Applicability of E-Invoice Framework for GST

All about the GST E-Invoice Framework with applicability from the portal

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What is the E-Invoice Framework under GST?

GST e-invoice is the adoption of the digital invoice for goods and services provided by the business created on the GST portal of the Government. Thought has been paid to the idea of GST e-invoice generation framework for reducing GST evasion.

The GST officers have come to a conclusion by providing companies with a program that makes it mandatory for them to produce ‘e-invoice’ for each sale on the GST portal of government. This scheme will only apply to those whose turnover rate is above the defined threshold i.e. the government will set a threshold for them.

An official said businesses dropping below a certain level will be given a unique number each time an e-invoice is produced. The corporations will compare the amount with the invoices written in the sales report and pay taxes for verification.

  GST for E-invoicing – Introduce the GST e-invoicing of bills under the GST system

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The 39th meeting of the GST Council also agreed to introduce the GST e-invoicing of bills under the GST system and the applicability of QR codes in view of the currently held coronavirus pandemic as from 1 October 2020.

A version of the GST E-Invoicing Trial introduced 

Finally, the government has introduced the GST e-invoicing trial version of the common invoicing system that was discussed earlier in the GST Council meeting. The GST e-invoicing will have several categories in which e-invoice will be filled by the taxpayer according to turnover and other parameters. Every taxpayer is expected to have more than 500 crores of turnover to fill GST e-invoicing via the government portal itself.

IRPs’ position for e-invoicing under GST

After dozens of consultations, E-invoicing was eventually introduced on a voluntary basis for GST registered companies in India from 1 January. The developer of e-invoicing APIs is implemented essentially to submit B2B invoices organized to the GST framework. In fact, real-time transaction invoice monitoring would reduce the risk of last-minute problems due to pendency.

Invoice Registration Portal(IRP) – Apart from other modes, the first Invoice Registration Portal allows for invoice registration on the GST system. API mode

IRP aims to incorporate the e-invoicing program into the company invoicing framework for taxpayers.

The portal also lets the taxpayer get credentials he can access APIs from. Registration for the connection to the API will be complete once the OTP is entered on the checked mobile number and email Id.

RP provides details of the integration of the business systems into their e-invoice systems via APIs

Code extracts and master data are given to learn the logic and concepts properly.

By understanding and checking the API methods, developers can boost the performance of APIs with the help of the portal.

GST E-Invoice Framework Available

Industries would be expected to produce the entire GST e-invoice containing all the value of the sales.

E-Invoicing Under GST Time Period with Requirements for Business Turnover

Sales more than 500 Crores-Beginning October 1st, 2020

Remark:

  1. “The roll-out of e-invoicing would be important for companies with a turnover of more than 500 crs from 1 October onwards.”
  2. “Seek to exclude any class of registered persons capturing dynamic QR code and the date to be extended to 01.10.2020 for the introduction of QR code.”
  3. “Aim to exclude a certain class of registered individuals from issuing e-invoices and extended to 01.10.2020 the date of e-invoicing.”
  4. To the above-mentioned firms, GST e-invoicing is compulsory as of 1 October 2020. Those with turnover up to 100 Crore, voluntary, and trial basis start as per the sources from 1st October 2020.
  5. with effect from 1st October 2020, a supplier whose aggregate turnover exceeds 500 crore rupees in the financial year shall have a Fast Response (QR) code to an unregistered individual (B2C Invoice).
  6. The official also gave an example in which if Rs 1,000 is the minimum fixed invoice then there are high chances that the businesses would be able to divide the bills and they will escape the invoice that will be created due to the threshold.

System to produce e-invoice for under the GST E-invoice generation process

The GST e-invoice generation process will be the same as the e-way bill created on the https:/ewaybill.nic.in/portal, or the GST payments made on the GSTN portal.

The GST e-invoice generation system will replace the e-way bill produced for the movement of goods as a centralized government platform would be used to generate invoices. The e-way bill is currently only produced for those moving goods which cost more than Rs 50,000.

The official also added that there will be no hassle for companies to file the GST returns after the e-tax invoice generation program kicks off, since the data will be auto-filled invoice wise in the return form.

“We’ll have to review global models led by countries like Latin America, South Korea, and Europe,” the official said. We should also look at ways of motivating businesses to follow the process of producing e-invoices.

Along with the officer’s committee, it is entirely the responsibility of the state, central tax officials, and GST Network Chief Executive to implement the e-invoice under the GST program to reduce the burden of producing invoices and enforcement. The committee is given a deadline by next month to finalize the preliminary report.

The main goal of the generation of e-invoices is to test the evasion of GST. After two years of GST implementation, the government is now pursuing anti-evasion initiatives to boost revenue and enforcement.

Only 20 lakhs fall under the composition scheme from the 1.21 Crore listed firms.

The GST e-invoice generation system would minimize the dual effort, as well as the manual involvement in filing and reviewing tax returns, according to a tax expert.

It said, “The tax department could limit the frequency of mandatory departmental audits in case e-invoice procurements are made to encourage businesses to follow the new framework.”

List of Invoice Registration Portal(IRPs) under GST E-invoicing

Following dozens of discussions, e-invoicing was eventually introduced on a voluntary basis for GST registered enterprises in India from 1 January. E-invoicing or electronic invoicing is implemented primarily for the structured recording of B2B invoices to the GST system. In fact, real-time transaction invoice monitoring would reduce the risk of last-minute problems due to pendency.

The target for Invoice Registration Portal(IRPs)

Invoice Registration Portal(IRP) – In addition to other modes, the first Invoice Registration Portal provides for invoice registration on the GST system via API mode.

IRP aims to incorporate the e-invoicing program into the company invoicing framework for taxpayers.

The portal also lets the taxpayer get credentials he can access APIs from. Registration for the connection to the API will be complete once the OTP is entered on the checked mobile number and email Id.

IRP provides descriptions of the integration of the business processes through APIs into their e-invoice processes.

Code extracts and master data are given to learn the logic and concepts properly.

By understanding and checking the API methods, developers can boost the performance of APIs with the help of the portal.

New e-invoicing update under GST framework

In addition to improving the GST structure, the board has now moved to legitimize a new GST e-invoicing or electronic invoicing in a channelized manner for reporting business to business ( B2B) supplies to the GST scheme. The rule will be voluntary in effect as from 1 January 2020.

As any new rule calls for the establishment of a clear norm to accomplish the target in effect. After consultations with trade/industry bodies and representatives of ICAI, the basic standard for e-invoicing is finalized to ensure the absolute applicability of the existing e-invoicing under the GST regime. There was no set norm for e-invoicing up to now.

The e-invoicing function is guided in such a way that e-invoices created by one software are controlled by software which removes the need to re-enter the digits for a fresh entry. Adoption of this specific standard would allow the seller, buyer, bank, or agent or any other person concerned to read by a computer and thereby restrict the unnecessary data, minimizing errors. This is the main aim behind improving the e-invoicing GST structure.

It was in the 37th meeting of the GST Council chaired by Union FM Nirmala Sitharaman, the design of the new e-invoice system was discussed and accepted, and the same is released on the GST portal along with the schemes.

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 ROLL-OUT – COMPLETE TRANSFORMATION OF THE INDIRECT TAXATION LANDSCAPE

GST ROLL-OUT – COMPLETE TRANSFORMATION OF THE INDIRECT TAXATION LANDSCAPE:

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Goods and Services Tax (GST), a historic tax reform, will come into effect from tomorrow i.e.1st July, 2017. GST will completely transform the Indirect Taxation landscape in the country involving both the Central and State levies. In a departure from the normal practice, GST will be administered together by the Centre and States.

To commemorate the historic occasion, a function will be held in the Central Hall of Parliament on the mid-night of 30th June – 1st July, 2017. The occasion will be graced by the Hon’ble President, Hon’ble Vice President,  Hon’ble Prime Minister, Hon’ble Speaker of Lok Sabha and Hon’ble Union Finance Minister among other dignitaries.

GST SO IMPORTANT: –

The biggest tax reform since independence – GST – will pave the way for realization of the goal of One Nation – One Tax – One Market. GST will benefit all the stakeholders namely industry, government and consumer. It will lower the cost of goods and services, give a boost to the economy and make the products and services globally competitive, giving a major boost to ‘Make in India’ initiative. Under the GST regime, exports will be zero-rated in entirety unlike the present system where refund of some of the taxes does not take place due to fragmented nature of indirect taxes between the Centre and the States. GST will make India a common market with common tax rates & procedures and remove economic barriers. GST is largely technology driven and will reduce the human interface to a great extent. GST is expected to improve ease of doing business in India.

In the majority of supplies of goods, the tax incidence approved by the GST Council is much lower than the present combined indirect tax rates levied [on account of central excise duty rates / embedded central excise duty rates / service tax post-clearance embedding, VAT rates or weighted average VAT rates, cascading of VAT over excise duty and tax incidence on account of CST, Octroi, Entry Tax, etc.] by the Centre and State(s).

The journey of GST after the Constitutional Amendment Act, 2016

After the assent of the Hon’ble President on 8th September, 2016, the 101th Constitutional Amendment Act, 2016 came into existence. The GST Council was constituted on 15.9.2016.

Since its formation in September 2016 the GST Council has held 18 meetings. The Finance Ministers of all the States or their representative along with State and Central govt officials have participated in these extensive meetings and formulated the law and procedure to implement this historic tax reform. It was a mammoth task involving 27000+ man hours of intensive work. More than 200 meetings of the officers of the Centre and States took place in different parts of the country to expedite the implementation of GST.

While framing GST Acts and Rules, enhanced ‘Ease of doing business’ for the taxpayers was a key consideration and accordingly the roles and responsibilities of the States and Central govt have been defined. In a short span of time, the GST council has cleared GST laws, GST Rules, Tax rate structure including Compensation Cess, Classification of goods and services into different rate slabs, exemptions, thresholds, structure for tax administration, etc. All the decisions of the Council were taken with consensus. While formulating the Acts and Rules, extensive participatory consultations with trade and industry including other significant stakeholders were undertaken. Feedback was also obtained by posting draft Acts and Rules on the websites and inviting comments from the public.

On 29th March, 2017, the Hon’ble Finance Minister of India tabled four Goods and Services Tax (GST) Bills for consideration and passage in the Lok Sabha namely The Central Goods and Services Tax (CGST) Bill, 2017, The Integrated Goods and Services Tax (IGST) Bill, 2017, The Union Territories Goods and Services Tax (UTGST) Bill, 2017 and the GST (Compensation to States) Bill, 2017. They were passed by the Lok Sabha on 29th March, 2017 and by the Rajya Sabha on 6th April, 2017.

The GST Council has decided the final structure of GST as follows:

  • The threshold limit for exemption from levy of GST is Rs. 20 lakhfor the States except for the Special Category, where it is Rs 10 Lakh.
  • A four slab tax rate structure of 5%12%18%and 28% has been adopted for GST.
  • A cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the GST rate of 28%for payment of compensation to the states.
  • The threshold for availing the Composition scheme is Rs. 75 lakhexcept for special category States where it is Rs. 50 lakh and they are required to file quarterly returns only. Certain categories of manufacturers, service providers (except restaurants) are out of the Composition Scheme.

Other Important Features of GST : Few things to know before GST rollout. GST will be rolled out from July 1, 2017 and just before its implementation the Govt. had issued various notifications on GST:

  • There is a requirement to mention HSN code of items in tax invoice under GST. Now the Govt. has given some relief to small assessees with annual turnover uptoRs 1.5 crores. They are not required to mention HSN code in their tax invoice. Taxpayers having turnover in the range of Rs 1.5-5 crore will be required to mention only two digits of HSN code and taxpayers with turnover more than Rs 5 crore will be required to mention four digits of HSN code.
  • Now the Govt. has given exemption from reverse charge in those cases wherein the value of goods or services does not exceed Rs 5000 and such goods or services are received by registered person from the unregistered person.
  • Earlier Military canteens (‘Canteen Stores Department’)were not required to pay any indirect tax on purchase of goods. Now Military canteens will be required to pay GST at the time of purchase of goods and they would be entitled to refund of 50 percent of inputtax under GST.
  • Now e-commerce operators (like Ola, Uber) are required to pay GST on radio taxi services.
  • Now e-commerce operators (like MMT, Oyo rooms) are required to pay GST on services of hotel accommodation only when such hotels are not registered under GST.
  • Exemption from reverse charge has been given to registered person on purchase of second hand goods from unregistered person subject to the condition that buyer will pay GST on its subsequent sales.
  • Now builders would not be able to claim credit of unutilized input tax on supply of construction services.
  • Earlier UN and Foreign diplomatic missions were not required to pay any indirect taxes. Now they are required to pay GST and they will be entitled to claim a refund of GST subsequently.
  • GST will be be levied at rate of 5% on various goods used for petroleum operations subject to some conditions.
  • Any services provided by Panchayat will not be liable to GST.
  • GST envisages all transactions and processes to be done only through electronic mode, to achieve non-intrusive administration.  This will minimise tax payers physical interaction with the tax officials.
  • GST provides for the facility of auto-populated monthly returns and annual return.
  • It also facilitates the taxpayers by prescribing grant of refund within 60 days, and provisional release of 90% refund to exporters within 7 days. Further facilitation measures include interest payment if refund is not sanctioned in time, and refund to be directly credited to bank accounts.
  • Comprehensive transitional provisions for ensuring smooth transition of existing taxpayers to GST regime, credit for available stocks, etc.
  • Anti-profiteering provisions for protection of consumer rights.
  • Income tax department has said PAN that are not linked to Aadhaar by July 1 will not be cancelled, stepping in to calm the panic caused by a notification issued on wednesday. CBDT
  • The Centre is planning to integrate the direct and indirect taxation systems for all indirect taxpayers by linking the GST number with the permanent account number (PAN) issued by the income tax department, reports Shrimi Choudhary.
  • With the advent of GST today the Centre is now planning to integrate the direct and indirect taxation systems for all indirect taxpayers by linking the GST number with PAN.
  • No GST on Local supplies of second hand goods by unregistered person to registered who charges GST on further sale. Notification 10(CT) (Rate) dated 28.6.2017.
  • Other provisions include system of GST Compliance Rating, etc.

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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)