Government of India
Ministry of Communication
Department of Posts, PAF Wing
(CSI SECTION)
STANDARD ACCOUNTING PROCEDURE (SOP) FOR GST UNDER RCM ON THE INCENTIVE PAYABLE TO THE SALES FORCE OF PLI/RPLI
(Ver 1.1)
Download PLI RPLI Incentive GST SOP In PDF
File No: PA/CSI/04/112/21-22 Issued on 08/05/2022
Table of contents
1. Introduction
2. Incentive payable with IT TDS & GST under reverse charge mechanism
3. Availing input tax credit
4. Heads of accounts & GLs to be created
5. GST under reverse charge mechanism - 8446-00-101-91-00-00
6. Accounting principle
7. The payment mode scenarios
8. PLI- accounting entries for incentive to the sales force
9. Payment made by cash
10. Payment made by cheque / NEFT
11. Payment made by POSB credit
12. RPLI – accounting entries for incentive paid to sales force
13. Payment made by cash
14. Payment made by cheque / NEFT
15. Payment made by POSB credit
16. Payment of GST under RCM to GST department
17. GST returns
18. IT TDS returns
19. Role of Head Post Offices
20. Role of Postal Accounts Office
21. Pre accounting sheet for PLI/RPLI incentive payments
22. Illustration of PLI / RPLI incentive payments
STANDARD ACCOUNTING PROCEDURE (SOP) FOR GST UNDER RCM ON THE INCENTIVE PAYABLE TO THE SALES FORCE OF PLI/RPLI
1. INTRODUCTION
Incentive paid to the PLI/RPLI Sales Force (Development officer, IP/ASP, Departmental employees, Gramin Dak Sewaks (GDS), Field Officers & Direct agents), attracts GST @ 18% (CGST-9% & SGST/UTGST-9%) along with TDS on Income Tax @ 10% as decided by the PLI Directorate. As the individual Sales force do not have GST registration, applicable GST on this Inward Supply by the sales Force, is to be paid by DoP to GST Department under “Reverse charge Mechanism”.
2. INCENTIVE PAYABLE WITH IT (Income Tax) TDS & GST UNDER REVERSE CHARGE MECHANISM
PLI/RPLI Incentive is calculated and processed in Mc.Camish, The accounting entries are to be posted manually in SAP till PLI-GL Integration takes place. Net amount is to be paid to the Sales Force after deducting applicable IT TDS on the Incentive amount. Further, GST on the gross incentive paid (excluding IT TDS) amount, is to be paid by DoP to GST Department. (Refer Illustration for accounting in Annexure-II)
3.AVAILING INPUT TAX CREDIT
The amount paid to GST Department under Reverse Charge Mechanism (RCM) can be considered for claiming eligible Input Tax Credit. However, the total Input Tax Credit that can be claimed for all the Inward Supplies against the total Outward Supplies under the GSTIN ie., by the DDO, to be assessed and claimed.
4. HEADS OF ACCOUNTS & GLs TO BE CREATED
A. GST under Reverse Charge Mechanism - 8446-00-101-91-00-00
8446 -Postal Deposits
00- Postal Deposits
101- Postal Deposits
91- GST under Reverse Charge Mechanism.
00- GST under Reverse Charge Mechanism
00-Default
To accommodate accounting of receipts and payments separately, it is proposed to create three GLs, as mentioned below under the new head of account (8446-00-101-91-00-00) & 002100102090000
88446XXXXX (Credit): GST under Reverse Charge Mechanism- Insurance Sales force
48446XXXXX(Debit) : GST under Reverse Charge Mechanism- Insurance Sales force
XXXXXXXXXX (credit) Deduction from Insurance Commission etc under sect194-D
5. ACCOUNTING PRINCIPLE
(a) GST under RCM on the incentive payable to PLI/RPLI Sales Force is initially credited to 8446-00-101-91-00-00 and reflects on the receipt side in e-Lekha.
(b) At the time of payment to GST department, the amount is debited from 8446-00-101-9100-00, which reflects on the payment side in e-Lekha.
(c) Each month, the amount reflecting under 8446-00-101-91-00-00 receipt side and payment side should be equal in e-Lekha, in respect of the particular DDO.
6. THE PAYMENT MODE SCENARIOS ARE
a. Through Cash
b. Through Bank / NEFT
c. Through POSB Credit
7. PLI- ACCOUNTING ENTRIES FOR INCENTIVE TO THE SALES FORCE
8. RPLI – ACCOUNTING ENTRIES FOR INCENTIVE PAID TO SALES FORCE
a) Payment made by cash
b) Payment made by Cheque / NEFT
c) Payment made by POSB credit
9.PAYMENT OF GST UNDER RCM TO GST DEPARTMENT
The amount credited as GST under RCM, at the time of incentive paid to Sales force, is to be remitted to GST Department and file GST returns.
10. GST RETURNS
While filing GST Returns, [GSTR-1 B2C Category-Reverse Charge Mechanism], though no separate accounting in CSI is required for CGST, SGST/UTGST, the total amount debited as above is to be filed under the relevant column viz., CGST, SGST/UTGST. This will facilitate while claiming ITC under CGST, SGST/UTGST, as the case may be.
11. IT TDS RETURNS
The amount deducted and accounted under IT TDS to be filed against the PAN of the respective Sales Force.
12. ROLE OF HEAD POST OFFICES
(a) Pre-Accounting sheet to be prepared before accounting entries are posted manually
(b) Accounting entries are to be posted in SAP after verification with concerned reports.
(c) Relevant remarks are to be entered in SAP for each debit / credit entry, to identify nature of the entry
(d) At the time of disbursement of PLI/RPLI incentive to sales force, GST amount deducted from PLI/RPLI MH-8016, is to be accounted as per pre accounting sheet.
(e) When incentive is paid through POSB credit, Salary payable GL (4200039999) should be nullified at the end of the day with respect to the Incentive paid entries posted on the day.
(f) GST Amount credited under Reverse Charge Mechanism for PLI/RPLI incentive payments, to be debited and payment made to GST Department.
(g) File GST returns under the relevant part for Reverse Charge Mechanism in GST portal
(h) File IT TDS Returns
(i) Records / registers to be maintained with the above details for audit (Internal Audit /DG(F&C) Audit / GST Audit)
13.ROLE OF POSTAL ACCOUNTS OFFICE
Accounting
(a) Ensure that the total amount accounted under RCM –Receipt side is equal to the total amount accounted under RCM-Payment Side (in GLs / e-Lekha)
(b) Discrepancies noticed in respect of any DDO is to be got rectified by taking up with the respective DDO.
(c) Check the Salary Payable GL 4200039999 for the payments
(d) Check the reports in Mc.Camish with reference to the Accounting Entries posted by each DDO
(e) Review the implementation of Standard Accounting Procedure and submit periodical report with observations of discrepancies / inconsistencies, if any, to CSI Section of PA Wing Audit
(f) During the Internal Audit, check the records / registers maintained by the DDOs with reference to Mc.Camish Reports Coordination
(g) Coordinate with PLI Directorate with respect to Mc. Camish (User Access / Reports / Technical & Functional issues etc.,)
