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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
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.
Need to make additional GST payment? Here’s how to go about it

Need to make additional GST payment? Here’s how to go about it

During the course of filing GST Return, a taxpayer may discover additional tax liabilities that he or she may need to pay. GST tax portal has a provision that allows you to do so.

“There is a section in the GST portal that talks about user services. There you need to choose DRC 03 and then opt for annual returns. You can use this to make any additional tax deposits, but need to ensure you have sufficient funds in your electronic cash ledger while using this form to make any additional tax payments,” says Deloitte India, Senior Director, Saloni Roy.

GSTR

GSTR

the shortfall can be on account of tax not being paid or short paid. It can also be on account of tax erroneously refunded or input tax credit wrongly availed or utilized. Payment using DRC 03 can either be voluntarily by the taxpayer when he or she discovers the shortfall, or it can be when the taxman issues a show cause notice (SCN).

In the case of an SCN, a taxpayer who has been issued a notice in form DRC-01 or DRC-02 can make payment and intimate it to the proper officer inform DRC-03 within 30 days from the date of issuance of such notice. However, in the case of voluntary payments, such time limits do not apply.

Is there any interest on these payments? “On any delayed payment, there is an interest liability. This interest can be deposited at the time of making the additional tax payment,” says Roy.

The following details are required in DRC 03:
GSTIN and name;
Cause of payment (Voluntary, SCN, etc.);
Section under which payment is made (73 or 74.Not applicable for voluntary payment);
Reference number, if SCN issued in DRC-01 or DRC-02;
Financial year, tax period and ACT; and
Payment details including interest, penalty, and others.

Where a person has made a voluntary payment of taxes, interest or other dues in form DRC03 before issuance of show cause notice and if tax officials are satisfied with the intimation of an acknowledgment in form DRC-04 will be made available to the taxpayer. In the case of payments against SCN, form DRC-05 specifying about the conclusion of proceedings in respect of the notice will be issued to a taxpayer.

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Source: Economic Times

GSTN adds New Feature in Portal

GSTN adds New Feature in Portal

The Goods and Services Tax Network ( GSTN ) has updated a new feature in the GST portal in connection with the filing of an application for ITC accumulated due to Inverted Tax Structure.

“While filing refund application of input tax credit (ITC) accumulated due to Inverted Tax Structure, the taxpayer can now enter his own GSTN in the inward supply detail statement on the portal,” GSTN said in a statement.

Recently, the GSTN enabled GSTR-9 on GSTN Portal for filing Annual Return. For Filing GSTR-9, an option of ‘Annual Return Tab’ has been enabled by the GSTN (Goods and Services Tax Network) which can be seen in the portal. The due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017 – 2018 has been extended till 30.06.2019.

In January, the portal had updated two new features in the official website including System Generated Acknowledgement of Application of Appeal and the Population of Data from EWB System into Form GSTR-1. At the time of generating E-Way Bill for outward supply, taxpayers enter the details of outward supplies such as invoice number, Date, Value Tax etc. With the new functionality added in the portal, the taxpayers can now easily import these details of outward supply invoices, as indicated in the e-way bill at the time of preparation of Form GSTR-1, by clicking the import ‘EWB Data’ button on the GST Portal in following tiles, (i) B2B Invoices (ii) B2C Large Invoices (iii) HSN-wise summary of Outward supplies.

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

Source: Tax Scan.
Taxpayers can compare tax liability declared in final, summary GST returns forms: GSTN

Taxpayers can compare tax liability declared in final, summary GST returns forms: GSTN

The GST Network (GSTN) on Tuesday said businesses registered under GST can now compare the tax liability declared as well as input tax credit claimed in their final and summary sales returns forms.

The GSTN, which handles the technology backbone for the new indirect tax, has provided a facility to the taxpayers to view and download a report on tax liability as declared in their form GSTR- 1 (final sales return) and as declared and paid in their return filed in form GSTR-3B (summary sales return).

While GSTR-1 for a month is filed by the 11th day of the succeeding month, GSTR-3B is filed and taxes paid by the 20th day of the succeeding month.

GSTN, in a statement said, since GSTR-1 and GSTR-3B are filed independent of each other, a need was felt to provide facility to view liability declared in both the forms at one place.

The new facility enables the taxpayers to view these two liabilities in one table for each return period at one place, which can be compared. This will enable taxpayers to make good of any differences between the two forms filed by them on GST portal, GSTN said.

Further, the GSTN has also provided taxpayers information regarding data of Input tax credit (ITC) as claimed in their form GSTR 3B and as accrued in form GSTR 2A, based on the return uploaded by the supplier.

This functionality has been provided in Returns dashboard on the GST Portal to taxpayers under the headings “Comparison of liability declared and ITC claimed”.

“This facility will help taxpayers in reconciling their liability and ITC details quickly. They can view the monthly comparison as well as cumulative comparison upto the month, on the GST Portal in the tables provided. This will help them in taking corrective steps,” GSTN CEO Prakash Kumar said.

 

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Source: Money Control.
GSTR-9 available on GSTN Portal for Filing Annual Return

GSTR-9 available on GSTN Portal for Filing Annual Return

The Central Government has enabled GSTR-9 on GSTN Portal for filing Annual Return. For Filing GSTR-9, an option of ‘Annual Return Tab’ has been enabled by the GSTN (Goods and Services Tax Network) which can be seen in the portal.

The due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017 – 2018 has been extended till 30.06.2019.

GSTR-9 is prepared based on the earlier process of filling GSTR-1, GSTR-2, and GSTR-3. In GSTR-2, there was a requirement to report details of HSN wise summary of inward supplies. However, as GSTR-2 was not required to be filed till now, one will have to carry out an additional exercise to identify and report HSN wise summary from the books of accounts.

As per section 35(5) of CGST Act, every registered person whose turnover during the financial year exceeds prescribed limit (Rs. 2 cr.) shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 which is called GSTR-9C and such other documents in such form and manner as may be prescribed. Hence, the requirement of GST Audit u/s 35(5) would arise only if the prescribed limit of turnover exceeds Rs. 2 cr. and certified reconciliation statement -GSTR-9C shall require to be submitted.

On the other hand, GSTR-9 is an Annual return which is required to be filed by every registered person irrespective of the threshold limit of turnover.

Consequences for not filing GST Annual Return

Notice to return defaulters– Section 46) Where a registered person fails to furnish a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.

Levy of late fee– Section 47 (2) Any registered person who fails to furnish the return required under section 44 by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter percent. of his turnover in the State or Union territory.

 

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Source: Tax Scan.
GST 2.0: Preparing for integration of e-way bills with GST returns

GST 2.0: Preparing for integration of e-way bills with GST returns

As we prepare to enter the next phase of GST compliance, e-way bills are set to take center stage. With the two systems, GST return filings and e-way bills, likely to see integration and confluence, the challenges are important to make sure that businesses comply with them.

GSTN along with GST Council is steadily paving the way for a smooth transition into the GST 2.0 – the newly proposed GST Return filing system to be introduced on the GST portal. While the full-fledged implementation is starting from 1st July 2019, the pilot run is set to begin in April 2019. While the e-way bill site has seen significant developments in terms of the user interface since its inception, the GST authority has noticed that it is a right time to start integrating the same with GST portal.

One of its plan of actions is to disallow taxpayers from using the e-way bill site from generating e-way bills when they default in filing of GST Returns for two periods consecutively. This would apply when either of GSTR-3B or GSTR-4, whichever applicable, is not filed. It has been observed that most of the taxpayers generating e-way bills belong to the class of taxpayers contributing the most to the GST collections.

Further, sufficient time has lapsed in making sufficient e-way bill data available, which can now be analyzed and gaps can be identified. This change will act as an important tool to locate defaulting taxpayers to fix GST revenue collections. The effective date to implement the rule is still under wraps and currently, the validation on the portal is being worked on.

Another plan of action which has just seen a start is the invoice data transfer from the e-way bill portal to the GST portal for the filing of GSTR-1. This move meets a two-fold objective. The most evident one is to make the users feel accommodative of the ease in data-handling and achieving accuracy. The second objective is to allow real-time monitoring of the transactions to keep an eye on the cases of tax evasion.

The facility for importing e-way bill data for preparing GSTR-1 is already up and running on the GST portal login. It allows importing only those invoices against which e-way bills were generated during the tax period. This serves as an alternative mode of data ingestion apart from the existing methods like excel, JSON or API Integration. However, a taxpayer may still have to separately import the details of the invoices that are not subject to e-way bill rules. The integration works on the basis of a proper declaration of GST Identification number (GSTIN) while generating e-way bills.

It is a noble idea to eliminate the need for multiple feeds of the same invoice data by a taxpayer from the ERP or the accountant’s system onto the GST portal and e-way bill portal. It is a critical regulatory checkpoint to ensure the right amount of ITC claims by businesses through automation.

While these actions point towards the long-term goal of using technology to boost tax compliance, these are most likely to continue under the newly proposed GST Return filing system with few tweaks to fit into the system.

The new system proposes an automated intake of sales invoices on a real-time basis, it also allows the buyer to accept or reject these online, and facilitates seamless single return filing (MAIN Return) for the month. Buyers can also keep such invoices on hold for claiming the Input Tax Credit (ITC) in the following month. His actions will be visible to the seller too, thus enabling lesser turnaround time to file GST Returns.

Small taxpayers having less turnover have got multiple options to submit their quarterly returns – SAHAJ or SUGAM or a more elaborate version of the QUARTERLY return. Likewise, the composition dealers have to continue filing GSTR-4 with the frequency to file being changed now to yearly instead of quarterly.

The crucial aim of building the GST system is to allow a free and transparent flow of credit for taxpayers. The new system looks up to accomplish this. Despite the propositions, there will likely be a few hardships. The input claimed on the missing invoices by the recipient can be filed by the seller within next two tax periods from the input claimed by the recipient. However, if the same is not filed by the supplier, the input claimed by the recipient shall be ultimately reversed with interest and penalty.

Though, taxpayers will continue to face the risk due to the default of supplier when an invoice is not uploaded and returns are not filed timely. Recourse to a genuine buyer is still not available. With the eco-system will continue to evolve and compliance will take center stage for those who want to grow their business. These validations point out that the authorities are chalking out a definitive plan for making way to a smooth implementation of GST 2.0, its on ground implementation will be key.

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

Source: Economic Times
GSTN Alert: New Functionalities enabled from January

GSTN Alert: New Functionalities enabled from January

The Goods and Services Tax Network ( GSTN ) has enabled several new functionalities from January 2019 for the taxpayers. They include the following:

  • Taxpayers can furnish details of security/surety in prescribed form ASMT-05. After submitting the form online, they are required to furnish a hard copy of the original bank guarantee/ surety/ security to the proper officer.
  • Taxpayers can submit an application for compounding of the offenses inform CPD-01.
  • Taxpayers or tax officer can file an application, for rectification of an order passed by an appellate authority (section 161 of CGST Act).
  • The taxpayer can upload notified statements and 5 supporting documents at the time of filing of the refund application, RFD-01A.
  • Tax officer can, after giving an opportunity of hearing to the taxpayer, either allow or reject an application for compounding of offense in form CPD-02.

Further, the below functionalities were added on the CBIC-GST portal for the taxpayers from January 2019.

  • Tax officers can download documents attached with refund application RFD-01A.
  • Tax officers can see GSTR 2A on credit admissible.
  • Tax officers can see ITC 04 on goods sent for job-work.
  • MIS report – on Nil return filers—for a month and for different returns.
  • MIS report—the formation-wise number of taxpayers available fora defined period.


Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: Tax Scan.
GSTN Alert: Two New Features added in GST Portal

GSTN Alert: Two New Features added in GST Portal

The Goods and Services Tax Network ( GSTN ) has added two new features in the GST portal including List of Preferred Banks list while making Payment and the Monthly Refund applications by Quarterly GSTR-1 filers.

From now, every time a taxpayer makes GST payment using in the bank, it will be updated in the Preferred Bank list for that taxpayer. As per the statement issued by the GSTN, up to six preferred banks will be shown to the taxpayer while making e-payment on GST portal.

The GSTN further removed the restriction for applying for a refund on a quarterly basis for quarterly GSTR 1 filers. These taxpayers can now file refund application on a monthly basis if Form GSTR1 for the quarter is filed.


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Source: Taxscan
GST returns non-filers grow faster than tax base

GST returns non-filers grow faster than tax base

The number of tax filers failing to file their returns has been increasing in the 17 months of GST implementation until November 2018, according to an answer submitted by the Finance Ministry in the Lok Sabha.

GST Tax

While the number of people required to file monthly returns has grown 32% from July 2017 to about 98.5 lakh in November 2018, the number of people not filing these returns has grown 167% during that time, the latest Goods and Services Tax filing data showed.

The data also shows that this is not just the case for monthly filers, but also for those under the composition scheme, which allows for quarterly return filing.

While the number of people required to file quarterly returns increased about 55% from July 2017 to 17.74 lakh in November 2018, the number of people who have not filed returns increased about 162% during this period.

In other words, the number of people failing to file returns has grown faster than the tax base itself for both regular and composition filers.

Tax analysts say the reasons are varied, including some taxpayers having too low a turnover, and others getting registered onto GST only due to the insistence of their large clients, and yet others simply daunted by the filing process.

“While the increase in the proportion of non-filers is a matter of concern, it must be borne in mind that several GST registrants may be having nil or low turnover and some others may have taken registration on their customers’ insistence,” M.S. Mani, a partner at Deloitte India, said. “Some of the initial challenges faced by smaller business on the GST portal may also have deterred some of them from attempting to file online returns.”

However, other tax analysts point towards a more serious situation where small businesses are systematically and fraudulently evading tax in the hope that they are too small for the taxman to notice.

“What happens is that a lot of small vendors get onto the system because their large clients force them because the client can avail of input tax credits only if their supplies are from a GST-registered vendor,” a tax analyst with a large consultancy told The Hindu on the condition of anonymity.

“However, these small vendors try to fly below the tax radar. They charge the GST rate on their supplies, but then keep this as their own profit margin instead of paying tax to the government.”

These vendors base these activities on the fact that the taxman will take 2-3 years to notice this activity since invoice matching is still not activated on the GST portal, the analyst added.

“By the time they are noticed, the vendor has already changed their name and GST number and is carrying on their business,” the analyst said.

‘Government loses’

“They have been doing this for 15 years under VAT and are simply transferring that practice to GST. The government loses because it has to pay ITC to the big corporate and doesn’t even get its tax revenue from the small vendors.”

Another analyst explained that, in reality, there are a relatively small number of taxpayers that fall below the ₹20 lakh threshold for filing returns.

“A ₹20 lakh income per year works out to about ₹5,500 a day,” the analyst explained. “Even your corner grocery store or Kirana store would do more business than this in a day. They just don’t file their returns because they are scared to draw the attention of the taxman.”


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Source: The Hindu