1. Localizations for India Implementation Guide
  2. Generating the Tax Liability Reverse Charge Report

Generating the Tax Liability Reverse Charge Report

You run the Tax Liability Reverse Charge program (R75I801) to adjust the cash ledger with the GST amounts that the goods or service provider must pay to the fiscal authority. For the GST unit and the date range specified in the processing options of the R75I801 program, the system processes the records from the GST Tax File table (F75I807) and the Accounts Payable Ledger table (F0411) that are posted, not voided, and are applicable for reverse charge. The system offsets tax liability from the GST cash ledger and updates GST ITC ledger for all the processed transactions with CGST, SGST, IGST, and GST Cess, and:

  • Updates the tax liability reverse charge batch number in the F75I807 table.

  • Updates the closing balance for the GST cash ledger and GST ITC ledger in the GST Ledgers Setup table (F75I804) and GST cash ledger entries in the GST Ledger table (F75I823).

    The GST ITC ledger is updated for the next period available in the GST Ledgers Setup program (P75I804). For example, if the GST cash ledger is updated for the January 2018 period, the GST ITC ledger is updated for the February 2018 period.

The R75I801 report includes primary transaction details and the basis on which the reverse charge was calculated, such as the service category code, provider and receiver percentages, tax amount, and the applicable tax rate. The R75I801 report also includes the recoverable flag to indicate whether the transaction is of recoverable or nonrecoverable type.

For suppliers on which the advanced payment is applied, the R75I801 report includes the advance payment offset details for those transactions. The report offsets the GST paid on advance payment from the voucher or purchase order. The report matches the advance payments with the voucher or purchase order based on the supplier, business unit, GST rate type, recoverable flag, and receiver percentage. The system saves this information in the GST Reverse Charge Offset Advance Payment - P2P table (F75I849).

The R75I801 report offsets GST on advance payment only for those transactions for which the advance payment date is the same or earlier than the transaction date.

If the processing option for R75I801 is set to display an error if the GST cash ledger does not have sufficient balance, then an error is displayed if sufficient balance is not available in the GST cash ledger.

You can run the program in proof or final mode. In final mode, the system updates the Processed Reverse Charge File program (P75I813) with the batch information for the records that were generated successfully using the R75I801 program. You can use the P75I813 program only to review batches processed within a specific duration for a GST unit. The system stores this information in the Processed Reverse Charge File table (F75I813).

When you run the R75I801 program in the final mode, the system:

  • Updates the GST Cash Ledger

    • Credits the permanent GST cash ledger account with the recoverable and nonrecoverable receiver amount for the processed transactions.

    • Debits the intermediate ITC account with the GST recoverable receiver amount for the processed transactions.

    • Debits the nonrecoverable account with the nonrecoverable receiver amount for the processed transactions.

  • Updates the ITC Claim Accounts

    • Credits the intermediate ITC account with the total GST recoverable amount for the processed transactions.

    • Debits the permanent ITC account with the total GST amount for the processed transactions.

When the cash ledger accounts are updated, the G/L date is the date specified in the processing options of the R75I801 program. If a date is not provided in the processing options of R75I801, the system date is used as the G/L date. When the ITC claim accounts are updated, the G/L date is the first day of the next period setup in the GST Ledgers Setup program (P75I804).