speak. Listening builds trust, empathy, and better decisions. Small Mouth – Communication should be thoughtful and impactful. Talk less, work smart, and let actions speak louder. Small Eyes – Focus is power. Staying sharp on priorities helps us achieve long-term goals without distractions. Big Head – Innovation begins with big thinking. Don’t limit your imagination; dream bold and act with vision. Broken Tusk – Greatness often requires sacrifice. Letting go of something small can create space for something bigger. Large Stomach – Life gives us both successes and setbacks. The ability to accept and digest both with balance is true strength. Trunk – Flexibility is key...

💡 The Role of Finance in Driving Business Growth Finance is not just about numbers—it’s about strategy, control, and decision-making. In my 12 years of experience, I’ve seen how strong financial practices transform businesses: 🔹 Accounts Payable & Receivable → Keeping cash flow healthy 🔹 Compliance (GST, TDS, Taxation) → Avoiding risks & penalties 🔹 MIS Reporting → Turning data into decisions 🔹 Stock, Debtors & Creditors Management → Ensuring working capital efficiency A finance team acts as the backbone of every organization, ensuring that business leaders have the right insights at the right time. 👉 As businesses grow, the role of finance shifts from just record-keeping to becoming a strategic partner in growth

  A structured breakdown based on the GST changes effective 22nd September 2025: 1. GST Rate Structure Old: 4 slabs – 5%, 12%, 18%, 28% New: 2 slabs – 5% & 18%, plus a 40% “sin/luxury” slab Effect: Easier classification of goods and services. Many items have become cheaper (earlier 12% → now 5%). Some items costlier (earlier 28% → now 40%). Engineering consultancy stays unchanged at 18%. 2. Services (like Engineering Consultancy) Rate: Remains 18% (standard service tax rate). Effect: No increase/decrease in GST liability for consultants. Invoices and contracts remain same at 18%. Clients still bear the same tax cost. 3. Compliance & Returns Change: GST return filing/revision is time-barred after 3 years from the due date (earlier no clear outer limit). Effect: Consultants & businesses must file and correct returns on time. No chance to revise old returns beyond 3 years. More discipline in compliance needed. 4. Registration & Refunds Change: New simplified system for...

  The Biggest Control Weakness in Every Company It’s not weak systems. It’s not poor segregation of duties. It’s not careless employees. 👉 It’s the CEO. Here’s the truth nobody dares to write in an audit report: Controls only work if leadership chooses to respect them. ⚠️ Procurement rules vanish with a CEO override. ⚠️ HR policies bend when “star performers” are involved. ⚠️ Financial discipline collapses when the boss says: “Just book it.” And yet—most audits, risk reports, even board papers never say it. Why? Because calling out the CEO feels like career suicide. But history doesn’t lie: ➡️ Enron. ➡️ Satyam. ➡️ Wirecard. None collapsed because a “reconciliation failed.” They collapsed because CEOs overrode every control. The paperwork looked fine. The culture was rotten. So here’s the uncomfortable governance question: 👉 If the CEO is the ultimate control weakness, who is holding them accountable? Audit Committees? Too soft. Boards? Too close. Risk Teams? Too d...

  E-Invoicing at a Glance 1) To Whom It Is Applicable: E-invoicing is applicable to registered persons whose aggregate turnover exceeds a specified threshold in any financial year from FY 2017–18 onwards. Thresholds for Applicability: Turnover Limit Effective Date ₹500 Cr 1st Oct 2020 ₹100 Cr 1st Jan 2021 ₹50 Cr 1st April 2021 ₹20 Cr 1st April 2022 ₹10 Cr 1st Oct 2022 ₹5 Cr 1st Aug 2023 2) Entities/Persons Exempted from E-Invoicing: Regardless of turnover, the following entities are exempt from e-invoicing: SEZ units (not developers) Insurer, Banks, financial institutions, and NBFCs Goods Transport Agencies (GTAs) Passenger transportation services Cinematograph film exhibition in multiplexes Government departments and local authorities 3) Documents Covered Under E-Invoicing: The following documents require e-invoicing: Tax Invoices Debit Notes Credit Notes Related to B2B...

  The financial statements told one story… but the processes told another. During an audit, everything balanced perfectly — revenue matched invoices, expenses reconciled, and the trial balance tied up. But one critical gap stood out: all vendor payments were processed by a single individual without independent review. The numbers looked fine, but the risk of fraud or error was very significant and real. This experience reminded that internal controls are the backbone of trustworthy financial reporting. They don’t just protect balances — they protect the business itself. 💡 Here’s what effective controls should look like: ✔ Preventive controls → segregation of duties, approval hierarchies, access restrictions. ✔ Detective controls → reconciliations, independent reviews, exception reports. ✔ Corrective controls → escalation procedures, timely adjustments, audit trails. For auditors, evaluating controls isn’t a checklist exercise. It’s about: ❗ Testing if approvals are real or j...