Hotel GST Reconciliation
industry first 3 step hotel GST reconciliation solution
Problem Statement
Reconciling the ITC available against the hotel booking undertaken by a corporate for the purpose of business activity is extremely complex owing to place of supply rules governed by CGST Act, 2017. For this, TraCarta assists in collating documentation leading to extraction of correct information for taking the right ITC.
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This is where TraCarta as a travel tax services firm offers specialised Travel GST Reconciliation including a comprehensive solution for Hotel bookings, thereby assisting corporates in undertaking a seamless reconciliation of GST invoices pertaining to various travel bookings giving options and functionality that are required to ensure that there is a comprehensive coverage of transactions.
What Actually Creates Problem
Managing and reconciling the ITC available against airline booking made for the purpose of business needs with the entries posted in the purchase register can be an overwhelming task. With the objective to achieve a clear position of the ITC that is creditable and ensure that there is no loss of credit, it is imperative to note the key problem areas.
Input of Correct GST Details
The place of supply rules mandates that for hotel being an immovable property, the place of supply is located in the state where the hotel is situated and the corporates have to incorporate its GST details of the same state to get the ITC. Incorrect information is an aspect that has been observed in a lot of cases.
Collation of Invoices
Collation of the invoices is another issue that has been observed for most of the corporates.
Impeccable Solution for ITC Reconciliation
Our proprietary 3 step reconciliation approach
Documentation Management
Collection of documentation from government supported e-invoice portal for all transactions where the hotels are registered under the e-invoicing regime.
Extraction Management
TraCarta collates the documentation, at first ensuring that for every hotel booking, the invoice is available and extracting the key data points for reconciliation process.
Reconciliation Management
The final step of reconciling the data populated MIS with the GSTR2B is to ensure that no transaction is left out. In case of any discrepancy, appropriate reporting is done.
Success Parameters of TraCarta’s Process
The starting point for TraCarta is to take the transactional statement issued by the travel agent and collect the documentation from the government supported e-invoice portal for all transactions where the supplier, ie., the hotel is registered and is covered under the e-invoicing regime.
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With TraCarta, the clients can be sure that the documentation for all the transactions where the supplier is registered under the e-invoicing regulations are covered and there is no transaction that is left out. In case of non availability of the documentation, the reasons in detail are identified and are provided as part of the standard audit report.
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With TraCarta HotelX© superior machine learning technology, the relevant data points are extracted against each line of transaction to ensure that there is data sufficiency for undertaking an end-to-end reconciliation process.
uThe end deliverable to the client is a comprehensive report with the requisite information and data points including the invoices and credit notes issued by the airlines for claiming the GST charged respectively by different stakeholders.
The only point of consideration is that hotel e-invoices are only available up to 6 months in retrospect, which means that the documentation is available up to 6 months in the past from the date of extraction.
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High Quality Deliverables for Clients
Supplier Documentation
Complete set of invoices and credit notes issued by the airlines in an organised manner
2 Way Reconciliation
Industry first 2-way reconciliation between airlines documentation and GSTR2B (Government provided ITC Statement) in a ready to consume report to ensure a comprehensive completion rate
Missed Report
An in-detail report stating the transactions where the travel agent did not pass the GST details at the time of issuance of the ticket
Recapping Benefits
Reconciliation of hotel documentation for claiming the correct and legitimate ITC making the overall travel program contribute to the cash flow
The solution clearly focuses on ensuring that the ITC that is available and which are supposed to be claimed (In case of missed out transaction is available) by completing the entire loop of service right from acquiring the documents to getting it reconciled while extracting the relevant fields and information along with the documentation is provided for making sure that even from an audit perspective, it is complete.
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All this is done through use of robotics and automation with an objective of achieving a comprehensive result for all the transaction so that there is no loss of ITC.
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To conclude, it is prudent to state that nearly 10 percent (depending on the mix of booking between economy and non economy class of travel) of the gross spend on hotel booking for business purpose is available for claiming as an ITC and this potential amount adds directly to the bottom line for your organisation by limiting the need for cash outflow at the time of paying the taxes.