The Costly Risk of Incorrect GST Ledger Allocation
Under the Indian GST framework, determining whether an invoice attracts Integrated GST (IGST) or Central & State GST (CGST + SGST) depends strictly on the relationship between the Place of Supply (POS) and the supplier's state of registration:
- Intra-State Supply: Supplier State == Buyer State → 50% CGST + 50% SGST.
- Inter-State Supply: Supplier State != Buyer State → 100% IGST.
- SEZ Units & Developers: Treated as inter-state supply (IGST) regardless of geographical location.
When junior accountants manually enter hundreds of vouchers, they frequently post intra-state bills to IGST or vice-versa. During GSTR-3B filing, this creates major table mismatches and triggers automatic ASMT-10 scrutiny notices from the tax department.
Algorithmic State Code Verification
EntryFlow completely eliminates this risk by inspecting the first two digits of the Supplier GSTIN (State Code) against the Buyer GSTIN before generating the Tally XML. If a Maharashtra company (State 27) receives a bill from Gujarat (State 24), EntryFlow automatically routes the tax to the Input IGST ledger. For local vendors, it splits the tax into Input CGST and Input SGST down to the exact paisa.