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e-invoicing under GST may be made mandatory in future, says GSTN CEO Prakash Kumar

e-invoicing under GST may be made mandatory in future, says GSTN CEO Prakash Kumar

GSTN CEO Prakash Kumar on Thursday said that e-invoicing under GST will remain on a voluntary basis initially, however, it could be made mandatory in future if the council feels the need of doing so.

“The council has given us the date of January 1st to deploy it on voluntary basis; the way we have done for e-way bill — it will be on a voluntary basis for some time and after that, it will be made mandatory whenever the council thinks of,” said Kumar in an interview with CNBC-TV18.

The goods and services tax (GST) collection has remained subdued in October as well. GST mop-up, according to sources, stands at Rs 93,000 crore, significantly lower than Rs 1 lakh crore in October 2018.

“The applications which were filed were around 3.5 crore and 1,500 have already been issued; the sanctions and refund have already taken place,” said Kumar.

“If there is deficiency, it is returned back and the taxpayer is supposed to add those papers and that is treated as a fresh application,” added Kumar.

On simplification front, Kumar said, “The most important one is the new return which will be launched on April 1. In fact, we have already launched the offline tool which is available also in the online version which people have already started using.”

“The advantage is that once they use it, they will be familiar with the new system which is different from what we have today,” added Kumar.

He further said that automation will help bring the burden down.

Source: CNBCTV 18

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E-invoicing, a game-changer for GST

E-invoicing, a game-changer for GST

The GST Council, on September 29, 2019, has approved the introduction of ‘E-invoicing’ or ‘electronic invoicing’ for business to business (B2B) transactions from January 1, 2020. Once implemented, it can help arrest tax evasion as it enables pre-populating of GST returns with the e-invoice details. Return filing will also become simpler with reconciliation becoming easier.

Recently, a concept note explaining what e-invoice is and how it operates was released and made available on the GSTN website.

The document allayed the concerns of the tax payers and reiterated that there is no requirement to generate the e-invoice on a government’s tax portal. The taxpayer can continue to use his accounting system such as ERP, Tally and excel based tools for creating the invoice. The only requirement is that the supplier’s software should be able to generate the invoice in a specified template in JSON format.

E-invoicing, which is touted as more of a business reform than a tax reform will initially be made applicable for certain taxpayers having turnover or invoice value above the specified limits or on voluntary basis. This will subsequently be enabled for all tax payers in a phased manner.

The e-invoice schema and template, as approved by the GST Council, are available in the GSTN website at https://www.gstn.org/e-invoice/

Check on tax evasion

E-invoicing, if well implemented, reduces the compliance requirements to a great extent for it propels pre-populating of various returns such as GSTR 1 and e-way bills.

In addition, it standardises the invoice format ensuring interoperability of the data, eliminates fake invoices, provides complete trail of B2B transactions and enables system level matching of ITC and output tax.

As the system evolves, intercommunication of the transactions between the buyers’ and sellers’ software, e-way bill system and the banking systems is also mooted. This captures the complete transaction trail and can arrest tax evasion significantly.

But the tax experts are cautious about its implementation as it require updating the businesses’ existing accounting software.

PwC believes that e-invoice system will be a major development and would trigger changes in IT systems as well as the various processes involved in the business.

How does it work?
Step 1: The supplier or tax payer should report the JSON format of the invoice to the Invoice Registration Portal (IRP).

The IRP accepts the e-invoice only as a JSON file. So all the suppliers should have an accounting software that can generate the invoice in such format. The small and medium size tax payers (having annual turnover below Rs 1.5 Crores) not using any online tool to generate an invoice can make use of the accounting and billing software (online/offline) available on the GSTN website free of cost.

Step 2: The IRP will in turn generate a unique Invoice Reference Number (IRN) and digitally sign the e-invoice and also generate a QR code.

Once the invoice is uploaded, the IRP computes hash (an alpha numeric number) based on the supplier’s GST number, invoice number and financial year. The hash becomes the IRN (Invoice Reference Number). Hash is unique to each invoice for the entire financial year. Each hash will be saved in a central registry of GST system ensuring same invoice from the same supplier pertaining to same financial year is not being uploaded again.

The supplier can also generate the hash themselves for which a required feature should be incorporated into their accounting software. In this case, once the JSON invoice with hash is uploaded to the IRP, the hash uploaded by the tax payer will be validated by the hash that IRP generates.

Subsequently, the IRP authenticates the e-invoice by adding digital signature to the JSON. Only the e-invoice signed by the IRP is considered a valid invoice for GST purposes.The signing of e-invoice by seller is not mandatory.

IRP also creates a QR code that contains vital details such as GSTIN of seller and buyer, invoice number, invoice date, number of line items, HSN of major items contained in the invoice as per value and hash.

Step 3: IRP sends the e-invoice data with digital signature and QR code to the seller and buyer on the mail Ids provided in the invoice. IRP also shares the uploaded invoice data with GST and e-way bill system.

The GST System, after validation, makes the e-invoice data available in ANX-1 (annexure of outward supplies) for the seller, and in ANX-2 (annexure of inward supplies) for the buyer. Buyer has an option to accept or reject the transaction. GST system, further, will determine tax liability and input tax credit (ITC).

Meanwhile, e-way bill system creates Part-A of e-way bill using the received data. Only vehicle number have to be added in Part-B of the e-way bill.

On the point that only one invoice can be uploaded at a time into the IRP, Gupta says- “success of e-invoicing will be hugely dependant on the stability of the portal to handle multiple requests at one go on a real-time basis.” However, the concept note assures that based on data reported in GSTR1 for last two years, capacity of the IRP system will be built so as to handle the envisaged loads of simultaneous upload.

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Source: The-Hindu-Business-Line
e-Way bills curb tax evasion, but glitches remain

e-Way bills curb tax evasion, but glitches remain

There are numerous concerns on the functioning of the GST regime, launched two years ago. But the e-Way bill’s system is displaying good traction. While there are a few glitches, users mostly agree that e-Way bills have brought down under-reporting and increased transparency.

The system was rolled out for inter-State consignments in April 2018, and for intra-State consignments two months later, in a phased manner. e-Way bills generation for the period April-June 2019 was almost 40 per cent higher at about 15.65 crore, compared to 11.19 crore in the same period last year.

For transport companies, the system has saved considerable time, removing check-posts and facilitating the shift from a ‘departmental policing model’ to a ‘self-declaration model’. It has also helped in curbing tax evasion.

According to chartered accountant Chirag Chauhan, e-Way bills have reduced tax evasion by almost 80 per cent. He also points out that the drop in GST collections of just 2-5 per cent in the first quarter of FY20, against a sales decrease of 15-20 per cent, is proof that tax malpractices have come down.

Under the norms, every consignment worth above ₹50,000 (raised to ₹1 lakh in a few States as a temporary relief) should begin with the generation of an e-Way bill. The bill must be raised before the goods are shipped and should include details of the products, their consignor, recipient and transporter. Though check-posts have been abolished under GST, a consignment can be intercepted at any point for the verification of its e-Way bill. If found without one, or with invoice discrepancies, a penalty of ₹10,000, or tax sought to be evaded, or, in some cases, 200 per cent of the GST amount, can be levied. These provisions are helping in reducing the disparities between the actual value of the sale and that reported in e-Way bills. Every e-Way bill generated has to be matched at the invoice level with the entries uploaded by the manufacturers or traders in their monthly GSTR-1 returns for outward supplies. Also, the GSTR-1 of the manufacturer or trader gets auto- populated in the GSTR-2A of the purchaser, based on which the latter claims the input tax credit (ITC).

Due to such matching of invoices at multiple levels, there’s hardly any scope for the supplier to under-report sales.

Once the e-Way bill portal is linked to the centralised VAHAN portal, which contains vehicles details, generation of fake e-Way bills gets checked. Further, the system helps in increasing the overall GST compliance, as a recent notification bars a supplier or a recipient from generating an e-Way bill if the GST returns are not filed for two consecutive months.

Some challenges do remain. Complaints have been raised that the time limits prescribed for the validity of an e-Way bill are not in consonance with ground realities.

Time limit

“Genuine reasons for delays should be taken into account while fixing the time limits,” Bal Malkit Singh, former President of the All India Motor Transport Congress, told BusinessLine.

On consignment verification issues, he said: “State borders have paved the way for flying squads and, the vehicles are being stopped randomly on the pretext of checking for collateral extortion.” Another issue, he said, is the lack of flexibility in rectifying errors and changing the destination address.

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Source: The-Hindu-Business-Line
Traders demand govt to fix E-way bill threshold to Rs 1L

Traders demand govt to fix E-way bill threshold to Rs 1L

In a shocker for businessmen, the Punjab government’s amendment to double the E-way bill exemption limit from Rs 50,000 to Rs 1,00,000 for inter-state transactions expired on September 13.

This amendment was valid for one year which was issued last year on September 13 after a lot of hue and cry was raised by the businessmen who claimed that the exemption limit of Rs 50,000 was not sufficient.

Meanwhile, ever since the expiry of the amendment limit, businessmen are up in arms against the government as they are of the view that the limit of Rs 1, 00, 000 should be made permanent as reversing the limit back to Rs 50,000 is not viable for them.

Sunil Mehra, state general secretary of the Punjab Pradesh Beopar Mandal (PPBM), said: “The notification doubling the exemption limit under the E-way bill for within the state transactions from Rs 50,000 to Rs 1,00,000 has expired on September 13. This notification was done last year after intervention of the chief minister, Captain Amarinder Singh, when the PPBM apprised him of difficulties being faced by the business community of Punjab due to low exemption limit of Rs 50,000 under the e-way bill system. But unfortunately, no one paid attention to the fact that the notification was valid only till September 13. This is nothing less than a setback for us as we have been maintaining our accounting records as per the new notification only. Not only we will have to go back to the old system, but this will also put an additional burden on us as even a normal transaction these days is for Rs 50,000 and above. Therefore, we request the state government to do something immediately. Rather than extending the notification, the government should make it permanent for within the state transactions.”

Speaking to TOI Rajkumar Singla, president of the Fastener Supplier Association, Ludhiana, said: “If the exemption limit of Rs 1,00,000 from the E-way bill is halved, it will again lead to harassment of businessmen. The state government has failed to fulfil its promises to the business community of Punjab. We are contemplating to campaign and stand up for our rights. Regardless of our repeated representations to the government, no concrete solution has been taken so far, be it costly power, rising cost of the raw material and labour etc. State finance minister Manpreet Badal has been making false promises that limit is being revised again to Rs 1,00,000, but nothing has been done by the government even after four days.”

Kulpreet Malhotra, a senior member of the United Cycle and Parts Manufacturers Association, said: “It is unfortunate that on one hand the industry is undergoing recession and on the other, the exemption limit for interstate E-way bill has been again revised to Rs 50,000. We had to fight a big battle with the state government last year as well. We are now geared up to do anything to get the exemption limit for the E-way bill to Rs 1,00,000 again.”

Notably, the amendment to double the exemption limit for the inter-state (within Punjab) E-way bill was done on September 13, 2018, by the Punjab government.
At that time, a lot of drama was witnessed as the Central GST department (CGST) had opposed the decision of the state government for the amendment and later 11 items were kept in negative list by the state government on which amendment did not apply.

Source: Times-Of-India.

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E-way bills for gold under consideration

E-way bills for gold under consideration

The government is considering a proposal to make e-way bills necessary for transportation of precious metals like gold to stop malpractices and check revenue leakage, two officials said requesting anonymity. Under the GST’s e-way bill system, the movement of goods requires registration from pickup to drop points.

The GST Council, an apex federal body for matters related to indirect taxes, is expected to consider the proposal at its meeting in Goa on September 20. The Union finance minister chairs the GST Council and it has state finance ministers as its members.

The officials said Kerala has mooted the proposal of making e-way bills mandatory for movement of precious stones and metals even as the Law Committee rejected an idea for doing so citing “security and law and order” in June. In July, the matter was again sent for the reconsideration of the committee, which is an advisory body of the GST Council. The panel has about two dozen members, mainly tax officials. Email queries sent to the Central Board of Indirect Taxes and Customs and the Union finance ministry about the proposal went unanswered.

The officials cited above said Kerala has repeatedly flagged the issue and is unconvinced that e-way bills for gold and other precious items will pose security threats and create law and order problems. Kerala has sought e-way bills to check revenue leakages.

According to the officials, the Law Committee has put up two options before the GST Council. The first option is to make e-way bills mandatory through encrypted mode. Under this option, data related to the movement of such goods will be stored in a server and only authorised officials could have access to it. This will address the security concern.

The other option is to continue with the existing exemption from the requirement of e-way bills as these goods are often transported personally or privately through the traditional couriers called ‘angadia’. It has been underlined that insistence on e-way bills for these items will increase the compliance burden for workers, the officials said.

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Source: Hindustan-Times
GST: B2B invoices will have to be generated on govt portal by Sept

GST: B2B invoices will have to be generated on govt portal by Sept

All invoices for business-to-business sales by entities beyond a specified turnover threshold will be generated on a centralised government portal by September, a move aimed at curbing the menace of fake invoices and evasion of GST, officials said.

The revenue secretary is monitoring the progress of implementation of electronic or e-invoice project for which an officers’ committee has already been set up, they added.

“E-invoice for B2B transactions will be rolled out in next three-four months in a phased manner. The entire invoice would have to be generated on a government portal,” an official told PTI.

The move will help in curbing Goods and Services Tax (GST) evasion through the issue of fake invoices. Besides, it would make the returns filing process simpler for businesses as invoice data would already be captured by a centralised portal.

“Once rolled out, the e-invoice project will allow businesses to simultaneously generate e-way bill if needed,” the official added. E-way bill is required for moving goods exceeding Rs 50,000.

Depending on the success of the project in the B2B segment, the revenue department would be looking at extending it to business-to-consumer (B2C) sales, especially in sectors where the probability of tax evasion is high.

Businesses beyond the specified turnover threshold, to be decided later, would be provided software which will be linked to the GST Network (GSTN) or a government portal for generating e-invoice. The threshold can also be fixed on the basis of the value of the invoice.

The e-invoice generation method will be similar to the one being followed for an e-way bill on the ‘ewaybill.nic.in’ portal or payment of GST on the GSTN portal.

A 13-member officers’ committee, comprising central and state tax officials as well as the GST Network Chief Executive, has been set up to look into the feasibility of introducing e-invoice system to streamline the generation of invoices and easing the compliance burden. The committee will finalize its interim report this month.

The proposed ‘e-invoice’ is part of the exercise to check GST evasion. With almost two years into GST implementation, the government is now focussing on anti-evasion measures to shore up revenue and increase compliance.

There are over 1.21 crore registered businesses under the GST, of which 20 lakh are under the composition scheme.

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Source: Business-standard.

Govt plans to launch GST e-invoices to curb tax evasion

Govt plans to launch GST e-invoices to curb tax evasion

GST officers are working on a system where businesses above a certain turnover threshold will have to generate ‘e-invoice’ on government or GST portal for every sale, thereby effectively reducing the room for tax evasion.

To start with, businesses above a specified threshold will just get a unique number for every electronic invoice or e-invoice generated. This number can be matched with the invoices reported in the sales return and taxes paid, an official said.

Going forward, businesses will be required to generate full electronic-tax invoice or e-invoice recording entire value of sales.

The official said that businesses beyond a turnover threshold would be provided software which will be linked to GST or a government portal for generating e-invoice. The threshold can also be fixed on the basis of the value of the invoice.

“The requirement of e-invoice generation could be either on the basis of turnover of the registered person or value of the invoice. The thinking is, ideally, it should be based on the turnover threshold so as to avoid splitting of sales,” an official told PTI.

GST officers are working on a system where businesses above a certain turnover threshold will have to generate ‘e-invoice’ on government or GST portal for every sale, thereby effectively reducing the room for tax evasion.

To start with, businesses above a specified threshold will just get a unique number for every electronic invoice or e-invoice generated. This number can be matched with the invoices reported in the sales return and taxes paid, an official said.

Going forward, businesses will be required to generate full electronic-tax invoice or e-invoice recording entire value of sales.

The official said that businesses beyond a turnover threshold would be provided software which will be linked to GST or a government portal for generating e-invoice. The threshold can also be fixed on the basis of the value of the invoice.

“The requirement of e-invoice generation could be either on the basis of turnover of the registered person or value of the invoice. The thinking is, ideally, it should be based on the turnover threshold so as to avoid splitting of sales,” an official told PTI.

Giving example, the official said that if the minimum invoice value is fixed at ₹1,000, there is a possibility of businesses of splitting the bills to avoid the invoice-based threshold cap.

E-invoice generation method will be similar to the one being followed for e-way bill on the ‘ewaybill.nic.in’ portal or payment of Goods and Services Tax on the GSTN portal.

The proposed system of e-invoice will eventually replace the requirement of a generation of e-way bill for movement of goods, as invoices would be generated through a centralised government portal. Currently, the e-way bill is required for moving goods exceeding ₹50,000.

The official further said that once full e-tax invoice starts getting generated, it would significantly ease the burden of return filing by businesses as invoice wise data would be auto-populated in the return forms.

“We will have to study global models followed by countries like Latin America, South Korea, and Europe. We will also look at ways to incentivise businesses to adopt the method of e-invoice generation,” the official said.

An officers committee, comprising central, state tax officials and GST Network Chief Executive, has been set up to look into the feasibility of introducing e-invoice system to streamline the generation of invoices and easing compliance burden. The committee will finalize an interim report next month.

The proposed ‘e-invoice’ is part of the exercise to check GST evasion. With almost two years into GST implementation, the government is now focussing on anti-evasion measures to shore up revenue and increase compliance.

There are over 1.21 crore registered businesses under the GST, of which 20 lakh are under composition scheme.

AMRG & Associates Partner Rajat Mohan said e-invoicing would help in avoiding duplication of efforts and minimize manual intervention in filing and checking of tax returns.

“To incentivise businesses to adopt a new system, the tax department could limit the frequency of mandatory departmental audits in case procurements are made on basis of e-invoices,” Mohan said.


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Source: Live Mint
Non-filers of GST returns for 2 months to be barred from generating e-way bills from June 21

Non-filers of GST returns for 2 months to be barred from generating e-way bills from June 21

Non-filers of GST returns for two straight months will be barred from generating e-way bills for transporting goods effective June 21, the finance ministry said.

Businesses under GST composition scheme, however, will be barred from generating e-way bill if they fail to file tax returns for two consecutive filing periods, which is six months.

The Central Board of Indirect Taxes and Customs (CBIC) has notified June 21, 2019, as the day from which any “consignor, consignee, transporter, e-commerce operator or courier agency” would be barred from generating electronic way or e-way bill for failure to file tax returns for the stipulated time period as mentioned in the GST rules.

As per rules, a composition scheme taxpayer who has not furnished the returns for two consecutive tax periods and a regular taxpayer who has not filed returns for a consecutive period of two months would be restricted from generating e-way bill.

In the Goods and Services Tax (GST) regime, businesses have to file monthly tax returns by the 20th day of the subsequent month. However, businesses opting for composition scheme have to file quarterly returns by the 18th day of the subsequent month following the end of a quarter.

The Goods and Services Tax Network (GSTN) has put in place the IT system so that businesses which have not filed tax returns for the stipulated period would be barred from generating e-way bills.

The move, officials believe, would help check GST evasion. During April-December, there were 3,626 cases of GST evasion/violations, involving Rs 15,278 crore.

Touted as an anti-evasion measure, e-way bill system was rolled out on April 1, 2018, for moving goods worth over Rs 50,000 from one state to another. The same for intra or within the state movement was rolled out in a phased manner from April 15.

Transporters of goods worth over Rs 50,000 would be required to present e-way bill during transit to a GST inspector if asked.

With almost two years into GST implementation, the government is now focussing on anti-evasion measures to shore up revenue and increase compliance.

AMRG & Associates Partner Rajat Mohan said with this supplier, transporters and e-commerce operators would be forced not to sell or transport goods to non-filers

“E-commerce, logistics, FMCG companies, and businesses working on the franchise model, would have to immediately develop and implement an automated workflow whereby defaulting business partners are moved out from the supply chain on a real-time basis,” Mohan said.


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Source: Economic Times.
Gaps in e-way bill reporting mechanism may be closed

Gaps in e-way bill reporting mechanism may be closed

After detecting mismatches in some e-way bill submissions, the Centre is now examining more GST Network (GSTN) data to see if such evasions are increasing sufficiently enough to consider withdrawing the facility of generating multiple e-way bills on a single invoice, an official source said on Monday.

The Goods and Services Tax (GST) authorities are now sifting through GSTN data retrieved through return filings and e-way bills to match these with the summary reconciliation statements of estimated tax liability, thereby, forcing businesses to explain discrepancies like under-reporting distances, the official said.

He, however, said the officials are yet to come across any pattern of deliberate evasion by transporters during the exercise which is still at its early stages.

The reconcilation issues can also be due to typo errors, discontinued supply and the expiry of e-way bills before delivery, and not just owing to tax evasion, he said.

“We will seek clarification once we come across differences between the taxes paid and the liability which the tax officer has ascertained after analysing the sales return GSTR-3B and the e-way bill data for the period in question, and the assessee will be given time and opportunity to make his or her case,” he added.

Designed as an anti-evasion measure, the e-way bill system was rolled out on April 1, 2018, for moving goods worth over Rs 50,000 from one state to another.


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Source: Economic Times
GST Network has 1.2 crore taxpayers registered: CEO

GST Network has 1.2 crore taxpayers registered: CEO

A total of 1.21 crore taxpayers have been registered by the Goods and Services Tax Network (GSTN), its CEO Prakash Kumar said on Friday.

“We started with 60 lakh taxpayers. Today, we have 1.21 tax-payers registered and 57.12 crore e-way bills generated so far,” he said.

An e-way bill is an electronic permit that was made mandatory for inter-state transport of goods from June 1, 2018.

It is required to be generated for every inter-state movement of goods beyond 10 km and the threshold limit of Rs 50,000.

Kumar said nearly 500 crore invoices have been uploaded on GSTN portal so far. “A total of 25.21 crore tax returns have been processed till date. The maximum number of returns filed per day is 18 lakh,” he said.

The GST is billed as the biggest indirect tax reform which came into effect from July 1, 2017, and replaced multiple flowing taxes levied by the central and state governments.

The GSTN was set up primarily to provide IT infrastructure and services to the central and state governments, taxpayers and other stakeholders for the implementation of GST.

The portal is accessible to tax authorities for tracking down every transaction, while taxpayers have the ability to connect for their tax returns.

XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Source: Business-Standard.
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