One of the biggest and positive changes that took place in 2020 is E-invoicing under GST. The main intention or reason behind introducing the concept of e-invoicing was to restrict and reduce fake invoicing that had been happening and was a great concern of the government.

The government has introduced e-invoicing in a proper phased manner. If you haven’t gone through all the changes in rules and regulations that had been made mandatory, you need not worry.

Profitbooks is here to give you a clear insight in a detailed manner about E-invoicing under GST.

E-Invoicing under GST

E-Invoicing, which stands for ‘electronic invoicing’ is a system where B2B invoices are authenticated electronically by GST Network (GSTN). It is an electronic authentication mechanism under GST. Under this system, an identification number, Invoice Reference Number (IRN), is issued against every invoice by the Invoice Registration Portal (IRP).

What happens here is that all of your invoice information gets transferred from this portal to both other portals; GST portal, an e-way bill portal, simultaneously in real-time. This reduces the need for entering the data manually as the information is passed directly by the IRP to the GST portal.

Changes made in the current invoicing system

The fundamental change in the E-invoicing system from the old invoicing system is that the seller now needs to print the QR code and IRN number on the invoice before issuing it to the buyer.

For Businesses that use ERP / business management software, it will be very easy to manage e-invoice requirements without many changes to the business process.

Who is applicable for E-Invoicing under GST?

E-Invoicing has been made applicable from 1st October 2020 to all the businesses who had aggregate turnover more than Rs.500 crore limit in any of the preceding financial years from 2017-18 to 2019-20.

Moreover, from 1st January 2021, e-Invoicing has been made applicable to businesses exceeding the Rs.100crore turnover limit in any of the financial years between 2017-18 to 2019-20. This has been intimated in Notification No.88/2020 – Central Tax.

Another thing that has been notified in CBIC Notification No.13/2020 – Central Tax is that irrespective of the turnover, e-invoicing won’t apply to the following categories of registered persons for now.

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

Benefits for businesses

E-invoice initiated by GSTN will have the following benefits on businesses:

• E-invoices that are created on one software can be read by another. This allows interoperability and helps to reduce data entry errors.
• There is real-time tracking of invoices prepared by the supplier.
• It helps in backward integration and automation of the tax return filing process.
• There is a faster availability of genuine input tax credit.
• There exists a lesser possibility of audits/surveys by the tax authorities as the information they require is available at a transaction level.

Implementation dates

The GST Council has approved the introduction of e-invoicing in a phased manner to safeguard that businesses get enough time to familiarize themselves and adapt to the new system of e-invoicing.

For Taxpayers with a turnover of ?500 crores and more, e-invoice is already introduced from 1st October 2020.

For businesses with a turnover of ?100 crores and more, it has been made applicable from 1st January 2021.

It is expected that e-invoice will be valid for all businesses from 1st April 2021.

How does an E-invoice look like?

Transactions needed under E-Invoicing

E-Invoicing applies only to B2B Business to Business transactions. These B2B Supplies include domestic supplies as well as Exports. Moreover, Supplies to SEZ B2B Reverse Charge Invoices and Supplies through E-commerce Operators are also covered under E-Invoicing.

These transactions are also covered under GST E-invoicing if transaction through E-commerce comes under RCM. Moreover, an e-commerce operator can also generate IRN for the same thing.

E-invoicing is not required if there are B2C – Business to Consumer transactions. But for taxpayers with AATO above Rs 500 Cr, the invoices must contain a self-generated QR Code. Import transactions do not get covered under E-Invoicing.

Mandatory fields of an e-invoice

An E-invoice must mainly obey the GST invoicing rules. Moreover, it should follow the invoicing system or policies followed by each industry or sector in India.

Below is a detailed list of the contents of the latest e-invoice format as notified on 30th July 2020 via Notification No.60/2020 – Central Tax. It includes 12 Sections (mandatory + optional) and 6 annexures consisting of a total of 138 fields.

Out of the 12 Sections, 5 are Mandatory and 7 are Optional and 2 annexures are mandatory.

The following fields must be compulsorily declared in an e-invoice:

Generation for an e-invoice under GST

To generate an e-invoice, taxpayers will have to follow the e-invoice schema and submit mandatory details accordingly. Following is the list of mandatory and optional parameters:

Transaction details: tax scheme, supplier type

Document details: type, number, and date

Supplier information: legal name, GSTN address, location, PIN code, and state code.

Buyer Information: legal name, GSTN number, address, location, state code, and PIN code

Dispatch from address details

Shipping details

Item-related details: service/ goods, HSN code, total amount, GST rate, Assessable amount, total item value.

Batch number (if items are being moved in batches)

Invoice details: assessable values and total invoice value

The Aftermaths

An invoice is created from the taxpayer’s system itself. Then it is sent to Invoice Registration Portal (IRP) for authorization. After being authorized, the invoice data is updated with IRPs digital signature and a QR Code along with Invoice Registration Number (IRN).

There are multiple modes of generating e-invoice that is made available for the taxpayers to use. Following are some of them:

• Web-Based
• API Based
• SMS Based
• Mobile App
• Offline tool based
• GSP based

Possible to generate E-Way Bill along with E-Invoice?

Yes, you can! Because the generation of E-way Bill has now been inter-twined with E-Invoicing. IRP can help us to generate not only IRN but also E-way bills, for the documents that qualify.

As per the data sent, the IRP system returns IRN or E-way Bill Number or both. If the taxpayer sends transportation details along with invoice details, IRP communicates with the E-Way Bill portal. Thus, it generates an E-Way bill.

Software used for GSTN’s e-invoicing

E-invoice can be created with the help of any software/tool that supports the given e-Invoicing format. It is important to prepare the system to send and receive invoice data. It is suggested to choose a solution that can solve all your requirements around e-invoicing and GST compliance.

IRIS Onyx is one complete e-invoicing software solution that helps you to make your e-invoicing effortlessly and without much hassle. It is a cloud-based advanced e-invoicing solution that integrates with your billing systems. It also helps you generate IRN effortlessly without disturbing your current business processes.

Exemptions from E-invoicing:

Following are the entities which are exempted from e-invoices:

• Special Economic Zone
• The insurer or a banking company
• Goods transport agency supplying services
• Passenger transportation service suppliers
• Admission to the exhibition of Cinematograph Films in Multiplex Screens

One thing that is very important to note is that Exemption is QUA BUSINESS and NOT QUA TAXPAYER. In layman’s terms, a taxpayer who is engaged in multiple lines of business within the same GSTIN has to determine the activities; which are not covered within the aforementioned exemptions.

Conclusion

By now you must have got a clear idea of all the changes made in the e-invoicing system and the rules and regulations. To curb the fake invoicing happening all over the nation, the government had implemented the concept of e-invoicing under GST. And thus, it is necessary to be aware of all the implemented rules.

Looking for a simple way to create GST-compliant invoices?

Find out how ProfitBooks can help you with your accounting needs! Get your free account with ProfitBooks today.

Also read:

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Goods and Services Tax (GST) is an important part of a nation’s taxation policy. It is a single unified tax system that has been implemented in many countries around the world.

It is one of the biggest tax reforms that has replaced various taxes, such as value-added tax, excise duty, service tax, etc.

Above all else, it has brought in a uniform tax structure which has made taxation easier and more transparent, thereby benefiting both the consumer and the government.

If you’re just beginning to learn about GST (Goods and Services Tax) and want to gain insight into its various types of supply, you’ve come to the right place! In this article, we will be covering concise definitions of GST and its supplies like Zero-rated supply, Nil-rated supply, Non-GST supply or Non-taxable supply and exempt supply.

We will also discuss the definitions of each in the context of India, the United States, Australia and the United Arab Emirates.

GST is a comprehensive, multi-stage, and destination-based tax that is levied on every value addition. It is charged at every stage of the production process, right from the manufacturing stage up to the point of sale.

This tax is applicable to both buyers and sellers and it is essential to understand the different types of GST tax supplies to ensure compliance with the taxation system.

Before moving forward, you need to know that GST is an indirect taxation system in India, Australia and 160 other countries. In the United States, indirect tax is charged under the Sales Tax (not GST).

In the United Arab Emirates, indirect tax is UAE VAT. Taxation policies differ from nation to nation. Now that you understood this, let’s dig into the information.

1. Zero-Rated Supply

A zero-rated supply is a type of GST supply in which the rate of tax is zero. This means that the supplier of the goods or services does not have to pay any GST, but they can still claim a refund of the input tax credit.

This type of supply is generally used for exports, international supplies and other supplies that are not subject to GST. 

• In India, a zero-rated supply includes the export of goods or services, the supply of goods or services to an SEZ (Special Economic Zone) and the supply of goods or services to an international tourist. 
• In the United States, zero-rated supply is a type of tax exemption in which certain goods and services are not subject to sales tax. 
• In Australia, zero-rated supply refers to the supply of goods or services that are GST-free. It is a supply of goods or services taxed at a rate of 0%. This means that the GST amount payable on the supply is nil. 
• In the UAE, zero-rated supply means a type of tax-exempt supply of goods or services. It is typically used to refer to certain types of supplies which are not subject to Value Added Tax (VAT). These supplies are still listed on the tax authority’s register but are not subject to VAT. 

2. Nil-Rated Supply

A nil-rated supply is a type of GST supply in which the rate of tax is nil but the supplier of the goods or services cannot claim any input tax credit. This type of supply is generally used for certain types of goods or services that are exempt from GST. 

• In India, a nil-rated supply includes the supply of goods or services to an unregistered person, the supply of goods or services to a person outside India and the supply of certain goods or services such as agricultural produce. 
• In the US, Nil-Rated supply means the supply of goods or services for which no sales tax is charged. This applies in states where there is a sales tax, such as California.
• In Australia, a nil-rated supply refers to a supply of goods or services for which no GST is charged. These supplies include items such as public transport.
• In the UAE, Nil-rated supply is a term used in Value Added Tax (VAT) legislation to describe goods and services that are exempt from the 5% VAT rate.

3. Non-GST Supply or Non-Taxable Supply

Non-GST supply or non-taxable supply is a type of GST supply which does not attract any GST. This means that the supplier does not have to charge GST on their sales, and also does not get the input tax credit.

• In India, some items like alcohol, petrol, and diesel are non-GST supplies.
• In the United States, non-taxable supplies are goods or services that are not subject to sales or use tax.
• In Australia, Non-GST or non-taxable supply refers to any goods or services that are not subject to GST. Examples of non-GST or non-taxable supplies in Australia include rent, residential accommodation, some medical services, some goods exported overseas, and some educational services.
• Non-taxable supplies in the UAE are goods and services that are exempt from Value Added Tax (VAT) in accordance with the UAE VAT Law. Examples of non-taxable supplies include basic food items, educational services, healthcare services, international transport services, and certain financial services.

4. Exempt Supply

An exempt supply is a type of supply which does not attract GST at all. This type of supply is generally used for certain types of goods or services that are exempt from GST.

This means that the supplier does not have to charge GST on their sales and they cannot get input tax credit either.

• In India, an exempt supply is a supply of goods or services on which a Goods and Services Tax (GST) is not applicable. A list of exempt supplies is outlined in the Central Goods and Services Tax (CGST) Act and includes items such as essential food items, public transport services, education and health services, and agricultural produce.
• In the United States, an exempt supply is a type of supply of goods or services that is not subject to a sales tax. This can include items such as food for home consumption, prescription drugs, medical services, and many types of government services.
• In Australia, an exempt supply is a type of supply that is not liable for Goods and Services Tax (GST). This includes certain health services, certain food items, educational services and some other types of supplies. Exempt supplies also include supplies made to the Commonwealth, a state, or a local governing body.
• In the United Arab Emirates (UAE), an exempt supply is a type of taxable supply of goods or services that is exempt from Value Added Tax (VAT). This includes certain supplies of healthcare, education, financial services, real estate, international services, exports of goods and services and other supplies as outlined in the UAE VAT law.

Difference between Zero Rated, Nil Rated, Non-GST and exempt supplies (India & US)

• In India, zero-rated supplies are goods and services that are subject to GST but are exempt from paying any GST. In the United States, zero-rated supplies are goods and services that are subject to sales tax but are exempt from the sales tax rate. 
• In India, Nil-rated supplies are zero-rated supplies under the Goods and Services Tax (GST). This means that the supplier is not required to charge GST on the supply of goods or services, and the recipient is not eligible to claim any input tax credit on the same. In the United States, Nil-rated supplies refer to goods or services that are exempt from any sales tax, use tax, value-added tax (VAT) or any other type of similar taxes. These items are not subject to taxation by the state or local government but may be subject to taxation at the federal level. 
• In India, Non-GST supplies are services provided by the Government (such as postal services, police and defence services, etc.), the sale of agricultural produce, alcohol for human consumption, petroleum products etc. In the United States, Non-taxable supplies such as the sale of prescription drugs, medical equipment and prosthetic devices, newspapers, magazines etc are exempt from sales tax in the US.
• In India, exempt supplies include curd, milk, fresh fruits, bread, etc. In the United States, certain services provided by the federal government are exempt from taxation, including postal services and military housing. 

Final Notes

To summarise, zero-rated supply is a type of GST supply where the GST rate applicable is 0%, but the supplier can still claim the input tax credit.

Nil-rated supply is a type of GST supply where the GST rate is also 0%, but the supplier cannot claim the input tax credit.

Non-GST supply or non-taxable supply is a type of GST supply which does not attract any GST, and exempt supply is a type of GST supply which is exempt from GST.

The definitions of these supplies vary from country to country, so it is important to understand the specific laws of the country you are in.

If you’re looking for an ideal and user-friendly one-stop solution for all your accounting and invoicing needs, or maybe wish to get some more clarity on financial management. Find out how ProfitBooks can help you with your accounting needs!  Create your account for free today.

Also Read:

• How to Generate E Way Bill on GST Portal
• How to Make Your Business GST Compliant?
• List Of Documents Required For GST Registration
• What are Liabilities in accounting?
• Free accounting software for small businesses

The post Difference between Zero Rated, Nil Rated, Non-GST and exempt supplies appeared first on ProfitBooks.net.

But there are many businesses still that are not very sure about various compliances which can lead to heavy fines and penalties.

Rules are laid down by the committee for the way we maintain our records, how we raise invoices and how we report our purchases and sales, and ultimately, the way we pay our taxes and file returns.

You are GST compliant If your business is adhering to all these above regulations.

So here, we have come up with complete details about how to make your business GST compliant and let your company run towards success.

The various steps that let your business fall under compliance are as follows:

1. Figure out if you are liable to compulsorily register under the GST

As per the registration guidelines, you need to register if your annual turnover is exceeding 10 lakhs in special category states and 40 lakhs in other states.

It is mandatory to get the registration done if you fall under the below suppliers’ categories:

• Casual taxable persons
• Interstate suppliers
• Persons that are taxable under the reverse charge basis.
• If required to deduct TDS or TCS
• Distributors under input service
• Taxable non-resident people.
• Principal or agent who is making sales on behalf of some other person.
• People who are involved in supplying goods via e-commerce operators are further liable for tax collection at the source.
• All the e-commerce operators provide a place where the suppliers can deal with any supplies.
• The service providers online provide service from outside the country to people in India who are not registered.

2. Get Registered

Official Portal For Becoming GST Compliant

Once you get clarity on whether you should get registered or not under GST, you can proceed further.

If you are liable to register, you will have to start the registration based on the taxation laws.

You need to follow the below-mentioned steps:

• You need to access the portal and get yourself enrolled by validating the mobile number and e-mail id. The portal is highly user-friendly, and you will be able to get registered easily.
• Once the enrolment is done, a provisional registration certificate will be allotted in Form GST REG-25.
  (Keep in mind that even in any case if you have got the registration done multiple times on a single PAN, still you will get one registration certificate. If in case you are supplying services in many states, then it is required to take registration separately for all states.)

Learn more about the GST registration process and the documents required for GST registration.

3. Raising Invoices Under GST

Raising invoices under GST

A GST compliant invoice is to be issued by the registered business. Draft rules specify the fields that are to be provided at the time of issuing an invoice.

There are about 16 fields that must be included; suppliers are free to choose a format of the invoice and affix their logo, so long as it includes the relevant fields.

A lot of confusion about how the tax requires invoices to be ‘uploaded’ is there. However, no pdfs or jpegs are required to be uploaded. A registered supplier must update the details of the invoice issued by him on the GSTN portal. The issued invoices should be electronically indexed through the common portal.

Information about the buyer and seller of an invoice on the portal is captured. Through this information, GSTN auto-populates purchases made by a registrant.

This is the first critical step towards compliance by providing invoice details. It links with purchases in the buyer’s profile and allows him to claim the benefit of taxes paid on purchases against his total tax outgo.

Find out how to create a GST-compliant invoice.

4. Classifying Transactions

Using HSN/SAC code mapping, you must classify all transactions as either “goods” or “services.”

Some of these classifications have changed from the old valued added tax (VAT) laws. For example, restaurants classified as “goods” under state VAT laws are now classified as “services” under GST.

Besides, we have adopted the integrated GST (IGST) model, which classifies transactions into two categories: interstate transactions and intrastate transactions. You should consider frequent changes in tax rates and exemptions and reclassify items and redefine tax rates as needed.

Learn more about HSN/SAC codes.

5. Filing GST Returns

GST Return Filing Official Portal

Filing timely returns with the correct information is an essential aspect of compliance and ensures a good rating. Returns are to be filed in the subsequent months on a monthly/quarterly/annual basis; incomplete data may result in invalid returns.

Learn everything about various types of GST returns.

6. Systems Transition and Preparedness

Check to see the compliance of the system you have in place and if it can be updated as per current changes. Its laws are expected to undergo many more changes before it stabilizes, hence pay attention to software support.

You must have a clear understanding of the applicable provisions of place and time of supply, as provisions differ with industry, commodities, and location. This can be done with proper accounting software like Profitbooks.

Once you follow all the above-mentioned steps for the GST compliance checklist, you will get compliant with the rules and conduct the business smoothly without any issues or concerns.

New tax laws will reform your taxation and affect almost every aspect of your business operations. As a business owner, it is important to understand this, and its implications, and to adopt a robust system that will help alleviate compliance worries.

Be proactive and face the challenges head-on rather than react to problems arising from noncompliance, and you will likely be much better off.

7. Use GST compliant Accounting System

ProfitBooks – GST Compliant Accounting Software

If you want to make your business GST compliant with minimum effort, it’s advisable to use good accounting software.

For example, the invoices created using ProfitBooks accounting software are GST compliant.

ProfitBooks also lets you file GST returns easily from the application itself.

Apart from this, an audit trail is maintained in ProfitBooks so that you have a record of all the transactions recorded in the system.

It’s free to register with ProfitBooks.

Create your free account today.

Conclusion

To navigate the complexities of the tax system effectively, follow these essential steps:

Firstly, determine your liability for registration. Find out if you need to register based on your annual turnover.

Next, get registered on the official portal. This process is user-friendly and requires validating your mobile number and email ID.

Ensure that you issue invoices with the required information. There are specific fields that must be included, but you can choose the format and add your logo.

Accurately classify your transactions as either goods or services using HSN/SAC code mapping. Keep in mind that some classifications have changed under the new tax laws.

File your returns on time with the correct information. Incomplete data may lead to invalid returns, so make sure you provide accurate details.

Prepare your systems for the changes brought about by the new tax laws. Stay updated and consider using a reliable accounting system like ProfitBooks to simplify your compliance efforts.

By following these steps, you’ll be able to effectively navigate the tax system and ensure compliance for your business.

Also Read:-

How to set up an efficient inventory management system
How to Write a great business plan
How online bookkeeping saves time and money

The post How to Make Your Business GST Compliant? appeared first on ProfitBooks.net.

Every registered person except the composition dealer, TDS, and TCS deductor is required to file it.

It is a monthly return and the payment of tax in GST is linked with GSTR 3b. It means we make the payment of tax under GST while filing GSTR 3b.

Earlier GSTR 3 was supposed to be the GST return. This form was introduced as a summary form till the GSTN portal can make the GSTR 3 life

But after the case of AAP & Co, the rules were charged retrospectively. GSTR 3b was mentioned as the return prescribed under section 39 of the CGST Act.

In this article, we will cover recent changes in this tax regime, the consequences of not filing this return, and the best practices for filing GSTR 3b correctly.

Recent Changes In GSTR 3b

GSTR 3b Login Page

Recently there are many changes in GSTR 3b. Earlier a new return filing system was proposed by GSTIN. But after spending around a year, it is decided to scrap it.

Now the requisite changes will be made in this itself to make it the normal GST return.

Let us have a look at those changes.

GSTR 3b will get the auto-populated data from GSTR 1.

In many cases, taxpayers file GSTR 1 with high turnover but skip GSTR 3b. In some cases, they file the latter with very less turnover. It results in passing on the ITC to the buyers but tax is not paid to the government.

Many GST frauds were executed using this pattern. Then CBIC decided to link the two returns.

Now the data filled in GSTR 1 will auto-populate.

Example: M/s ABC Ltd filed their GSTR 1 with a turnover of Rs. 10lac with a tax liability of Rs. 1,80,000. Now at the time of filing GTSR 3b this Rs. 1,80,000 will auto reflect. In case of less deposit of tax, a negative report may be generated and sent to the Department officers.

Consequences For Not Filing The GSTR 3b Correctly

There can be dire consequences for incorrect filing of GSTR 3b. It is linked to the payment of tax.

Any delay or misreporting in GSR 3b affects your liability.

1) GST 3b is non-editable. Once the return is filed, you can’t open it and make any corrections. Although there is no such restriction in the CGST Act. But the GSTN portal does not allow that.

In a circular CBIC suggested the manner of changes in GSTR 3b. They advised me to make a corresponding correction in the return of the next month.

For example, if the turnover of Rs, 200000 is reported as a turnover of Rs. 20,00,000 you can reduce the turnover in the coming months. But this resolution is not viable in every case.

There are many instances when this is not possible to make the exact effect in the upcoming GST returns. E.g. If I reported the turnover of CGST & SGST and IGST.

Now I don’t have any turnover in IGST even in the coming months. How I will be able to correct this error?

2) Specifically in the case of taxpayers making an export supply, a misreporting can be disastrous. The refund in case of export is granted by ICEGATE.

They grant the refund only when the data is transmitted from the GSTN portal to ICEGATE. But in case of any mismatch in GSTR 3b, GSTR 1, and shipping bill details, the data is not transmitted.

It is very difficult to correct the data in the coming months as we report consolidated figures. There is no way out to tell the bifurcation of reported figures.

3) Recovery proceedings – It may also make you liable for the recovery. If you have over-reported in GSTR 1 but paid less tax. 

Tips For Filing A Correct GSTR 3b In Changed Scenario

Tips For Filing GSTR 3b

Now GSTR 2b is also auto-drafted by the GSTN portal. Now we should emphasize the correct filing of GSTR 3b.

Here we have compiled some small tips for the correct filing of GSTR 3b.

1) Reconcile the Purchase register with GSTR 2b before availing of an ITC.  Now a reconciliation tool is available on the GSTN portal. You can use that tool to reconcile the ITC of your purchase register with the ITC reflected in GSTR 2b.

If there are some small mismatches then you can still claim the ITC. but if some of the ITC is missing in GSTR 2b, you need to leave that ITC. But you can communicate to your supplier to include your invoice in his next return. Once it is reflected, you can claim the ITC.

2) Match your turnover with GSTR 1. You can match your turnover with GSTR 1. It should be a regular practice. Every month your Sales should match with GSTR 1.

In case of a gap, the department may ask you to pay the difference. When we file GSTR 1 we declare the turnover. This declaration makes us liable to pay the tax. But at the time of GSTR 3b, if we pay less tax, recovery proceedings can be initiated.

If you have over-reported a liability in GSTR 1. Correct it immediately in the next return period.

3) Shift from quarterly GSTR 1 to monthly. Despite many new changes, there is no resolution to this issue. Now ITC reflects only when GSTR 1 is filed. But small taxpayers are allowed to file the GSTR 1 quarterly.

The input tax credit on their bills will reflect only after a quarter. But in reality, they have already paid the tax at the time of filing GSTR 3b. But there is no resolution to this issue.

Many large companies avoid making purchases from small suppliers. As they will have to wait for a quarter for Input Tax Credit, they are shifting to large suppliers.

Thus it is advisable to shift your GSTR 1 frequency from quarterly to monthly. This will increase the compliance burden. But it can save you from losing clients. 

Also, you may get some new clients as they will get a surety of Input Tax Credit within the same month. It can save them the cost of working capital.

Gradually most of the buyers will try to shift to the monthly return filers. In the long run, the monthly GSTR 1 files will gain an advantage.

Conclusion

A correct and timely filing of GSTR 3b is the backbone of a healthy business. Make sure to file it on time and with the correct details.

I hope the tips we discussed above will help you.

A monthly reconciliation can save many hours of resources. It can also save you from the future consequences. GSTN is changing very fast.

In the future, GSTR 1 and 3b will get linked to each other. The auto-populated data in GSTR 3b is editable but in the future, it may be frozen, GSTIN may ask taxpayers to bring any change via amendment of GSTR1 only.

Any mismatch in GSTR 1 and GSTR 3b may be disallowed in the future. Even if it is not completely disallowed, it may result in liability on the part of the taxpayer.

Reconciliation with GSTR 1 and with the auto-populated data in GSTR 2b can save you. You can use good accounting software like ProfitBooks for complete error-free filing. ProfitBooks is free to use. It will help you put a system in place to ensure that there is no filing without a reconciliation.

Also Read:-

How To Generate E way Bill on GST Portal – 5 Easy Steps

How to Make Your Business GST Compliant?

GST State Codes in India

List Of Documents Required For GST Registration

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GST State Codes List in India

The GST taxpayer gets the GST number after registering with GST. The first 2 digits in the registration number are the state code. The GST State Codes are used to identify the state of the GST registered entity. These codes are also useful while raising invoices in GST and filing GST returns.

The Tax-payers who have business across multiple states will have multiple GSTN. It will be easy to identify the location with the state code even though the name of the taxpayer remains the same. In order to avoid mistakes in the wrong GSTN mention, it’s an easy process to verify the state code apart from the PAN followed by the state codes.

Here is a list of all the GST State Codes:

* The State code for erstwhile UT of Daman and Diu was 25, prior to 26th January 2020.

You can also read in detail about the GST Registration Process.

The post GST State codes in India appeared first on ProfitBooks.net.

Here is some good news for tax-paying businesses in India.

28th GST council meet held on 21st of July 2018 has introduced a simple GST return filing system for the taxpayers. The government has introduced Sahaj and Sugam forms for filing GST returns.

In this article, we’ve explained how these new forms will simplify the return filing process, new due dates, changes in existing GST forms and the proposed format of Sahaj and Sugam forms.

Over 93% of the taxpayers have a turnover of less than Rs 5 Cr and these taxpayers would benefit substantially from the simplification measures proposed improving their ease of doing business.

Even the large taxpayers would find the design of new return forms quite user-friendly.

Benefits For A Small Taxpayer

Taxpayers who have a turnover upto Rs. 5 Cr. in the last financial year shall be considered a small taxpayer. These small taxpayers shall have the facility to file quarterly return with monthly payment of taxes on the self-declaration basis.

However, the facility would be optional and small taxpayer can also file the monthly return like a large taxpayer.

Option for filing monthly or quarterly return shall be selected by the small taxpayers at the beginning of the year and generally thereafter they would continue to file the return during the year as per the option selected.

During the course of the year option to change from monthly to quarterly or vice-versa shall be allowed only once and at the beginning of any quarter.

Here is how small taxpayers can benefit from Sahaj or Sugam forms.

An option of filing a quarterly return

Small taxpayers having turnover upto Rs. 5 Cr. would have the option to file one of three forms, namely – Quarterly return, Sahaj or Sugam.

Quarterly return shall be akin to the monthly except that it has been simplified and shall not have the compliance requirement in relation to –
(i) Missing and pending invoices as small taxpayers do not use these procedures in their inventory management.
(ii) Supplies such as non-GST supply, exempted supply etc as they do not create any liability.
(iii) The details of input tax credit on capital goods credit shall also not be required to be filled.
This information shall be required to be filled in the Annual Return. Small taxpayers who would like to facility of missing and pending invoice may file the monthly return.

Sahaj and Sugam Returns

Small taxpayers often have purchases only from the domestic market and sales in the domestic market i.e B2B purchases locally and the supplies either as B2C or B2B+B2C.

They constitute a very large part of the tax base and therefore two simplified quarterly returns are proposed for them respectively. They have been named as “Sahaj”  (only B2C outward supplies) and “Sugam” (both B2B and B2C outward supplies).

Uploading of invoices

The recipients from these small taxpayers would need uploaded invoice for availing input tax credit and therefore the small taxpayers would be given facility to continuously upload invoices in the normal course.

The invoices uploaded by 10th of the following month would be available as input tax credit to the recipient in the next month.

Payment declaration form for payment of monthly taxes

These small taxpayers would continue to pay taxes on the monthly basis and in the first and second month of every quarter, they would use a payment declaration form to make the payment.

In the payment declaration form, self-assessed liability and input tax credit on self-declared basis shall be declared. To assist in tax payment and availing input tax credit, necessary liability arising out of uploaded invoices of outward liability and input tax credit flowing from viewing facility would be shown to the taxpayer.

The payment declaration form shall only allow full payment of the liability arising out of uploaded invoices. Late payment of tax liability including that in the first and second month of the quarter shall attract interest liability.

For The Larger Taxpayer – ‘UPLOAD – LOCK – PAY’ Return

All the large taxpayer but excluding small taxpayers, composition dealer, Input Service Distributor (ISD), Non-resident registered person, persons liable to deduct tax at source under section 51 of CGST Act, 2017, persons liable to collect tax at source under section 52 of CGST Act, 2017 are required to file monthly return within 20th of next month.

Large taxpayer means a payer having an annual turnover of over Rs.5cr in the last financial year.

Return format

This return will consist of two main tables. One table for reporting outward supplies and other for availing the input tax credit. The supplier can upload the invoices on the continuous basis and it can be reviewed and locked by the recipient/buyer for availing the input tax credit.

Continuous uploading and viewing

There would be the facility for continuous uploading of invoices by the supplier anytime during the month and such uploaded invoice shall be continuously visible to the recipient.

Only uploaded invoice would be a valid document for availing input tax credit.

Invoices uploaded by the supplier by 10th of succeeding month shall be auto-populated in the liability table of the main return of the supplier. The screen where it shall be visible to the recipient is hereafter called “viewing facility” (shown as “inward annexure” in the return document).

After the due date for the filing of return is over, the recipient shall also be able to see the return filing status of the supplier and thus be aware whether the tax liability on purchases made by him has been discharged by the supplier or not.

The due date for uploading the invoices

The invoices uploaded by the supplier till the 10th of the next month will get auto-populated in the return of the recipient from 11th of next month, which will be available as input tax credit to the recipient. Therefore, after the 11th of the next month, the recipient shall be able to accept, reject or keep pending a particular invoice but the maximum limit of eligible input tax credit will be based on the invoices uploaded by the supplier upto 10th of the subsequent month.
Example – For example, if invoice no. 1 of April is uploaded on 8th of May and invoice no. 2 of April is uploaded on 15th of May by the supplier, the recipient shall be able to avail input tax credit for invoice no. 1 with the return of April filed on say 20th May and for invoice no. 2 he shall be able to avail input tax credit with the return filed for the month of May, filed on say 20th of June. But both the invoices would be accounted towards the liability payable by the supplier in his return of the tax period of April.

Important Changes In New GST Return Format

Here is how some important cases will be handled in new proposed changes:

• Invoice uploaded but return not filed
  In cases where no return is filed after uploading of the invoices by the supplier, it would be treated as the self-admitted liability by the supplier and recovery proceedings will be initiated against the supplier.
• Missing invoices
  Invoices or debit notes which have not been uploaded by the supplier and on which recipient has availed input tax credit are called “missing invoices”.Where credit is availed on missing invoices by the recipient and such missing invoices are not uploaded by the supplier within the prescribed time period, input tax credit availed in relation to such invoices or debit notes will be recovered from the recipient.For example, purchase invoices received by the recipient in April on which input tax credit has been availed but not uploaded by the supplier shall be reported by the recipient not later than the return of June filed in July.
• Payment of tax
  Liability declared in the return shall be discharged in full at the time of filing of the return by the supplier as is being done at present in the present return FORM GSTR 3B.
• Locking of invoices
  Locking of invoices means a handshake between the recipient and supplier indicating acceptance of entering into the transaction reported in the invoice. Facility for locking of invoice by the recipient is available before the filing of the return by him.However, it may not be possible to lock individual invoices where the number of invoices is large and in such situation deemed locking of invoices shall be presumed on the uploaded invoices which are either not rejected or kept pending by the recipient. On the filing of the return by the recipient, all invoices shall be deemed to be accepted except invoices kept pending or rejected.
• Pending invoices
  Pending invoices mean such invoices which have been uploaded by the supplier but for which one of the three situations exist –
  1) The supply has not been received by the recipient,
  2) Where the recipient is of the view that the invoice needs amendment,
  3) Where the recipient is not able to decide whether to take input tax credit for the time being.
  Pending invoices shall be reported by the recipient and no input tax credit shall be availed by the recipient on such pending invoices.
• Deemed locking of invoices
  Invoices which have been uploaded by the supplier and made available in the viewing facility to the recipient but have not been rejected or have not been kept pending by the recipient shall be deemed to be locked after the return for the relevant tax period has been filed by the recipient.
• Unlocking of the invoices
  It may also be noted that the invoices on which credit has been availed by the recipient (i.e. locked invoices) will not be allowed to be amended by the supplier and in order to amend the reported particular of such invoices, a credit or a debit note will have to be issued by the supplier. A wrongly locked invoice shall be unlocked online by the recipient himself subject to reversal of the input tax credit by him and online confirmation thereof.

Amendment return

To address the problem of human error i.e. wrong entries being made in the return, there would be a facility for the filing of amendment return.
Amendment return is different than a regular return. There would be a facility to file two amendment returns for each tax period.

Changes In Nil return

The government has further simplified the way Nil return is filed. Now the taxpayer can file the nil return by sending SMS.

Conclusion

Its good to see that the Government of India is taking the right steps to simplify GST return filing process and reduce compliance burden from business owners.

At ProfitBooks, we build simple software to systemise business processes. If you are a business owner and want to systemise your business operations, please check ProfitBooks products.

Also Read:

Guide on GST Returns
Tax Saving Tips For Business Owners
How To Create GST Invoices
Best GST Billing Software

The post Sahaj and Sugam – Simple Returns under GST appeared first on ProfitBooks.net.

The GST registration process is a long one that involves business-related documents. For registration, you need to submit different types of documents according to the type of company registration.

Find out the documents required for GST registration for Sole Proprietorship or Individual, Partnership or LLP, Private Limited or Public limited or One Person Company, HUF and Society or Trust or Club.

Documents required for Sole Proprietorship / Individual

• PAN card,
• Aadhaar Card,
• Passport size photo of the sole proprietor.
• Registered Office Address proof:-
  –Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
  –Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.
• Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement

 Documents required for Partnership deed/LLP Agreement

• Documents of Partners:- PAN Card, Passport size photograph and Address Proof of Partners,
• Partnership Deed,
• PAN card of Firm,
• Registered Office Address proof:-
  –Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
  –Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.
• Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement
• Additional documents in case of LLP– Copy of Board Resolution, Registration Certificate of the LLP
  Proof of appointment of authorized signatory (Digital Signature Certificate of any one of the designated partner)

Documents required for Private Limited / Public Limited / One Person Company (Indian or Foreign)

• PAN Card of the company
• Registration Certificate of the Company (Certification of incorporation) given by MCA
• Memorandum of Association (MOA) /Articles of Association (AOA)
• PAN card, Passport size Photograph and Aadhaar card of all Directors,
• PAN card and Aadhaar card of the authorized signatory.
• Board Resolution or any other proof of appointing authorized signatory
• Registered Office Address proof:-
  –Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
  –Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.
• Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement

Documents required for HUF

• PAN card of HUF
• PAN Card and Aadhaar card of Karta
• Passport size Photograph of Owner
• Registered Office Address proof:-
  –Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
  –Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.
• Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement

Documents required for Society or Trust or Club

• Pan Card of society/Trust/Club
• Registration Certificate of society or club
• Passport size Photograph and PAN Card of Promoter/ Partners
• PAN card and Aadhaar card of the authorized signatory.
• Board Resolution or any other proof of appointing authorized signatory
• Registered Office Address proof:-
  –Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
  –Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.
• Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement

Process of GST Registration

You can perform the process of registration online through a portal maintained by Central Govt. of India. According to GSTN, the registration process is as follows:

• The applicant will need to submit his PAN, mobile number, and email address in part A of FORM GST REG-01 on the GSTN portal or through the facilitation centre (notified by the board or commissioner).
• The PAN is verified in this portal. Email addresses and mobile numbers are verified with a one-time password (OTP). Once the verification is complete the applicant will receive an application reference (ARN) number on the registered mobile number and via email. An acknowledgment is issued to the applicant in FORM GST REG-02
• The applicant needs to fill part-B of FORM GST REG-01 and specify the application reference number. After attaching the required documents, you can submit the form.
• If additional information is required, FORM GST REG-03 is issued. The applicant needs to respond in FORM GST REG-04 with the required information within 7 working days from the date of receipt of FORM GST REG-03.
• If you have provided all the required information via FORM GST REG-01 or FORM GST REG-04, the registration certificate in FORM GST REG-06 for the principal place of business as well as for every additional place of business will be issued to the applicant. Suppose the person has multiple business verticals within a state he can file a separate application for the registration in FORM GST REG-01 for each business verticals.If the details submitted are not satisfactory, the registration application is rejected using FORM GST REG-05. The applicant who is required to deduct TDS or collect TCS shall submit an application in FORM GST REG-07 for registration. If he is no longer liable to deduct collect tax at source then the officer may cancel and communicate the cancel of registration.

It is important for businesses to register to get legal authorization for supplying any goods and services.

Common Questions around GST Registration

1) Whether the registration granted to any person is permanent?

Yes, the registration Certificate once granted is permanent unless surrendered, cancelled, suspended, or revoked.

2) Who is a casual taxable person?

A casual taxable person has been defined in Section 2(20) of the CGST Act, 2017. It means a person who occasionally undertakes transactions involving supply of Goods and/or services in taxable territory in the course or furtherance of business, where he has no fixed place of business.

3) Is the registration compulsory for the job worker?

No, the job worker is required to get himself registered only when complying with the terms of Section 22 and Section 25(3) of the CGST Act, 2017.

4) Who needs to register for GST?

As per Section 24 of the CGST Act, 2017, the following categories of persons shall be required to be registered compulsorily irrespective of the threshold limit.

• a person making any inter-state taxable supply.
• casual taxable persons
• a person who is required to pay tax under reverse charge
• a person required to pay tax under sec 9(5)
• non-resident taxable person
• a person who is required to deduct tax under section 51
• persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise
• input service distributor
• persons who supply goods and/or services other than branded services through electronic commerce operators.
• every electronic commerce operator
• an aggregator who supplies services under his brand name or his trade name and;
• such other person or class of persons as may be notified by the Central Government or State Government on the recommendations of the GST council.

5) What are the benefits of GST registration?

Registration under Goods And Services tax regime will confer the following advantages to the business:

• Legally recognized as a supplier of goods or services.
• Proper accounting of tax paid on the input goods or services that can be utilized for payment of GST due to the supply of goods or services or both by the business.
• Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.
• Getting eligible to avail of various other benefits and privileges under the GST laws.

6) What are the charges for GST registration?

There is no government fee applicable on GST registration. It’s free.

7) How much time does it take for GST registration?

It takes 1-2 days or a few hours if all documents are submitted with no errors.

8) Can I cancel my registration in the future?

Yes, you can cancel your registration if you are:

• Existing Taxpayer
• Migrated Taxpayer whose application for enrolment has been approved
• Migrated Taxpayer who has not filed any other form after the filing of the application for enrolment

Check out more FAQs On GST Registration

There are many aspects of this tax which people don’t concentrate on but they should. If you are having issues understanding and implementing the whole process, here’s an easy guide for you to know better. This complete guide will walk you through various subsets of this tax and how to implement it in your finance and accounting field.

Also Read
Best GST Billing Software
Gst return filling service
GSTR-3B
How to revise invoice GST

The post List Of Documents Required For GST Registration appeared first on ProfitBooks.net.

Ever since the GST law was implemented on 1^st July 2017, business owners repeatedly faced difficulties while filing GST returns.

GST was a huge change where all the indirect taxes were merged into one single law. So, initial hiccups were expected.

So keeping in mind all the problems businesses were facing, the government keeps extending the due dates or keeps on hold some of the return filling (FORM GSTR-2 and 3).

These are current due dates for filling GST returns. The dates given below are changed according to the government notifications. We’ll keep updating this page with changes.

Current due dates (2018)

Actual Due dates as mentioned in GST Law

Is Your Business GST Compliant?

If you are running a small business, you must comply with GST law. For example, you must create proper GST Bills, record purchases with correct GST details, file your returns on time and many more things.

A good GST Accounting Software can help you save time and comply better with GST.

Read More:

Type Of GST Returns
All about GSTR 1
How to file GSTR 3B
GST Billing Software

The post Current Due Dates For Filing GST Returns appeared first on ProfitBooks.net.

 

What is an E-Way Bill

E-Way Bill is the short form of Electronic Way Bill. It is a unique document/bill, which is electronically generated for the specific consignment/movement of goods from one place to another, either inter-state or intra-state and of value more than INR 50,000, required under the current GST regime.

As per the update on 23rd Mar 2018, Generation of the e-Way Bill has been made compulsory from 1^st April 2018. Inter-state implementation of e-way bill is notified to be implemented from 1st April 2018.

The implementation of Eway Bill to kick-off from 15th April 2018 in a phased manner. States to be divided into 4 lots to execute this phased rollout.

When e-Way Bill is generated, a unique e-Way Bill Number (EBN) is made available to the supplier, recipient and the transporter.

The e-Way Bill replaces the Way Bill, which was a physical document and existed during the VAT regime for the movement of goods.

Who should generate an e-Way Bill

Let’s try to understand who needs to generate an eway bill during transportation.

GST Registered Person:

(a) When a registered person causes the movement of goods/ consignment, either in the capacity of a consignee (i.e., buyer) or consignor (i.e., seller) in his/her vehicle or hired vehicle or railways or by air or by ship, then either the registered person or the recipient should generate the e-Way Bill in Form GST EWB 01 electronically on the common portal by furnishing information in Part B.

(b) When a registered person causes the movement of goods and hands these over to the transporter for transportation by road, but the e-Way Bill has not been generated, then it is the transporter who needs to generate the bill. The registered person will first furnish the information relating to the transporter in Part B of Form GST EWB. After which, the transporter will generate the e-Way Bill by the information furnished by the registered person through Part A of Form GST EQB 01.

Unregistered Person:

(a) When an unregistered person causes the movement of goods, through his/her conveyance or hired conveyance or using the services of a transporter, then the e-Way Bill needs to be generated either by the unregistered person or by the transporter, by completing Form GST EWB-01.

(b) When an unregistered person supplies the goods to a registered person AND the registered person is known to the unregistered person at the time of the start of the movement of goods, then it will be considered that the registered person is moving the consignment. In this case, the registered person or transporter shall complete the formalities of the e-Way Bill.

When Should E-Way Bill Be Issued

Ideally, e-Way Bill should be generated before the commencement of movement of goods above the value of INR 50,000 (either individual invoice or consolidated invoice of multiple consignments). The movement of goods will be either about a supply/ reasons other than supply (like return)/ inward supply from an unregistered person.

For purposes of an e-Way Bill, supply is considered either a payment in the course of business/ a payment which may not be in the course of business/ no consideration of payment (in the case of barter/ exchange).

GST E-Way Bill Format

Below is the image of the e-Way Bill to be electronically generated after completing the Form GST EWB-01.

The bill comprises of 2 parts – Part A and Part B.

Part A of the form is to collect the details of the consignment, usually about the invoice.

• GSTIN of Recipient:  The recipient of the goods needs to provide the GST Identification N
• Place of Delivery: The Pin Code of the place where goods are to be delivered needs to be filled in.
• Invoice or Challan Number: The Invoice or Challan number of the supplied goods, needs to be filled in.
• Value of Goods: The total consignment value of the goods.
• HSN Code: The HSN (Harmonized System of Nomenclature) code of the transported goods is required. If the turnover is up to INR 5 crores, then the first two digits need to be mentioned. For a turnover more than INR 5 crores, four digits of HSN code are required.
• Reason for Transportation: One needs to select the most appropriate option from the list of reasons which is pre-defined.
• Transport Document Number: One needs to enter the Goods Receipt Number/ Railway Receipt Number/ Airway Bill Number/ Bill of Loading Number.

In Part B of this form, one needs to fill in the vehicle number of the transported goods. The transporter will complete this information in the common portal.

How To Generate e-Way Bills

e-Way Bills are generated either via online e-way bill system or SMS. The bill needs to be generated before the start of the movement of goods about supply/ reasons other than supply/ inward supply from an unregistered person. [Supply being defined sale of goods and payment made/ branch transfer/ barter or exchange].

Here is a step by step guide to generate E-Way Bill Online or Via SMS (created by NIC).

The table below is aimed to provide a bird’s eye-view of ‘Who, When and How’ will generate the e-Way Bill and which part of the form needs to be completed:

Responsibilities Of The Transporter

Under GST regime, when goods are moved from one place to another, the transporter needs to ensure to carry an e-Way Bill. When a registered person causes the movement of goods and hands these over to the transporter for transportation by road, but the e-Way Bill has not been generated, then it is the transporter who needs to create the bill.

When an unregistered person causes the movement of goods, through his/her conveyance or hired vehicle or services of a transporter, then the e-Way Bill needs to be generated and can be done by the transporter.

In cases where there are multiple consignments, being sent through one conveyance, the transporter has the responsibility to ensure that the serial number of each individually generated e-way bill per each consignment is entered on the common platform and a consolidated e-Way Bill via the Form GST EWB 02 is created.

10 Frequently Asked Questions On E-Way Bill

1) In Which cases e-Way bill is not required?

The below are the cases when the generation of e-Way Bill is not a requirement:

1. When the value of the consignment of goods moved is less than INR 50,000 (however, there are certain goods for which the e-way bill is mandatory even though the value of the goods is less than Rs. 50,000. Examples of such goods are when there is an inter-state movement of goods by the Principal to Job-worker and when the Inter-State Transport of Handicraft goods by a dealer is exempted from GST registration);
2. When the conveyance used is a non-motor vehicle;
3. When goods are transported from port/ airport/ air cargo complex/ land customs station to Inland Container Depot or Container Freight Station for customs clearance;
4. Transport of certain goods.
5. If within the same state, the goods are transported for a distance less than 10 km, from the business place of the transporter to the business place of the consignee;
6. If within the same state, the goods are transported for a distance less than 10 km, from the business place of consignor to the business place of transporter for further transportation

2) What is the validity of an e-Way bill ?

The validity period of an e-way Bill starts from the time of creation of the e-Way Bill. For distance traveled less than 100km, the bill is valid for one day. For every 100km or after that, the bill is valid for one additional day.

Note: That the commissioner can provide an extension of the validity period for specific categories of goods.

3) Which documents are required to generate an e-Way Bill?

One requires the below documents to generate the e-Way Bill:

(i). The invoice/ Bill of Supply/ Delivery Challan of the goods consignment;

(ii). If roadways transport the goods, then the Transporter ID or Vehicle number;

(iii). If rail, air, or ship transport the goods, then one requires ID of the Transporter, Document Number of Transport, and Document Date.

4) What are the criteria for “Value of Consignment of Goods”?

The value of consignment of goods is as below:

(i). If the invoice value exceeds INR 50,000; or,

(ii). If the vehicle is carrying goods for multiple invoices whose combined invoice value exceeds INR 50,000.

If either of the above criteria is satisfied, then one needs to generate the e-Way Bill.

Note: Invoice Value means the total transaction value inclusive of taxes per invoice.

5) Is there any penalty if the transporter fails to generate an e-Way Bill?

If the supplier for some reason fails to create the e-Way Bill, then it is the responsibility of the transporter to obtain it. If the transporter fails to do same, then he/she may face the greater of a Rs. 10,000 fine or tax assumed to be avoided. He/she is further liable for the confiscation of goods and seizure of the vehicle.

6) What happens if multiple consignments are transported in one vehicle?

If multiple consignments are sent in the same conveyance, then the transporter needs to generate one consolidated e-Way Bill through the portal, which will have the serial numbers of each individually generated e-Way Bill per consignment. This situation is also known as ‘Transshipment’.

7) During Transit, what happens if goods are transferred from one vehicle to another vehicle?

When goods are transferred from one vehicle to another during transit, before the actual transfer, and before further movement takes place, the transporter will need to update the details of the vehicle in the e-Way Bill in the Form GST EWB 01, through the common portal.

Note: If goods are transported for a distance less than 10 km within the State or Union territory from the business place of the transporter finally to the business place of the consignee, then it is not mandatory to update the details of the vehicle in the e-Way Bill.

8) What happens if E-Way Bill is generated but goods are not transported?

In case the e-Way Bill is generated but the goods have not yet transported to the destination, then the bill needs to be canceled. It can either be canceled electronically via the GST website or through a GST Facilitation Centre within 24 hours of generation of the bill. If any officer has already verified the bill during transit, then it cannot be canceled.

9) What happens if recipient of goods does not communicate the acceptance or rejection within 72 hours?

The recipient of the goods needs to communicate the acceptance or rejection of the same within 72 hours of the details appearing on the website. If the recipient does not confirm his/ her acceptance or rejection, it is assumed that he/she has accepted the consignment, by default.

10) What if I want to cancel the e-way bill?

An e-Way Bill can be canceled via the GST website or via SMS within 24 hours of its generation. However, the bill cannot be canceled if an officer in transit has verified the same.

Final Thoughts

At ProfitBooks, we think that a GST invoice is good enough to go along with the goods during transportation. Government should either simplify the e-way bill generation process or just get rid of it completely. In any case, things are definitely going to get easier within few months.

Meanwhile, if you are a business owner, you should start creating your bills in GST compatible format using our GST billing software. You can try it free for 2 weeks, it takes just few minutes to signup.

The post All You Need To Know About E-Way Bills appeared first on ProfitBooks.net.

It is no news that the implementation of the GST (Goods and service tax) will pose some major advantages and a few disadvantages to the services industry.

Many service businesses will face a lot of changes over the years as they try to conform to the introduction of this new taxation system and we can be sure that many of them are happy because of the changes. You can trust that this new taxation system will also affect the people in general and not only business owners.

Even so, the joy is that it is not all bad. We can gladly look forward to the positive and especially the people in the service business sector is keen on how things will turn out.

In this article, we’ll assess the GST impact on service sector – both positively and negatively. We’ll also see what you need to know if you a service provider.

Positive Effects Of GST On Service Sector

No double taxation: This is one thing that was affecting many service providers. In the previous system of taxation, the works contract was complex, and this took a toll on many people. Here, the transfer of goods is a part of the service contract. This means that every invoice has the value of the goods used as well as the services supplied. These two attract a tax rate of 70% each bringing the total to 140% which is very high. With the implementation of GST, these two are considered to be one and thus taxed as ‘supply of service.’

More Clarity For Software Industry: For companies like ProfitBooks, that sell online software, its was not clear whether to apply VAT or Service Tax on the product. In GST regime, there is a clear distinction between products and services which will remove the confusion for service industry.

Repairs and maintenance: The service providers that provide repair and maintenance services to companies will be able to claim both the credit of input and credit of input services as provided by the GST system. The current regime only offers the credit of input services which is a bit limiting. Now that they can claim both of the credit of input and credit of input services, they can offer their repair and maintenance services at lower prices and thereby attracting more clients.

Access to inputs held in stock: The service providers will access CENVAT credit of input that is held in stocks. This is best applicable when a person is moving from one category of taxation to the next like the exemption category to the taxable one.

Check out this simple example – Earlier, service providers used to charge Service Tax to the clients and used to pay VAT on the goods purchased, like computers. it was not possible to take set off VAT against Service Tax. But in GST regime, you pay GST on both sales and purchases and hence its easy to claim input tax credit on that.

Fewer costs to service providers: In the previous system of taxation, the credit of VAT and CST that were paid to the input were billed to the service provider. Luckily, with the GST system, the CENVAT credit of SGST/CGST, as well as the IGST that are to be paid on inputs and capital goods are all taken care of under the GST system.  This is a relief to the service provider.

The cost of inputs is likely to drop: Now that the multiple taxation systems are abolished, the cost of inputs will go down. Inputs taxations like VAT, Excise Duty, and the likes will no longer be an issue to deal with.

It will bring equality in all states: The previous taxation system did not cover Jammu and Kashmir. This presented a disadvantage to other places in India because taxation provisions did not cover these two places. However, GST now covers the whole land bringing all service sectors under the same taxation laws.

Negative Impacts Of GST On Service Sector

Other than the goods, there are also down sides to this system of taxation. These negatives include:

Lack of a centralized registration: With the previous taxation system, many service providers rejoiced over being able to register all their businesses in different areas from a central place. However, this privilege has been taken away. Now, they have to register their businesses in the respective state and pay the CGST tax.

Taxation for free services: If a business is going to supply services for free, they will still get taxed for it. Every supply that is made without consideration is taxed. This means you have to prepare yourself before you offer any free services.

Increased cost of service to end consumer: Because the rate of taxation will go higher in the GST system, the end consumer will also feel a pinch of extra expenditure. The taxation is between 18% and 20%. Because this rate is high, the cost of service will be higher.

Lack of a centralized system of accounting: Every business in every state has to have their accounting records because there is no centralized registration of businesses. Every business in every state is financially accountable to that state for taxation. This means that the accounts of the business will have to be separate.

Burdensome filling of returns: As a business owner, you will have to file returns for all the businesses in all the different states separately. This is also because of decentralized registration.  This can prove to be burdensome and tiresome as well. You are needed to file as many as 37 returns in just a year.

The burden of public education: The business owner is charged with the responsibility of educating the masses on the benefits of this GST system. Failure of which may lead to unprecedented events.

What You Can Do To Comply With the GST

As a service provider who is subject to the GST taxation system, it is very important that you ensure your business complies with the provisions of GST. You can do the following to ensure that you comply with the regulations of GST

File your returns under GST: We all know that all businesses need to file their returns. There is no exemption to this. When there has not been much activity with the business, you can file nil returns. Failure to do comply will attract a penalty. You have to give detailed information on all activities of the business.

Learn more about GST Returns.

Vendor ratings: The government has a mechanism in place that rates vendors based on how timely they are with their returns, their payments and so on. People who look forward to working with you will be rating you on the basis of these scores.

Learn about GST compliance rating.

Know your SAC: In GST regime, you need to mention ‘Service Accounting Code (SAC)’ for every service you sell. So, its important for you to know the correct SAC of the service you are selling.

Learn more about SAC and HSN codes.

Raising invoices: Proper GST compliant invoices have to be raised under the GST system. Invoices issued to the GST showing compliance have specific fields that need to be filled before issuance. The issuance is done via a GST portal and information on both the buyer and seller are captured.

For example, you need to mention your GSTN, customer’s GSTN, SAC on invoice.

Learn more about Creating GST Invoice.

Know the applicable taxes: It is important to know that the GST system is made of two components and that is the CGST and the SGST. The taxes subsumed at the CGST include central excise duty, the special additional duty of customs, service tax, additional excise duty, and additional customs duty.

The SGST component is made by subsuming the Purchase tax, luxury tax, entertainment tax, VAT, Octroi and entry tax, and others.

If you are selling within your state, you need to apply SGST & CGST and if you are selling outside of your state, you must apply IGST.

Use a good GST accounting software: This software will be your best friend as it will help you with filing your returns more easily and in a faster, error free way. This software will alert you to any discrepancies that there may be and you can get to it before any damage is done.

ProfitBooks is one of the popular GST softwares in India. It will help you to create GST invoices, manage inventory and even file GST returns directly from the software.

Final Thoughts

By subsuming all these to provide the country with a single taxation level, we can say it is a great move that will propel the economy even further. In as much as there will be some challenges, it is a great thing to have a single taxation system for the service providers.

For service industry, GST system has definitely increased the compliance burden. GST implementation is bound to face hiccups during initial days but things will be much smoother once the issues are addressed.

What do you think? Please share your thoughts in comments.

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