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What is E-invoicing?

What is E-invoicing?

E-invoicing

E-invoicing refers to a method in which the entire B2B invoices that are generated by the accounting software, are electronically authenticated by GSTN (Goods and Service Tax Network) for any further use such as generating E-way bills, preparing returns, and the like. In fact, E-invoice does not involve generating or creating invoices from the common portal or the tax department; rather, it includes the submission of invoices already generated from the respective accounting software at the central GST portal.

However, the GST system fails to recognize the invoice formats generated by the different accounting/ billing software. In this scenario, there arises the need for a standard invoice format (schema) which could be easily uploaded on the GST portal. This standard schema needs to be followed by the entire accounting/ billing software in order to generate the JSON of every invoice in that format so as to make the uploading process on the GST portal easy. The E-invoice schema provided by the GST system has mandatory as well as non-mandatory fields which could be used by all types of businesses.

The E-invoice mechanism is likely to be rolled out in different phases starting from January 1st 2020, upon a voluntary basis. In the beginning, it will be applicable only for those taxpayers who are above a particular turnover or an invoice value, and also for volunteers. Later on, it will be implemented for the entire taxpayers in a step-by-step manner.

What do you mean by E-invoicing?

If an invoice is generated by a software on the computer or Point of Sales (PoS) machine then does it become an e-invoice? Is e-invoice as a system where taxpayers can generate the invoices centrally? Many such questions are raised when e-invoice gets discussed.

E-invoice does not mean generation of invoices from a central portal of tax department, as any such centralization will bring unnecessary restriction on the way trade is conducted. In fact, taxpayers have different requirements and expectation, which can’t be met from one software generating e-invoices from a portal for the whole country. Invoice generated by each software may look more or less same, however, they can’t be understood by another computer system even though business users understand them fully. For example, an Invoice generated by SAP system cannot be read by a machine which is using ‘Tally’ system. Likewise there are hundreds of accounting/billing software which generate invoices but they all use their own formats to store information electronically and data on such invoices can’t be understood by the GST System if reported in their respective formats. Hence a need was felt to standardize the format in which electronic data of an Invoice will be shared with others to ensure there is interoperability of the data. The adoption of standards will in no way impact the way user would see the physical (printed) invoice or electronic (ex pdf version) invoice. All these software would adopt the new e-Invoice standard wherein they would re-align their data access and retrieval in the standard format. However, users of the software would not find any change since they would continue to see the physical or electronic (PDF/Excel) output of the invoices in the same manner as it existed before incorporation of e-Invoice standard in the software. Thus the taxpayer would continue to use his accounting system/ERP or excel based tools or any such tool for creating the electronic invoice as s/he is using today.

To help small taxpayers adopt e-invoice system, GSTN has empaneled eight accounting & billing software which provide basic accounting and billing system free of cost to small taxpayers. Those small taxpayers who do not have accounting software today, can use one of the empaneled software products, which come in both flavors, online (cloud based) as well as offline (installed on the computer system of the user).

E-Invoicing Under GST

The GST Council has approved introduction of ‘E-invoicing’ or ‘electronic invoicing’ in a phased manner for reporting of business to business (B2B) invoices to GST System, starting from 1st January 2020 on voluntary basis. Since there was no standard for e-invoice existing in the country, standard for the same has been finalized after consultation with trade/industry bodies as well as ICAI after keeping the draft in public place. Having a standard is a must to ensure complete inter-operability of e-invoices across the entire GST eco-system so that e-invoices generated by one software can be read by any other software, thereby eliminating the need of fresh data entry – which is a norm and standard expectation today. The machine readability and uniform interpretation is the key objective. This is also important for reporting the details to GST System as part of Return. Apart from the GST System, adoption of a standard will also ensure that an e-invoice shared by a seller with his buyer or bank or agent or any other player in the whole business eco-system can be read by machines and obviate and hence eliminate data entry errors.

The GST Council approved the standard of e-invoice in its 37th meeting held on 20th Sept 2019 and the same along with schema has been published on GST portal. Standards are generally abstruse and thus an explanation document is required to present the same in common man’s language. Also, there are lot of myth or misconception about e-Invoice. The present document is an attempt to explain the concept of e-invoice, how it operates and basics of standards. It also contains FAQs which answer the questions raised by people who responded to the draft e-invoice standard used for public consultation. It is expected that the document will also be useful for the taxpayers, tax consultants and the software companies to adopt the designed standard.

No GST Registration Needed for Co-Owner in AoP until the Turnover Reached the Threshold Limit: AAR

No GST Registration Needed for Co-Owner in AoP until the Turnover Reached the Threshold Limit: AAR

The Authority of Advance Ruling in West Bengal has ruled that, GST Registration is not needed for Co-Owner in Association of Persons ( AoP ) until the turnover reached the Threshold limit under the GST Act, 2017.

The Applicant is one of the co-owners of immovable property, jointly owned by three individuals. All three co-owners, including the Applicant, hold an equal share in the property. The property is let out to CGST & CX, Chandannagar Division. Total rental received exceeds the threshold provided under section 22(1) of the GST Act, but the share of each of the three co-owners does not cross the said threshold.

The Applicant seeks a ruling on whether he and the other two co-owners are to be treated as an association of persons or a body of individuals and, therefore, a person as defined under section 2(84)(f) of the GST Act, who is required to be registered under section 22(1) of the Act.

The AAR observed that, “the Applicant and the other two co-owners cannot be treated as an association of persons and, therefore, as a person defined under section 2(84X0 of the GST Act, where their income from renting is separately ascertainable and assessed for income tax individually at the hand of each co-owner. Whether the Applicant is required to be registered under section 22(1) of the GST Act will, therefore, depend on his gross turnover, ascertained separately from the other co-owners, exceeding the threshold as provided under the Act”.

Source: TaxScan.

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GST taxpayers alert! CBIC is going to use this unique number from Friday, here’s how it will benefit you

GST taxpayers alert! CBIC is going to use this unique number from Friday, here’s how it will benefit you

In order to protect GST taxpayers from any harassment at the hands of errant tax officials, the Central Board of Excise and Customs (CBEC), is going to use a unique number in every communication with taxpayers from Friday. Initially, the department will use this unique document identification number (DIN) mostly for investigation related communications such as arrest warrants and search authorizations and it will be later expanded to cover all the communication issued by the officers of the board. All the communication issued on or after November 8 without a computer-generated document identification number will be invalid and deemed to have never been issued, said the CBIC in a letter issued to all the top officers on Tuesday.

The new document identification number to be used by the CBIC is similar to the one used by the CBDT since October 1 this year. GST taxpayers and recipients of summons, search warrants will be able to verify the genuineness of the document by visiting the CBIC’s website.

“The board in exercise of its powers under section 168(1) of the CGST Act, 2017 and Section 37B of the Central Excise Act, 1944 directs that no search authorization, summons, arrest memo, inspection notices and letters issued in the course of any inquiry shall be issued by any officer under the Board to a taxpayer or any other person, on or after the 8th day of November, 2019 without a computer generated Document Identification Number (DIN) being duly quoted prominently in the body of such communication,” said the CBIC in a letter issued on November 5, which was reviewed by the Financial Express Online.

The letter which was issued by the GST Investigation wing under the department of revenue, ministry of finance also made it clear that no communication issued on or after November 8 will be valid without a system-generated DIN number.

“The board also directs that any specified communication which does not bear the electronically generated DIN and is not covered by the exceptions mentioned in para 3 shall be treated as invalid and shall be deemed to have never been issued,” said the CBIC.

What is Document Identification Number (CBIC-DIN) in GST
1. In order to prevent the harassment of genuine taxpayers at the hands of tax officials, the government has decided to create a proper audit trail of all the communications issued by the Central Board of Indirect Taxes and Customs.

2. The 20 digit unique Document Identification Number (DIN or CBIC-DIN) will be computer generated and it will be prominently displayed in the body of the document issued by the officers under the board.

3. Only authorised officers will be entitled to generate CBIC-DIN from the utility developed by the Directorate of Data Management (DDM) hosted on the online portal of the CBIC.

4. Use of CBIC-DIN will be compulsory from November 8, 2019 and no communication without it will be valid.

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Source: Financial Express.
Central GST busts fake invoice racket worth R14cr

Central GST busts fake invoice racket worth R14cr

A fake Goods and Services Tax (GST) invoice scam of Rs 14 crore was unearthed by the Central GST commisionerate where the suspects used it for fraudulently claiming input tax credit (ITC).

The scam came to surface during the course of action by the squads of the Central GST where a Chandwad-based firm M/s Gonglu Agro Pvt Ltd had received fake GST invoices worth Rs 5.58 crore.

Later, the Central GST commisionerate found that this firm was also involved in issuance of fake GST invoices. “During investigation we found that this Chandwad-based firm was involved in issuance of fake GST invoices. The firm has issued fake GST invoices of around Rs 70 crore to facilitate passing on bogus ITC of Rs 8.4 crore,” an official from the Central GST department said.

The Central GST department has arrested the managing director of the company, Rahoul Jain, and is investigating the case to find whether other firms are also involved in such practices of providing fake GST invoice to facilitate bogus claims of the ITC.

The Nashik divisional office of the Central GST (erstwhile office of Central excise, service tax and customs) has jurisdiction across five districts — Nashik, Ahmednagar, Dhule, Jalgaon and Nandurbar.
There are over 1.10 lakh businesses registered in the district of which 60,000 businesses are registered with the Nashik divisional office of the state GST, while remaining 53,591 are registered with the divisional office of the Central GST.

The new tax regime GST came into effect from July 1, 2017 replacing the multiple indirect taxes and traders with turnover of below Rs 20 lakh were exempted from GST, while those with annual business turnover up to Rs 1 crore are eligible for composition scheme.

The GST council made several changes in the past following introduction of GST and the exemption limit had was increased from Rs 20 lakh to Rs 40 lakh and only those businesses with turnover of above Rs 40 lakh are under the tax net.

Source: Times-Of-India.

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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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Now, officers to exclusively handle GST, Customs complaints

Now, officers to exclusively handle GST, Customs complaints

In line with Prime Minister Narendra Modi’s assurance that honest taxpayers would not be harassed and wealth creators would be respected, the indirect tax body – Central Board of Indirect Taxes and Customs (CBIC) has directed to appoint a nodal officer in each CGST and Customs Commissionerate to sort out taxpayer grievances.

Industry and tax experts have hailed the decision saying that the move would ensure an escalation point for taxpayers in case their grievances are not addressed at designated level.

“In order to institutionalize the taxpayers’ services in the field formations, it is necessary to designate officers who are to act as the nodal officers assigned with the job of taxpayer service,” CBIC Chairman P. K. Das has written to senior officers.

Accordingly, each CGST and Customs Commissionerate would have a nodal officer in the rank of Joint/Additional Commissioner. These officers would draw up plans for reaching out to the stakeholders in their jurisdictions.

“The Directorate of Taxpayer Service would regularly monitor the work done by the nodal officers who would be extended arm of the CBIC for rendering taxpayer services.

“Any move which identifies a certain person as someone who could act as central point for escalation of cases is good move. It is a good move but one has to see how effective it is. In order to ensure that it works, a transparent monitoring mechanism has to be there,” said Amit Bhagat, Partner, Dhruva Advisors.

The CBIC Chief in his letter to senior field officers noted that PM Modi had emphasized the urgent need to prioritize taxpayer service.

He noted that taxpayers committing minor or procedural violations should not be subjected to disproportionate or excessive action and that wealth creators are respected.

Rajat Mohan, Senior Partner, AMRG & Associates said that taxpayers presently have to chase various officers for resolving issues and hence the move to appoint a nodal officer would be a big relief.

Source: Economic-Times.

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GST applicable on Interest / Late Fee / Penalty due to delayed payment of consideration received after its imposition: AAR

GST applicable on Interest / Late Fee / Penalty due to delayed payment of consideration received after its imposition: AAR

The Chennai Bench of Authority of Advance Rulings ( AAR ) in an application filed by M/s Chennai port Trust held that interest, late fee and penalty due to delayed payment of consideration received after imposition of GST liable to GST.

The applicant is engaged in the supply of port services and incidental supply of goods like disposal of discarded assets. They are notified as a major port by the Central Government under the Indian ports Act, 1908. The applicant has collected an amount as interest / late fee/penalty for delayed payment of consideration for the original service. This amount was received after July 1st, 2017 and separate invoices Rent Claim Advance (RCA) Receipt are raised by the applicant.

The issue in the present case is the determination of the applicability of GST on receipt of interest, late fee, a penalty by the applicant.

The applicant has contended inapplication of GST on the ground that the supply is a continuous supply of services rendered before July 2017 i.e. introduction of GST.

The bench constituting of Members Ms M.G. Kata and T.K. Selvaan held that the amounts received on or after 01.07.2017 towards interest, late fee, penalty relating to the services of lease/rent, due to delayed payment of consideration for those services rendered by the applicant before 01.07.2017, are liable to GST. It has been held that there is a payment of a separate consideration for this tolerance of delayed payment of lease/rent. Thus, this tolerance on the part of the applicant for the delayed payment of lease/rent by collecting an interest/late fee/penalty is a separate supply of service as covered by Section 7(1)(a) of the CGST Act.

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Source: TaxScan.
18% GST applicable to Works Contract of Residential Quarters, rules AAR

18% GST applicable to Works Contract of Residential Quarters, rules AAR

The Authority of Advance Ruling ( AAR ) in Madhya Pradesh has ruled that, 18% Goods and Services Tax ( GST ) applicable to Works Contract of Residential Quarters.

The AAR has clarified the rate of GST on contract for Construction of building and structure for colony a village Siveria at 2 x 660 MW Shree Singaji Thermal Power Project Stage – II Khandwa.

The AAR observed that the issue before us is squarely covered under Section 97(2)(a) of the Act and therefore we admit the application for consideration.

The authority vide order dtd.18.10.2018 had ruled that “The works contract service of construction of 599 residential quarters allotted to the applicant (Shreeji Infrastructure P.Ltd.) by MPPGCL will merit classification under SAC 9954 and would attract GST @18% (9%CGST + 9%SGST)”.

Construction of residential quarters, though within the precincts of Power Plant’ cannot by any stretch of argument and imagination be termed as the work entrusted to the applicant.

The AAR also observed that, the GST will be applicable @18% under SAC 9954, in as much as it refers to the construction of residential quarters, which was awarded to M/s.Shreeji Infrastructure P.Ltd., as already ruled vide our order no.15/2018 dtd.18.10.2018.

Source: TaxScan.

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  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

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Gujarat HC serves notices on govt, GST council for breach of refund norms

Gujarat HC serves notices on govt, GST council for breach of refund norms

The Gujarat High Court has issued notices to the union government and the GST Council over the alleged breach of refund norms by field officers under the goods and services tax (GST) regime.

Under the Rule 92 of the Central GST (CGST) Act, the claim of the refund has to be made in the RFD 04 form. Thereafter, the officer concerned can accept or reject the claim after his investigations.

If the claim is accepted, he would issue refund in the form RFD 06. In case the refund is required to be adjusted, the officer would withhold it in the form RFD 07. If the refund is not admissible, partly or wholly, this would be communicated through the form RFD 08.

If the amount is rejected, it would be credited to the government account under the Rule 93 of the

Gujarat HC serves notices on govt, GST council for breach of refund norms CGST Act, but for that, due process of RFD forms has to be followed.
A petitioner moved the high court, saying the field officer concerned rejected his claim of refunds without resorting to RFD forms. He reversed it under the Rule 93, which, he argued, could not be done without following the due process.

Abhishek Rastogi, counselor of the petitioner and partner at Khaitan & Co, said many petitioners were keen to move the court over the lapses. “The law provides that the denial of the refund has to happen only after compliance with the procedure laid down. We have challenged the rejection order, which has not followed the due process of law,” he said.

Source: Business-Standard.

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Government orders biggest review of GST since its launch

Government orders biggest review of GST since its launch

Two years after its launch, the government has begun the biggest review of GST – including a possible resetting of rates along with a scrutiny of the slabs-to tone up collections and plug leakages.

The task has been assigned to a 12-member committee of state and central government officials to “augment GST collection and administration”, set up a day before the PMO leads consultations with state chief secretaries on Friday, where it is expected to urge them to push for improved collections.

The terms of reference indicate the panel should suggest systemic changes to prevent misuse, improve voluntary compliance, boost overall compliance monitoring and suggest anti-evasion measures. With inverted duty structure proving to be a source of leakage in sectors like restaurants, sources told TOI that the rates may be reviewed.

The GST review committee can co-opt other state government representatives to look at fitting some of the products in other slabs.

There are several sectors where the problem persists. In case of restaurants, for instance, the withdrawal of tax credit on payment for goods and services such as rent has prompted many players to rework the lease agreement in a way that tax payment is avoided and the rent is lowered.

GST collections have slowed down in recent months and have grown at a shade under 5% during the first half of the current financial year, against the target of 13%. While a part of the slowdown is attributed to the state of the economy, especially the sharp fall in auto sales and floods, officials are also worried over weak enforcement in the states, who have been assured compensation by the Centre in case collections grow at under 14% during the year.

In recent weeks, Opposition-ruled states have attacked the Centre on GST collections and said that tax collections have been hit due to a faulty design and not necessarily due to a slowdown. They have blamed the tax cuts for lower collections, a charge that has been rubbished by the Centre, which has said that states were party to all the “unanimous decisions” taken by the GST Council.

At last month’s meeting of the GST Council, Finance Commission chairman NK Singh had flagged the need to review the slabs, which currently stand at 5%, 12%, 18% and 28%. When GST was launched in July 2017, the idea was to merge the 12% and 18% slabs and reduce the number of items in the top bracket. While there are fewer items facing 28% levy than two years ago, officials have said that given the poor revenue realisation the revenue-neutral rate will be 16-17% if the 12% and 18% brackets are merged, which may be politically difficult since there will be a larger number of items where the tax burden will go up.

States have petitioned the Finance Commission to increase the compensation period by another three years, which many believe makes the system leaky as states are assured of revenue. For instance, often states are accused of not following up on leads that are generated every month through a system of data analytics.

Source: Times-Of-India

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

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