Hi

1. Client is using GST reference number sequence as a primary series to file GSTR instead of D365 invoice Id. There is a client requirement that GST refernce number sequence should auto picked in GSTR2 report which is refered for reporting to GST department with all RCM transaction which is a legal requirement. Currently, we are getting this as required and expected but with a RCM posting where GST recoverable….Dr and Interim payable…..Cr. And just to note, above GST reference number sequence is captured as configured under Source = Accounts Payable and Reference = GST Invoice. 

2.But there is one more solution for RCM posting (suggested by MS) where GST Recoverable….Dr and Tax Payable (Reverse Charge) – Ledger account ……….Cr. so if we opt this solution of RCM posting then the expected GS reference number series on GSTR2 report is not getting caputured instead it is picking D365 invoice Id which has been manually entered in invoices field while creating RCM transaction.

Just to highlight about this approach of RCM posting, this solution is more viable as per CGST act as RCM liability is paid in cash and there is no tax payable created. So in this case Tax Payable (Reverse Charge) is a ledger posting type not India GST and this will be settled/paid by posting a General journal using cash ledger (Tax Payable (Reverse Charge)....Dr and Cash....Cr) which is aligned with the CGST act (Cash payment of RCM liability).

Note: Both the solution has its own pros and cons. The first one will be reflected in GSTR2 report with "Is reverse charge applicable" as Y if supplier is unregistered BUT in second approach it will be reflected in GSTR2 report with "Is reverse charge applicable" as Blank. And many more we just need to test and find it.

Thanks!

Warm Regards,

Deepak Singh