IMPACTS OF GST E-INVOICING SYSTEM

IMPACTS OF E-INVOICING SYSTEM FOR BUSINESSES UNDER THE GST 

What is an electronic invoice?

E-Invoice is the platform for automatically reporting B2B (Business to Business) invoices to the GST system to make it easier to file monthly returns. Under the current system, invoices created by various accounting software used by different companies cannot be read by different software systems, nor by the GST network, which needs them to be manually translated into the new software again by means of data entry. The e-Invoice Platform is a uniform standard that is being implemented to allow all GST registered invoices to be formatted according to the same standard in the industry and to be automatically applied to all applications and platforms.

The documentation required for e-Invoicing and reporting to the Invoice Registration Portal (IRP):

  • The supplier’s credit notes,
  • Debit notes from retailer,
  • Invoices from suppliers
  • A specific mention should be disclosed under the statute, or any other necessary document, by a specific mention.

Workflow of invoice

  1. Interaction between supplier/seller with IRP & GST/E-Way Bill System

Step 1:

The invoice is created by the billing or accounting software of the Seller. This can be proprietary or third-

party software that is aligned with the Standard of GST e-Invoice requirements or those using the utility programme offered by EXCEL or GSTN. It needs to have the appropriate parameters/fields req. By the laws of the GST Council, if not the optional ones. And most significantly, to submit to the IRP, the seller’s programme must be able to create a JSON of the final invoice. JSON is a text format in which data between servers flows. You can later reconvert this text format to JAVA Script Objects. Only the JSON, not the entire invoice is uploaded.

Step 2:

An optional step that generates the Invoice Reference Number (IRN) (e.g. SHA256). The generation of IRN-Supplier GST Identification Number, Supplier Invoice Number and the financial year includes three parameters.

Step 3:

The seller uploads the JSON of the invoice along with the IRN (if generated) into the IRP. This can be done directly on the IRP or through GSPs-developed third-party applications (GST Suvidha Provider).

Step 4:

To ensure that the same invoice is not repeated in the system, the IRP will validate the hash on the uploaded JSON and check the hash from the Central Register of the Central Registry. The Invoice Data adds a signature and the IRP adds a QR code to the JSON. This will include the GSTN number of the seller and buyer, invoice number and date, number of line products, major product HSN classified by hash, weight, etc. For the e-Invoice, which is unique to each invoice, this hash provided by the IRP will become the final IRN (Invoice Reference Number). The uniqueness is kept by maintaining a record in a central repository of invoice hashes.

Step 5:

In the backend, the uploaded data is shared with the server maintained by the GSTN.

Step 6:

along with the QE Code, a digitally signed JSON with IRN is given back to the seller. Also, the registered invoice is sent to both the buyer and the seller by e-mail.

  1. Interaction between buyer with IRP & GST/E-Way Bill System

 Step 1:

The GST system and the E-Way Bill System share the JSON of the uploaded e-Invoice along with the IRN.

Stage 2:

Update of ANX – 1 and ANX 2 with the purchaser automatically by the GST method to evaluate the liability and the sum of the input tax credit.

Step 3:

Using this information, the E-Way bill system will create Part-A of the E-Way bill to which only the vehicle number should be attached in Part-B of the e-way bill.

Benefits of E-Invoice System for Businesses

There are many benefits of the E-Invoice System for Business are as follows:

  1. Better service is provided to the taxpayer

The process of generating invoices for GST will be self-regulated by E-Invoices. This will significantly speed up the task, cut prices, eliminate human error due to the need for manual data entry at every step.

Elimination of multiple formats by automating the reporting of B2B invoice data (purchase, sale, etc.) in the unified and native format in which it is generated. There is no need for different formats for the generation of GSTR 1 and e-way bills.

Sales and Purchase registered data are automatically generated from this so that the Return (RET 1) is pre-prepared and kept ready for filling. These details may also be used to initiate an e-way bill.

  1. Enhancing the business process

The format would become part of the company’s business process and practise. For companies who are already using accounting software, a single framework format across the industry can help the relationship between businesses and banks, auditors and investors, who can now access the data without first having to translate it to the format they use. In the case of small businesses that do not use computerised accounting software, the GST Council is courtesy of the Government. Provides free ERP and Accounting software to GST registered company to boost the Digital India Initiative.

  1. Save time & Cost control

With e-invoicing, the invoicing process is cut off by several unnecessary steps. Using online e-invoicing tools, both you and your client can save time. You may not have to pay for paper or for postage costs for paperless invoicing. In addition, you save work time by saving time with e-invoicing instead of using templates and emailing PDFs. Concentrate more on other things that add value and can save both time and cost.

  1. Reduction in input tax verification issues:

The input tax is the amount of tax already charged on the raw materials in the product (input) that must be deducted from the output product taxable amount. By-hand estimates in the filing of GST returns often lead to errors in the under or over-claiming of input tax credits. This results in the amount of deduction which an undertaking is entitled to in respect of the tax already paid on the commodity. Inadequate Input Tax Credit claims may lead to a significant loss for the company, as well as extra costs and difficulty fixing mistakes. An automated system can remove human mistakes and ensure that accurate input tax data is always entered.

  1. Reduction in input tax verification issues:

The input tax is the amount of tax already charged on the raw materials in the product (input) that must be deducted from the output product taxable amount. By-hand estimates in the filing of GST returns often lead to errors in the under or over-claiming of input tax credits. This results in the amount of deduction which an undertaking is entitled to in respect of the tax already paid on the commodity. Inadequate Input Tax Credit claims may lead to a significant loss for the company, as well as extra costs and difficulty fixing mistakes. An automated system can remove human mistakes and ensure that accurate input tax data is always entered.

  1. Administrative Efficiency

Before the e-Invoice system, several fake invoices were made, which will now be reviewed as the system is automated.

Timeline and Impact of Business Based on Turnover

The e-Invoice system is scheduled to be carried out on a volunteer basis from January 2020. The mandatory complexity of the programme will be gradually enforced in phases to bring the entire system acclimatised to the new level of software changes in its accounting standards and business practises. Initially, the scheme will be made compulsory for businesses over a specific turnover, on a voluntary basis for everyone else. After that, it will gradually become uniformly mandatory. It is important to keep in mind that small and medium-sized taxpayers (with an annual turnover below Rs 1.5 Crores) can make use of GSTN’s cost-free financial reporting and billing systems.

What Are The Standards Of E-Invoice?

There was a lack of a standard invoicing system on the market and the GST Council, in discussion with the ICAI (Institute of Chartered Accountants of India), the statutory body regulating the practice and profession of chartered accountants in India, introduced a new requirement with this invoicing system. This norm has been chosen as it takes into account the specifications of the statutory tax legislation and is also compliant with global business practices. The standard also enables the generation of multiple data fields that are not required to be reported under the GST regime. Businesses are free not to create and report such data if they choose or do not produce such data.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

Overview of the GST New Rule 86B

Under GST new Rule 86B-: Restriction on Input Tax credit Utilisation in Electronic Credit Ledger

A new rule in CGST rules 2017 has been declared by the Central Government; rule 86B provides restrictions on the use of Input Tax Credit to release output liabilities. This regulation extends from 1 January 2021 onwards and has an overriding effect on other laws. It ensures that the registered individual cannot use the amount available in the credit ledger to pay the output tax liability in excess of 90% of that tax liability. If the amount of the taxable supply exceeds the exempted supply and the zero-rated supply, it exceeds 50 lakh rupees per month.

Prior to rule 86B, ITC utilization permitted

By avoiding the cascading impact of taxes, the ITC plays an important role in the GST. There have been several improvements in the order of use of ITC for various components such as CGST, SGST and IGST. However, to release the output tax liability, the ITC available in the electronic credit ledger can be fully utilized. The use of the ITC balance for payment of its production tax liability has been limited by new rule 86B.

Restrictions imposed according to rule 86B

Rule 86B restricts the use of the open ITC in the electronic credit ledger for the release of the liability for output tax. This rule has a negligible effect on all the other CGST laws.

Applicability

This rule extends to registered persons with a taxable supply value greater than Rs.50 lakh per month. Before filing each return, the limit has to be reviewed every month.

Imposed Restriction

On ITC, applicable registered individuals will not be responsible for more than 99% of the production tax liability. In other words, by using the input tax credit, more than % of the production tax liability cannot be released.

Exceptions to the law

  • In cases where the individuals mentioned below have deposited more than Rs. 1 lakh rupees as an income tax under the Income-tax Act 1961, payment of income tax of more than one lakh rupees will not be applicable.
  1. The individual who is registered
  2. The Owner, Karta or managing partner of a registered individual or of a registered person
  3. Either of the two spouses, full-time directors, members of the associations’ executive committee or the registered persons’ board of trustees, as the case may be.
  • If, in the preceding financial year, registered persons received a refund sum of more than one lakh rupee than the unused ITC input tax credit refund for zero-rated supplies of products or services or Rule 86B, it would not be applicable.
  • Applicability: This rule extends to registered persons with a taxable supply value greater than Rs.50 lakh per month. Before filing each return, the limit has to be reviewed every month.
  • Imposed Restriction: If a registered person is concerned, then a cumulative amount of the total production tax liability by electronic cash register has been discharged up to that month within that financial year. Therefore, the taxpayer must keep track of whether his cumulative discharge of the tax liability for output tax through the electronic cash ledger is more than 1% up to the month of filing of the return when filing the return for each month.

  • If one of the following is the registered individual under examination:
  1. Department of Government
  2. Undertaking in the public sector
  3. Local authority
  4. Statutory Authority

Impact of new 86B regulation

  • After analyzing the restrictions and exemptions set out in Rule 86B above, it is clear that the rule referred to above applies only to large taxpayers.
  • There will be no effect on micro and small enterprises, and it is specifically mentioned under this provision that this rule is intended to regulate the problem of fake invoices in order to use the input tax credit to discharge the liability.
  • Without possessing any financial reputation, it restricts fraudsters from displaying high turnovers.
  • The enforcement burden on taxpayers would be further increased by the limitations imposed by rule 86B.
  • Having complied with the above restrictions and derogations introduced by Rule 86B, it is clear that the above-mentioned rule applies only to large taxpayers. There will be no impact on micro and small enterprises. The motto behind the implementation of this rule is to control the issue of counterfeit invoices for the use of counterfeit input tax credits to discharge the liability. Furthermore, it constrains fraudsters from having high turnover without financial credibility.
  • In addition, CBIC has explained that 1% is to be calculated on the tax liability for the month and the turnover for the month in question.
  • Although this rule has also started to bring real taxpayers under the purview of making it difficult for them, the government’s motto is to avoid false invoicing and ultimately reduce tax evasion.

CBIC has, however, explained that 1% of tax liability is often unveiled for which refund is not permitted. The new law includes numerous exceptions such as exporters, inverted tariff structure suppliers, and taxpayers whose footprint is in the database on income tax.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

Key characteristics for Auto-population of e-invoice details in GSTR-1/2A/2B/4A/6A

Key features on Auto-population of e-invoice details in GSTR-1/2A/2B/4A/6A

Who’s needed to create an E-invoice?

Wide Notification No. 13/2020–Central Tax dated 21 March 2020, amended from time to time, any registered person with a cumulative turnover in exceeding of Rs 500 Cr in any previous FY from 2017 to 18 is needed to create an e-invoice w.e.f. 1 October 2020.

In addition, every registered person with a total turnover in excess of Rs 100 Cr during any previous FY from 2017-18 onwards is required to generate an e-invoice w.e.f. 1 Jan 2021.

E-invoice for Registered Person  Starting Timeline 
The registered person having a Total turnover in excess of Rs 500 Cr. 1st Oct 2020
The registered person having Total turnover in excess of Rs 100 Cr 1st Jan 2021

GST E-Invoices – Advantage

  • It is a reduction in price.
  • GST E-Invoices Simplified GST compliance
  • E-Invoices Improvement in business efficiency
  • E-Invoices abolition of paper
  • Precision
  • Lesser reconciliation errors
  • The effective functioning of capital performance

It is therefore not a soft copy of the GST invoices.

  • The e-invoice is not just about the invoice shown in the soft copy as PDF, etc.
  • The e-invoice does not assume that the invoice is created through the govt portal.

Business Exempted from creating an e-invoice: 

E-invoicing shall not apply to specific categories of registered persons, whether or not their turnover exceeds the threshold as notified in CBIC Notification No. 13/2020-Central Tax:

  • The registered person providing services by way of admission to the exhibition of cinematographic films in multiplex services.
  • An insurer, a banking company or a financial institution, including the NBFC.
  • A registered person providing passenger transport services.
  • Goods and Transport Agency (GTA).
  • SEZ unit (excluded by CBIC Notification No. 61/2020 – Central Tax).

Auto-population of e-invoice details in GSTR-1/2A/2B/4A/6A

Invoices for which e-invoices have been created have also begun to auto-populate particulars of such e-invoice in the below processes:

  1. Return Form GSTR-2A (Auto-populated Inward Supply Details) of the recipient.
  2. Return Form GSTR-2B (Auto-drafted recipient’s ITC statement.
  3. Return Form GSTR-4A (Auto-populated Inward Delivery Details by Composition Dealer) of the recipient.
  4. Return Form GSRT-6A (Auto-populated details of inward supply by Input Service Distributor).

Few notified taxpayers issued invoices after acquiring the Invoice Reference Number (IRN) from the Invoice Registration Portal (IRP) (typically called to as ‘e-invoices’). The specifics of these e-invoices shall be auto-populated in the respective GSTR-1 tables. Here are all the key requirements that must be taken into consideration.

The time lag between E-invoices uploaded to the portal and updated to GSTR-1

  • The data in GSTR-1 is now available on T+3 days, i.e. e-billing data uploaded on 18-12-2020 would’ve been visible in GSTR-1 on 21-12-2020.
  • The consequent reflection of these e-invoice details in GSTR-2A/2B/4A/6A has also started.

Auto-population of E-invoice records to GSTR-1 based on Document Date

  • Auto-population of e-invoice data in GSTR-1 is provided at the time of the document (as reported to IRP). For instance, a document dated December 30, 2020, is reported to IRP on January 3, 2021, with two situations possible;
  • Situation 1: If GSTR-1 for Dec 2020 is not filed, the particulars of that document will be obtainable in the GSTR-1 tables for Dec 2020.
  • Situation 2: If the GSTR-1 for Dec has already been filed by that date, the details of that document will be made accessible in the consolidated excel file that can be downloaded from the GSTR-1 dashboard (with an error description as ‘Return already filed’).

An instance where Invoice details will not be auto-populated in the GSTR-1 Return

Due to the existing validations in GSTR-1, the e-invoices reported as below frequently reported issues are not auto-populated in the GSTR-1 tables but are made publicly available in the consolidated excel file that can be downloaded from the GSTR-1 dashboard (with based on the error description):

  • The document date is after the date of cancellation of the registration by the supplier/recipient;
  • The supplier is found to be of type ISD/NRTP/TCS/TDS;
  • The supplier is found to be a composition taxpayer for that tax period;
  • The document date is before the date of registration of the Supplier/Recipient;
  • Invoices reported as attracting “IGST on intrastate supply” but without reverse charge;

Commonly used data structure issues during E-invoice

Moreover, due to data structure issues, e-invoice details could not be processed (and were therefore not auto-populated) in some cases. These errors may be noted and avoided while reporting the data to the IRP.

  • The serial number of the item shall not be reported as ‘0’
  • White space found in POS (Place of Supply State Code), e.g. ‘8’ The expected values were 08 and 8.

Comprehensive advice on self-population methodology etc. has already been made available on the GSTR-1 dashboard (‘e-invoice advisory’) and has also been e-mailed to the appropriate taxpayers.

Auto-population of information in GSTR-1 is just a facility. The final GSTR-1 filed responsibility of the Supplier

It is reiterated once again that the auto-population of details from e-invoices to GSTR-1 is only an opportunity for taxpayers. After viewing the auto-populated data, the taxpayer needs to verify the propriety and accuracy of the amounts and all other data in each field, in particular from the viewpoint of GSTR-1, and file the very same information in the light of the relevant legal provisions.

The Taxpayer has recommended authenticating the auto-populated documents in the GSTR-1 tables & excel on the below areas:

  • All documents reported to the IRP are in excel.
  • The position of each e-voucher/IRN is correct
  • All the details of the document are correctly stored

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

Overview of Invoice Furnishing Facility (IFF) Under QRMP Scheme

Overview of Invoice Furnishing Facility (IFF) Under the QRMP Scheme

The Invoice Furnishing Facility (IFF) means that small taxpayer to upload their invoices on a monthly basis. On 10.11.2020, the Central Board of Indirect Taxes & Customs (CBIC) notified the Invoice Furnishings Facility via notification number 82/2020-Central Tax. The CBIC introduced QRMP scheme GST to help small taxpayers whose turnover is less than Rs.5 crores.

www.carajput.com; QRMP scheme under GST

www.carajput.com; QRMP scheme under GST

An Invoice Furnishing Facility has been provided to GST Taxpayers under QRMP Scheme system (Quarterly filers of Form GSTR-1 and also of Form GSTR-3B returns), as per Rule-59(2) of the CGST Rules, 2017. GST Taxpayers who have opted for quarterly filing frequency under the scheme can file their details of outward supplies (B2B invoices only) for the first two months of a quarter (M1 and M2 respectively of a Quarter) in IFF.

GST Taxpayers under the QRMP Scheme (Quarterly Fillers of Form GSTR-1 and Form GSTR-3B returns)  were provided with the Invoice Furniture Facility (IFF) as per sub-rule (2) of Rule-59 of the CGST Rules, 2017. Taxpayers who have chose for a quarterly filing intensity under the scheme may submit their outward supply details (B2B invoices only) to the IFF for the first two months of the quarter (M1 and M2 quarters respectively). For instance, B2B invoices for the months of April (M1) and May (M2) may only be submitted in IFF by a taxpayer for the months of April (Apr-June qtr.). For example for Apr-June qtr., B2B invoices only for the months of April (M1) and May (M2) can be filed in Invoice Furnishing Facility by a taxpayer.  The salient features of the Invoice Furnishing Facility are provided as under.

How to will provide documents in the Invoice Furnishings Facility (IFF) under the QRMP Scheme

  • The Invoice Furnishing Facility is a facility like Form GSTR-1, and it allows the filing of details of B2B invoices in the following tables only:  a. Return under 4A, 4B, 4C, 6B, 6C – B2B Invoices
    b. 9B – Credit / Debit Notes (Registered) – CDNR
    c. 9A – Amended B2B Invoice – B2BA
    d. 9C – Amended Credit/ Debit Notes (Registered) – CDNRA
  • The option to upload details in of Invoice Furnishing Facility can be availed till the 13th of the subsequent month. Any invoices remaining to be furnished can be filed using the Invoice Furnishing Facility in the subsequent month Invoice Furnishing Facility or in the quarterly Form GSTR-1. For e.g. for Apr-June qtr., B2B invoices for the month of April (M1) can be filed in IFF by a taxpayer till 13th May. Any of Invoice Furnishing Facility which is not filed till the due date of 13th of the subsequent month will expire.
  • To submit the Invoice Furnishing Facility form for M1 & M2 of the month, log in to GST Portal and navigate to Returns > Services > Returns Dashboard > File Returns and then Select the FY and Return Filing Period (M1/M2 of a quarter) and click on the SEARCH button to file the of Invoice Furnishing Facility forms for M1 or M2 month.

  • IFF is an optional facility provided to taxpayers under the QRMP scheme to pass on Input Tax Credit (ITC) to their recipients for M1 and M2 months of a quarter. However, filing of Form GSTR-1 for M3 month of a quarter is mandatory.
  • GST-related Records submitted/ uploaded in the Invoice Furnishing Facility by the Supplier will reflect in the Form GSTR-2A/2B of the Recipient.
    b. GST Supplier Taxpayers can also submit/upload details in their Invoice Furnishing Facility(IFF), through JSON file, generated using Returns Offline Tool.
    c. Records filed in Invoice Furnishing Facility(IFF) required not to be filed again in Form GSTR-1 of that quarter.
    d. Only the details saved in IFF can be deleted/edited using the RESET button. Once GST Return filed or submitted, then these filed details can’t be deleted after the submitting action.
www.carajput.com; QRMP scheme under GST

www.carajput.com; QRMP scheme under GST

Monthly GST Tax payments under the QRMP scheme:

The taxpayer should first pay the tax in the form of GST PMT-06 by the 25th of the following month, for the first and second months of the quarter. Taxpayers may pay their monthly tax liability in either the Fixed Sum Method (FSM) or the Self-Assessment Method (SAM).

Fixed Sum Method (FSM):  The taxpayer should pay the amount of tax indicated in the pre-filled call in the form of GST PMT-06 for an equivalent amount to 35% of the tax paid in cash.

S No Type of Taxpayer Tax to be paid
1 Who needed to file GSTR-3B quarterly for the last quarter 35% of tax paid in cash in the preceding quarter
2 Who needed to file GSTR-3B monthly during the last quarter 100% of tax paid in cash in the preceding month of the immediately preceding quarter

What is the Interest applicable under the QRMP scheme

The interest will be applicable as follows if the taxpayer opts for Fixed Sum Method (FSM):

S No Situation Rate of Interest to be paid
1 GST Tax liability mentioned in pre-filled form GST PMT-06 is paid by 25th of the upcoming next month Nil
2 GST Tax liability mentioned in pre-filled form GST PMT-06 is not paid by 25th of the upcoming next month Eighteen percent of the tax liability

(from 26th of the following month till the date of payment)

3 Final GST Tax liability for first 2 months is less than or equal to amount paid via pre-filled form GST PMT-06 Nil
4 Final GST Tax liability for first 2 months is higher than  tax amount paid via pre-filled form GST PMT-06, and such excess liability has been paid within quarterly GSTR-3B due date Nil
5 The final GST Tax liability for the first 2 months is higher than the tax amount paid Via pre-filled form GST PMT-06, and such excess liability has not been paid within the quarterly GSTR-3B due date Eighteen percent of the tax liability

(from GSTR-3B due date* till the date of payment)

*22nd or 24th of the month succeeding such quarter based on the state of the taxpayer.

The interest will be applicable as follows if the taxpayer opts for the Self-Assessment Method. The taxpayer has to pay interest @ 18% on the net tax liability which remains unpaid or paid beyond the due date for the first two months of the quarter.

What is a late fee payable under the QRMP scheme

The applicable late fee shall be paid as below if the quarterly GSTR-3B is not submitted within the deadline date, subject to a maximum late fees of INR 5k:

Kind of the Act Applicable late fee for every

day of delay

Applicable late fee for every

day of delay

(if the ‘Nil’

tax liability)

CGST Act Rs.25 Rs.10
SGST Act Rs.25 Rs.10
IGST Act Rs.50 Rs.20
  • Nevertheless, it is explained that there is no late fee for late payment of tax in the first 2 months of the quarter in the form of GST PMT-06.
  • E-Invoicing is India’s largest tax reform next to GST, which will soon cover every business. Stay in front of the curve! Check out our post to get an outline of the e-invoice system.

What are the deadline dates for submitting quarterly filing of GSTR-3B

The deadline dates for submitting quarterly GSTR-3B has been notified as below :

S No GST Registration in States and Union Territories Due Date
1 Karnataka, Goa, Lakshadweep, Daman and Diu, Maharashtra,Telangana, Kerala, Tamil Nadu, Puducherry, Andaman and Nicobar Islands, Chhattisgarh, Madhya Pradesh, Gujarat, Dadra and Nagar Haveli, and Andhra Pradesh 22nd of the month upcoming Next such quarter
2 West Bengal, Jharkhand and Odisha, Uttarakhand, Haryana, Delhi, Rajasthan, Jammu and Kashmir, Ladakh, Himachal Pradesh, Punjab, Chandigarh,Uttar Pradesh, Bihar, Mizoram, Manipur, Tripura, Meghalaya, Sikkim, Arunachal Pradesh, Nagaland, Assam, 24th of the month  upcoming Next  such quarter

Benefits of using such an Invoice Furniture Facility

The potential benefits of the Invoice Furniture Facility are as follows:

  • Relieves the burden of compliance by reducing the volume of invoices to be submitted at the end of the quarter.
  • It allows for a monthly data reconciliation and makes it easier to file returns.
  • Purchasers of goods from small taxpayers can claim ITC on a monthly basis.
  • Small taxpayers can boost their business by making ITC claims faster.

This is an excellent strategy to help both small taxpayers and small taxpayers’ buyers. This facility will indirectly support small taxpayers to improve their businesses by providing faster ITC makes a claim to their buyers. Even so, this will raise the cost of compliance for them. It is, therefore, necessary to make a comparison between the benefits of opting for IFF and the costs involved. It is decent to opt-in for this facility if a small taxpayer raises large amounts of B2B invoices in one quarter compared to B2C invoices.

For User Manual, click on  https://tutorial.gst.gov.in/userguide/returns/index.htm#t=Manual_IFF.htm

For FAQs, click on  https://tutorial.gst.gov.in/userguide/returns/index.htm#t=FAQs_IFF.htm

Our Recommendations: As we already know the limit of availing of the Input tax credit in respect of missed invoices have been reduced from 10% to 5% effective 01.01.2021. Thus, it is imperative for the large companies that have significant vendors under QRMP schemes that they should mandate their vendors to use the Invoice Furnishing Facility scheme. Basis the Invoice Furnishing Facility scheme, the inward supplies up to INR 1 Cr will be reflected in GSTR-2A before filing of GSTR-1 by the vendor. Thus, there will not be any unnecessary blockage of Input Tax Credit and it will also not put too much stress on the working capital of the large corporates.

GST Return compliances calendar- Nov 2020

SALIENT FEATURES OF NEW GST SYSTEM IN INDIA

Key points of 42nd GST council Meeting headed By FM N. Sitharaman

GSTN enable auto-populated in the E-invoice information into GST Return -1

Delayed in payment of GST then Intt to be paid on net GST liability from Sep 1, 2020.

Rajput Jain and Associates 

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

New measures suggested by GSTN to track fake invoice/dealer’s rackets

GSTN taken the measures to track the fake invoice/ dealers/rackets by press realize notified.

New Press Release issued by Ministry of Finance dated December 23, 2020, regarding Measures recommended by GST Council to curb fake dealers/invoice rackets notified. The recommendations of the Law Committee as made aware are central to four main messages, which include:

  1. tightening up the verification process for new registration; – Initiatives suggested by the GST Council to curb counterfeit dealers/invoice rackets made aware
  2. suspension on the basis of data analytics and mismatches: – In-Person Confirmation must be performed for GST Registration, Identification of counterfeit dealers through data analysis, and suspension
  3. Minimum cash payment to deter dummy businesses: -Mandated by law 1 percent GST payment for all those risky dealers and fly-by-night operators who have uncommon large turnover and lack financial legitimacy
  4. Ease of business and precise targeting in the interest of intelligently protected smaller firms.

The main suggestion of the Law Committee of the GST Council is to control the fresh or new registration of applicants without a commercial purpose and to remove existing counterfeit traders from the systems. Measures, therefore, notified to the systemic tightening of new registrations by identifying counterfeit dealers, changes to the registration process, the use of Aadhaar during registration and Aadhaar as the capture of details during registration would have an impact on the threat of mushrooming fake firms and ITC fraud by fly-by-night operators.

Verification of the new registration: pursuant to such initiatives as set out in the notifications, there must now be in-person verification before registration is given to the applicant. In addition, in the event that the applicant opts for Aadhaar authentication, Aadhaar Biometric Authentication will be submitted to one of the Information sharing Centers notified by the Commissioner.

In the event that the applicant has not chosen for Aadhaar authentication, the request processing, the biometric data, and the verification of KYC must be carried out at the Verification Facilities. This verification process may also involve snapping pictures and verifying the applicant’s original documents uploaded to the database.

In impact, GST is going to move towards a better verifying regime for the registration of new business owners, with many of the steps taken in an automated environment. The timeline for the grant of registration to the Aadhaar Authenticated Applicant is now 7 days for the proper examination of the application. In order to overcome the cases of fake invoices, some extreme medical confirmation may be held out with the approval of an officer authorized by the Commissioner in a few risky cases where a person has successfully undergone Aadhaar authentication. The timeframe for granting registration in such cases would now be 30 days.

Cancelation and suspension: In the new regime notified suspension and cancellation would be based on the data analytics and mismatches. Registration shall also be liable for cancellation if the input tax credit is used in contravention of the law of the CGST Act or if the outward supply details in FORM GSTR-1 exceed the outward supply declared in FORM GSTR-3B for one or more tax periods. Some rather cases would result in ITC being passed or used without payment of tax and would therefore be liable for cancellation of registration. These taxpayers would remain in suspension during the cancellation hearings.

Minimum Cash Payment: In another considerable change in rules for Disposal of Dummy Businesses, the existing eligibility limit for the use of 10 percent input tax credit (ITC) by a registered person in respect of invoices where the details have not been provided by his suppliers would be reduced to 5 percent w.e.f. 1 January 2021, as a framework for the implementation of the QRMP scheme with the facility. It could make sure that large taxpayers carry on making purchases from small taxpayers.

To reduce false ITC use and transfer of such credit by unscrupulous persons who usually pay no tax in cash, in specific in those risky cases where GST turnover does not match tax returns where the value of taxable supply other than exempt supply and zero-rated supply exceeds Rs. 50 lakh, such registration person will not be able to use the amount of ITC available in one month. At least 1% of the liability would have to be discharged in cash. This change will come into force on 1 January 2021.

Ease of Doing Business & Precise Targeting: Even so, there are a few exceptions to the above requirement to limit the use of ITC to ensure Ease of Doing Business. Appropriately, where a taxpayer has paid more than Rs. 1 lakh as income tax each of the last two financial years, or has received a refund of unused ITC on account of a zero-rated supply or inverted duty structure of more than Rs 1 lakh in the previous fiscal year, or has released its liability for output tax by electronic cash legs for an amount exceeding 1% of the total amount. Such taxpayers may use more than 99 percent of ITC to discharge their tax liability.  Moreover, the Govt Dept, the PSU, local & other statutory bodies, are exempted from theses limit on Input Tax credit utilization.

The Ease of Doing Business for Real Taxpaying citizens, Corporate Entities and Merchants, and Effective Trying to target in the Benefit of Small And medium enterprises would therefore not have an influence, as the Law Committee recommended initiatives for the precise identification of possibly riskier taxpayers based on very well set limits in the automated environment. In the same spirit, moreover, to control the false invoice threat, now that a registered person has not filed Form GSTR-3B for the previous two months, his Form GSTR-1 will not be created. A comparable limitation has been positioned on QRMP taxpayers if the form GSTR-3B is not submitted for the prior one tax period of three months.

Jointly, such measures are able to monitor dummy registrations and fake ITC billing to move the GST procedure towards that cleaner and more robust regime.

A recent case found on Fake invoices:

CA Arrested in fraudulent GST bills & bogus ITC of 25 cr

In the active campaign against fraudulent and fake invoices and the subsequent use of unjustifiable Input tax credit, officers of the CGST Commissariat of Delhi (East) have identified the problem of counterfeit bills to the tune of INR 79.5 Cr (approx).

Union ass being controlled by Sh. Nitin Jain, Chartered account by floating three businesses, i.e. M/s Anshika Metals, M/s NJ Trading Co. and M/s A..1 Enterprise, using the identification of their relatives, with the intention of transferring the impermissible Input Tax Credit

Sh. Nitin Jain, the Chartered account has transferred the bogus ITC to approximately rs. 14.30 crones through all these firms. All the e-way bills produced for the transport of the goods were also discovered to be fraudulent.  Sh. Nitin Jain, Chartered account, who intellect absconding since 16.12.2020, eventually appears before the Investigative Officers on 13.01.2021 and admitted in his declaration that three fictional companies had circulated using the name of his father Sh. Naresh Chand Jain and his wife Mrs. Diksha Jain to use and move the bogus Input Tax Credit.

Considerably, in 2 previous cases of bogus billing found by the East Delhi Commissariat in which Sh. You remember, Sachin Mittal and Sh. Dinesh Jain was found to be engaged in the case of fraudulent invoices and to have transferred the bogus Input Tax Credit of Rs. 12 crores and Rs. 13.98crores, respectively, via their companies, had also disclosed the name of Sh in their statements. Nitin Jain, guy. The chartered Account claimed that, on a commission basis, it had arranged and supplied them with bogus invoices for invoices from various firms. Sh. Nitin Jain has deliberately committed offenses under Section 132(1)(b) and 132(1)(c) of the CGST Act, 2017 as amended under Section-127 of the Finance Act 2020, which are identifiable and non-bailable offenses under Section 132(5) and punishable under Section I of subsection (1) of Section 132 of the Law on Offers.

Sh. Nibs Jain, Chartered Accountant was arrested u/s 69(1) of the COST Act 2017 & filed before the Duty Magistrate, where he was held in custody for 14 days until 27.01.2021. Further investigation is ongoing in this case. The consolidated sum of identification under fraudulent invoices for the current one is Rs. 3684.46, and the total number of arrests for the region is Rs. Eighteen.

Even more inquiries on the subject are in the process

GST Return compliances calendar- Nov 2020

SALIENT FEATURES OF NEW GST SYSTEM IN INDIA

Key points of 42nd GST council Meeting headed By FM N. Sitharaman

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

GST Registration Cancellation & Revocation under GST-How & Why Its Need?

GST Registration Cancellation under GST- Why & How?

Cancellation of GST registration describes that the taxpayer will no longer be a GST registered person; they will no longer have to pay or collect the tax. Taxpayers who have previously registered under the GST Act may apply to cancel the registration of a GST at a certain time they feel compelled to close their business or in any other scenario. After the registration has been cancelled, the taxpayer is no longer required to pay tax or to collect tax from ordinary people.

Consequences of GST registration cancellation: Registration under the GST is compulsory for certain companies. If GST registration is cancelled and business continues, it will result in a GST offence and big penalties will implement. Following Implications of cancellations of GST registration

  • The taxpayer is unable to collect and could no longer pay GST;
  • There would be no need for the taxpayer to file any GST return.
  • Registration under the GST is mandatory for individual businesses. If GST registration is decided to cancel and business continues, it will result in a GST violation and heavy penance.

Registration granted under the GST shall be cancelled for specified reasons. Cancellations may be made either by the dept or by the registered person or by personal representatives in the event of the death of the registered person. In the event of the cancellation of the registration by the department, provision has been made for the cancellation of the registration.

Cancellation of registration of the GST may be made by:

  1. Required by the taxpayer
  • Migrated taxpayers: Any person who has been registered under the earlier indirect tax law like services tax etc had to migrate to the GST on a mandatory basis. For example, the VAT threshold for most states was 5 lakhs, when it is actually 20 lakhs for GST. However, make absolutely sure that you don’t seem to make inter-state supplies, as registration is mandatory for inter-state suppliers except for service providers.  The request for cancellation, in the case of voluntary GST registrations, could be made without delay only after one year from the date of registration, e.g. Rs. 40 lakh or Rs. 10 lakh in certain states/union territories. • Such taxpayers had to make an application electronic means to the GST portal in FORM GST REG-29.
  • Other than those of the migrated taxpayers
  • The business has ceased.
  • The business has been considered close, amalgamated, demolished or disposed of.
  • The transferee must be registered; the transferor will cancel the registration if it ceases to exist.
  • An instance of a change in the business example of the constitution; a private limited company has changed to a public limited company.
  1. By the appropriate GST Taxation officer: The tax officer may cancel the registration if:
  • A taxpayer just hasn’t filed GSTR-1 because GSTR-3B has not been filed for more than 2 regular months.
  • They are in violation of anti-profit making provisions.
  • No business is carried out by the taxpayer from the declared place of business.
  • Taxpayer issues invoices or invoices without the delivery of goods or services.
  • Using ITC from electronic credit ledger to discharge more than 99 per cent of the tax liability for specified taxpayers with a total supply tax of a considerable amount of Rs. 50 lakh per month, with some deviations.
  1. By the Legal heirs to the taxpayer
  • Prior to cancelling the registration, the officer would notify the person whose GST registration is subject to cancellation.
  • Attested notification within seven working days from the date of service of such information as to why the GST registration is cancelled.
  • The registered person may, within in the time stipulated, response to the attested notice

Forms for GST Registration cancellation

All of those who cannot follow abovementioned procedure must submit an application for the cancellation to FORM GST REG 16. The legal heirs of the deceased taxpayer shall repeat the same process as the following.

  • Application for cancellation must be made in FORM GST REG 16.
  • The following information should be included in the FORM GST REG 16—
    • Details of the inputs, semi-finished, finished goods held in stock on the date of cancellation of registration
    • Liability on this
    • Payment details.
  • An order for cancellation under FORM GST REG-19 must be issued by the appropriate officer within thirty days from the date of application. The cancellation shall take effect from the date calculated by the officer and shall be notified to the taxable person.

Revocation for GST cancellation

What is the Revocation for GST cancellation?

Revocation of the cancellation of GST Registration explained that the application form has been fully rectification done and that the GST Registration is still valid. This case can be applied only in case the GST Tax officer has forced to cancel the registration of a taxable person on his/her movement. Such a GST taxable person may again apply to the GST cancellation officer within 30 days from the date of the cancellation order.

When is the cancellation revocation applicable?

This applies only if, on its own motion, the tax officer has cancelled the registration of a taxable person. Such taxable person may apply to the cancellation officer within 30 days from the date of the cancellation order.

Note: Application for revocation cannot be filed if the registration has been cancelled due to failed to submit returns. Such returns must be made in the first place along with the payment of all amounts of tax, interest and penalty due. Such returns must be made in the first place and all amounts of tax, interest and penalty due must be paid.

Procedure for Implement Revocation for GST cancellation

  • A registered person may submit a request for cancellation in FORM GST REG-21 if his registration has been cancelled by the appropriate officer.
  • It must be submitted to the Common Portal within thirty days from the date of the provider of the cancellation order.
  • If the proper officer is satisfied, he may cancel the registration by order in FORM GST REG-22 within 30 days from the date of receipt of the application. Revocation of the cancellation of the registration must be recorded in writing.
  • The proper officer may, by order in FORM GST REG-05, reject the request for revocation and may convey the same with the applicant.
  • Before rejecting the application, the competent authority must send a statement of cause in FORM GST REG–23 to show the applicant why the application must not be refused. The candidate must reply to FORM GST REG-24 within 7 working days of receipt of the notification service.
  • The judgement of the appropriate officer shall be taken within thirty days from the date of receipt of the explanation from the application form in FORM GST REG-24.

Finally after receipt of the request for GST registration Revocation, in the form GST REG-21, if the Proper officer is completely comfortable with the reason/revocation of the GST Registration, the cancellation of the registration in the form FORM GST REG-22 shall be revoked.

After the receipt of Revocation Request, in Form GST REG-21, if the officer is satisfied by the reason/ grounds for revocation of GST Registration, then he shall revoke the cancellation of registration in FORM GST REG-22

Be Caution: If you are a GST registered person who has a good deal and a stock in hand and by any error (due to a lack of consciousness of GST law) your GST number is cancelled, it is recommended that before proceeding with the submission of any reply to the GST Officer, please ensure that you have sufficient knowledge of GST law or consult with the GST Expert even though, nowadays, the GST Department is quite serious in GST compliance and compliance, By placing a wrong reply may cancel your GST registration that can be harsh to the GST Registered person according to its Stock holding by the Business owner & GST tax liability on his stock in hand.

At Rajput Jain and Associates, we help our clients in dealing with various of GST matters (GST registration, GST tax return, refund claims & GST audits) by supplying them with sufficient guidance and support from our end. If you have any questions or would like to understand more about cancelling your GST registration, please feel free to contact us.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

Key Highlights of Amendments introduced- CGST (14th Amendment) Rules 2020

Key Highlights of Amendments introduced- CGST (14th Amendment) Rules 2020

The time limit for system-based GST Registration increased

  1. The time for system-based registration has been extended from 3 days to 7 days. That implies that, as given earlier from the date of filing of the application for registration, the department is now expected to review and approve the registration within 7 days against 3 days. If the applicant does not make an adhaar authentication or if the department finds it necessary to carry out physical verification, the time limit for granting the registration shall be 30 days instead of seven days.
  • Application for registration of GST (Rule 9): Application to be accompanied by Aadhaar Biometric Authentication and Photography/KYC of the applicant.
  • Deadline for grant of GST Registration (Rule) : The period to grant Registration has been increased from three days to seven days.

More Powers to GST department in cancellation of GSTIN- Cancelation of GST Registration (Rule 21)

  1. Now the GST officer can proceed for cancellation of GSTIN where a taxpayer avails ITC exceeding than that permissible in Section 16(e) has been inserted in Rule 21 of CGST Rules 2017. More criteria added for cancellation of GST Registration. The ten percent limit on ITC claims for invoices or debit notes, the details of which were not uploaded by the suppliers, was reduced to 5%.
  2. If the liability declared in GSTR 3B is less than that declared in GSTR 1 in a given month, the department may now proceed with the cancellation of GSTIN. There may be some practical problems in enforcing such a clause, as there are a range of corrections made in GSTR 3B which may result in lower tax liability compared to GSTR 1. The newly added clause (f) relates to the details of the outward supply of which we understand that both the taxable value and the tax should be in synchronisation between GSTR 1 and GSTR 3B.
  3. No right to be heard shall be granted to a taxpayer for suspension of GSTIN if the proper officer (PO) has reason to believe that the person’s registration will be canceled. The words ‘possibility to be heard’ have been omitted from Rule 21A, clause 2.
  4. Since there is a substantial discrepancy/anomaly between the details of the outward supply between GSTR 3B and GSTR1 or the inward supply (ITC) between GSTR 3B and GSTR 2B suggesting contravention of the Act, the department shall now inform FORM GST REG 31 of the reasons why GSTIN should not be canceled. Taxpayers shall be expected to send their reply within 30 days of receiving such notification.
  5. Where a GSTIN is revoked, the taxpayer may not make a refund to us 54 of the CGST Act 2017. This means that the first GSTIN suspension process must be finished before the refund is applied.

Restriction of 10 % on a claim of claiming ITC reduced as per Rule 36(4) & Rule 37

  1. The input tax credit claims for invoices not issued by the corresponding suppliers have now been reduced to 5 percent of the credit available in GSTR 2B. The above cap was 10% of the available input tax credit. This will mean that the ITC claim of a taxpayer is now limited to 105 % of the credit expressed in its GSTR 2B. Any claim that exceeds the prescribed limit shall result in a breach of the CGST Act which is read in compliance with the rules which may result in the suspension of GSTIN as mentioned above. That provision shall enter into force on 1 Jan 2021.

GSTR 1 to be blocked in case of non-filing of GSTR 3B

  1. If a taxpayer failed to file GSTR 3B for 2 months thereafter, his GSTR 1 shall now be barred. Previous non-filing of GSTR 3B used to result in the blocking of the E-way Bill facility, however from now on it will also result in the blocking of GSTR 1 by the taxpayer. Similar vein, in the case of quarterly return filers, taxpayers who have not filed GSTR 3B for the preceding quarter are not entitled to file GSTR 1 for the following quarter.
  2. A taxpayer whose use of ITC as provided for in Rule 86B is also prohibited from filing GSTR 1 where GSTR 3b has not been filed for the preceding tax period.

New Restriction on Utilization of ITC – Rule 86B

  1. New Rule 86B shall apply from 1 Jan 2021 in which more than 99 % of the tax liability for ITC has been decreased if the amount of taxable supplies other than exempt supplies & zero-rating supplies exceeds INR 50 lakhs per month. While few exceptions to this rule have been made, they are as continues to follow:
  • Where the taxpayer has paid income tax in excess of INR 1,00,000/- in the last two Financial Years.
  • where if the taxpayer has earned a refund in excess of INR 1,00,000/- u/s 54 of the CGST Act 2017.
  • Where the taxpayer has used electronic cash leger to pay liability for outward materials, which amounts to a cumulative 1% of the overall liability up to that month.
  • where an individual is a local authority or governmental body, a PSU, or a statutory authority.

Narrowing the validity of E-way bill

  1. Previously one day a distance of up to 100 km was allowed under the e-way bill. The same has now been raised to 200 km. This means that only one day of validity is given to cover a distance of up to 200 km which was 100 km previously.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

E-Invoice Mechanism under the GST

What is the E-Invoice Mechanism under the GST?

www.carajput.com; E-INVOICE UNDER GST

www.carajput.com; E-INVOICE UNDER GST

‘Electronic Invoicing’ or ‘E-invoicing’ is a mechanism in which GSTN automatically authenticates B2B invoices for further use on the Common Goods & Service Tax portal.  From this portal, all invoice details will be transmitted in real-time to both the Goods & Service Tax portal and the e-way bill portal.

GSTN officially sources said that, when an e-invoice is generated, a specific number will be issued to businesses that will fall below a specified unique number. These numbers should be matched by businesses with the invoices written in the GST Return and GST Taxes paid for authentication/ verification.

Applicability of E-Invoice System under Goods & Service Tax (GST) 

It will be compulsory for businesses to create an entire E-Invoicing under Goods & Service Tax, containing all the sales revenue. The assessee whose Sales is excess INR 500 Crore in the previous Financial Year from 2019-20, this assesse is needed to upload the E-Invoice details on the Government of India Invoice Registration Portal (IRP) with effect from 01st Oct 2020.

Advantages of E-Invoice Goods & Service Tax (GST)

  • Price Drop
  • Removal of paperwork
  • Increased in company performance and efficiency
  • The successful functioning of the capital performance
  • minor reconciliation errors
  • Simplified adherence with  Goods & Service Tax compliance
  • Accuracy

Therefore, it is not a soft copy of the Goods & Service Tax (GST) invoices

  • E-invoice is not all about invoices like PDF etc. shown in the soft copy.
  • Indeed the e-invoice does not imply that the invoice is created through the government portal.

E-Invoicing Under GST Trial Version Released

Finally, the Government of India introduced the GST e-invoicing trial version of the common invoicing network, which was discussed earlier at the GST Council meeting. The GST e-invoicing would have several categories under which an e-invoice will be filled by the taxpayer on the basis of turnover and other requirements. For filing GST e-invoice vis. Govt. portal, it is compulsory that taxpayers must have a turnover of more than 500 crores.

Mandatory GST E-invoice GST for Businesses, who’s turnover > 100 Crores

The CBIC indicated that E-invoicing under GST is relevant for specified companies, especially those whose turnover of Excessed INR 100 Crores. As of 1 January 2021. Early this limit was the on Sales Excessed INR 500 Crores. (Notification No. 13/2020 – Central Tax, dated 21 March 2020)

In that notification, with effect from January 01, 2021, the words ‘five hundred crore ropes’ shall be replaced by the words ‘one hundred crore rupees’

The changes would impact medium-sized businesses within the e-invoicing circle. It is expected that B2B transactions will be open to the assessee as of 1 April 2021.

“The inclusion of dealers with turnover B/W INR 100-500 Cr within the E-invoicing gamut is another step towards the formalization of the Indian market. There may be some initial slowdowns in implementation, but in the long run, they are likely to result in more accountability, better tax administration, and automated tax compliance and filings,”

The GST electronic invoicing system for a business to business transactions from October 1 is mandatory for companies whose turnover is more than Rs 500 Cores.

New Update for E-invoicing Under GST Mechanism

In addition to the reform of the GST Mechanism, The GST Council has currently made a move to promote a new GST E-invoicing or electronic invoicing in a channelized manner to disclose B2B supplies to the GST Mechanism. This provision will be made on a voluntary basis with effect from January 01, 2020. The provision will be made on a voluntary basis in effect from January 01, 2020. Like any new provision calls for a specific standard to be developed in order to accomplish the purpose in effect. The basic standard for e-invoicing is finalized after consultations with trade/industry bodies and ICAI representatives to ensure the absolute applicability of the current e-invoicing under the GST scheme. Until now, No standard Fixed format for E-invoicing has been fixed.

The functioning of the e-invoicing is oriented in such a way that the e-invoices created by one software are controlled by another software, removing the need to re-enter the digits for a new entry. The adoption of this specific standard will allow the seller, customer, bank or agent, or any other person concerned, to read by the computer and restrict unnecessary data, thereby minimizing errors. This is the main purpose behind improving the framework of the GST e-invoicing.

At the 37th GST Council meeting chaired by Union Finance Minister Smt. N Sitharaman, the standard of the new e-invoice system was discussed and approved, and the same scheme is published on the GST portal.

Procedure generating of E-invoice under the GST

www.carajput.com; E-INVOICE UNDER GST

www.carajput.com; E-INVOICE UNDER GST

It is the duty of the taxpayer or companies to produce the invoice / s, and then send them for approval to the Invoice Registration Portal (IRP). The portal will return the invoice to the manufacturer, along with a unique reference number, digital signature, and a QR code, after successful verification. The e-invoice will also be exchanged with the corresponding buyer on the provided e-mail ID

Stage 1: Generation of an Invoice

The seller/supplier will use his / her accounting or billing software to create an invoice in the prescribed format (e-invoice schema). It must have the required details.

For each B2B invoice, the supplier’s accounting program must produce a JSON. The JSON file is imported into the IRP.

Stage 2: Generation of an IRN

The next step will be to use a standard hash-generation algorithm to create a unique invoice reference number (IRN) by the vendor.

Stage 3: Uploading the Invoice

Now the seller will upload JSON to the IRP, either directly or via 3rd party software, for each of the invoices, along with Invoice Registration Portal.

Stage 4: Sign and Authenticate

If it’s not already uploaded by the supplier, Invoice Registration Portal will validate the hash / IRN attached to JSON, or generate an Invoice Registration Portal.

Then, it verifies the file against GST’s central registry.

After complete verification, JSON will have its signature attached to the invoice and a QR code.

The earlier created hack will become the new E-invoice IRN. The e-invoice will be the unique identifier for the whole financial year.

Stage 5: Data-sharing

The data uploaded will be shared with both the E-way bill & GST program.

Stage 6: Download E-invoice

www.carajput.com; E-INVOICE UNDER GST

www.carajput.com; E-INVOICE UNDER GST

The GST Portal will forward the digitally signed JSON with IRN and QR code back to the seller. The E-invoice is also sent to the customer on their registered email I d.

You may also read the related Link:

GSTN: Available Tax Payer Features in the GST Portal

GSTN enable details to be auto-populated in E-invoice GSTR-1

E-invoice details are auto-populated in the respective GSTR-1

How to charge GST on expenses in the invoice?

Applicability of GST e-invoice Framework for GST

Details of E-invoice under GST

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

November 2020 Month GST Collection Reaches Rs 1 Lakh Crore

November 2020 Month GST Collection Reaches Rs 1 Lakh Crore

www.carajput.com; GST Collection

www.carajput.com; GST Collection

GST Collection: The total Goods & Service Tax revenue received in the month of November 2020 is Rs 1,04,963 crore, Out of which Central Goods & Service Tax is Rs 19,189 crore, and State Goods & Service Tax is Rs 25,540 crore, Integrated Goods and Service Tax is Rs 51,992 crore (which include Rs 22,078 crore received for import of goods) and Cess is Rs 8,242 crore (including Rs 809 crore collected on import of goods). The aggregate number of GSTR-3B returns filed during the month of November to 30 November 2020 is 82 lakhs.

The Government has agreed to Rs 22,293 crore to Central Goods & Service Tax and Rs 16,286 crore to State Goods & Service Tax to Integrated Goods and Service Tax as a routine settlement. The combined revenue obtained by the central government and the state governments after routine settlement in the month of November 2020 amounts to Rs 41,482 crore for CGST and Rs 41,826 crore for State Goods & Service Tax.

In accordance with the recent trend of recovery in the latest Goods & Service Tax sales, revenue for the month of November 2020 is 1.4% higher than GST revenue for the same month last year. During the period, revenues from imports of goods were 4.9 percent higher and revenues from internal transactions (including imports of services) are 0.5 percent higher than revenues from these sources in the same month last year.

The table below shows patterns in monthly gross GST Revenue for the current year. The table displays the state-wise figure GST obtained by each State during the month of November 2020 related to November 2019.

You may also like to read the related Link;

Points to be considered for GST-PMT-09 under the GST regime

Threshold limit and Eligibility criteria of GST return turnover

Process of Flow of Return filed under GST

Regards

Rajput Jain & Associates

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

Blocking/Unblocking the E-Way Bill creation system if fails to file GSTR-3B: GSTN

Blocking the E-Way Bill creation system if the taxpayer fails to file GSTR-3B returns:

www.carajput.com; E-way bill

www.carajput.com; E-way bill

  • The E-Way Bill (EWB) creation system of the taxpayer is entitled to be limited in the situation that the taxpayer fails to file FORM GSTR-3B returns/FORM GST CMP-08 for tax periods of 2 or more. the Taxpayers’ E-Way Bill generation facility will be canceled. Above said blocking will be effective 1. Dec 2020 onwards.
  • The blocking will take place on a periodic basis from 1 December 2020 onwards regardless of the Aggregate Annual Turnover (AATO) of taxpayers.
  • The E-Way Bill (EWB) generation facility system will confirm the position of the returns submitted in the form GSTR-3B or the statements filed in the form GST CMP-08 for the class of taxpayers to which it applies and limits the generation of the E-Way Bill (EWB) in the event of (w.e.f 1 December 2020) and the restriction put on it.
    1. Form GSTR 3B: non-filing of two or more returns for the months up to October 2020;
    2. Form GST CMP-08: non-filing of 02 or more quarterly statements by July to September 2020
www.carajput.com; E-way bill

www.carajput.com; E-way bill

  • To entitle the continuous E-Way Bill creation system on EWB Portal, you are therefore advised to file your pending GSTR 3B returns/GST CMP-08 statements immediately.
  • Blocking the facility of issuing of E-Way Bill (EWB) for taxpayers with Total Annual Turnover over Rs 5 Cr., after October 15, 2020.”
  • The validity of the e-way bill has been postponed by the CBIC till 30 November, while the deadline for the special agreements under customs, central excise, and service tax legislation has been extended to the same date.
  • “The E-Way Bill of Validity issued on or before March 24, 2020, expiring between March 20, 2020, and April 15, 2020, has been extended to May 31, 2020.”
  • For information on blocking and unblocking the EWB, follow the button below.

https://docs.ewaybillgst.gov.in/Documents/faq_block_latest.pdf  or

https://docs.ewaybillgst.gov.in/Documents/Unblockver1.pdf or

https://tutorial.gst.gov.in/userguide/returns/index.htm#t=FAQs_unblockingewaybill.htm

Note: When you’re not enrolled on the EWB portal, please just ignore this change.

How do I unblock the e-way bill?

A. GSTR-3B Filing

Until the default taxpayer files are GSTR-3B for the default duration, the GSTIN will be unblocked automatically the very next day.

Taxpayers can also make an e-way bill shortly after submitting his return by following the following steps:

www.carajput.com; E-way bill genration

www.carajput.com; E-way bill genration

  1. Visit the EWB portal then choose the ‘Search Update Block Status’ selection.
  2. Access the GSTIN, CAPTCHA Code, then press the Go’ button.
  3. Tap on ‘Check Unblock Status from GST Popular Portal;’ this will represent the status of the recent file.
  4. If this doesn’t work, a taxpayer will hit the GST Support Desk and get the situation resolved.

B. Unblocking the Compliance Officer

Even just a compliance officer can unblock GSTIN online on the basis of the taxpayer’s manual representation (this facility is not accessible for now).

C. Unblocking by online application in the EWB-05

EWB-05 may be filed by presenting an appropriate reason for non-filing of GSTR-3B. Such an application cannot be refused without providing an appropriate chance to be heard (so for now, this online application service is not effective).

The actual effect on taxpayers

The main problem of the taxpayer with this new structure is that he/she cannot deliver/receive items without an e-way bill. If the goods are transported without an e-way bill, the authority can levy a fine equal to the amount of the tax due. Such goods may also be seized or kept in detention, and the goods would only be released on payment of the value of the tax also with a penalty.

If the products are not distributed on time the company can come to a standstill. Therefore in order to prevent such a scenario, the taxpayer must be compliant and file returns on time. This would lead to an overall increase in GST sales and as a result, the whole system will become more compliant.

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Rajput Jain & Associates 

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)