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E-Invoicing Under GST

editor — Fri, 12 Apr 2024 11:41:19 +0000

E-invoicing within the GST framework refers to the electronic authentication of invoices as outlined by GST regulations. It’s akin to how GST-registered businesses utilize e-way bills for transporting goods. Likewise, specific GST-registered entities are required to produce e-invoices for their Business-to-Business (B2B) transactions.

What is e-invoicing under GST?

E-invoicing, or electronic invoicing, refers to a system where B2B invoices and certain other documents are electronically authenticated by GSTN for further use on the common GST portal.
The GST Council decided to implement e-invoicing in its 35th meeting, initially covering specific categories of mostly large enterprises, which later expanded to include mid-sized and small businesses.

Who must generate e-invoice and its Applicability?

E-invoicing applies based on turnover criteria or e-invoice limits set by phases.
Taxpayers exceeding specified turnover limits in any financial year from 2017-18 to 2021-22 must comply with e-invoicing from FY 2022-23 onwards.
Certain notified businesses are exempt from e-invoicing, such as insurers, banking companies, and others as listed by CBIC notifications.

Transactions and documents criteria

Systems before & after e-invoicing

Time limit to generate e-Invoice

Process of getting an e-invoice

Benefits of e-Invoicing to businesses

How can e-invoicing curb tax evasion?

What are the mandatory fields of an e-invoice?

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Approval of outstanding refunds must be completed by April 30, Income Tax Department.

editor — Wed, 10 Apr 2024 04:45:35 +0000

The Income Tax Department has announced a positive development for individuals awaiting their income tax refunds. They have set a firm deadline of April 30 for the approval of all pending refunds.

Since the opening of the portal for the Assessment Year 2024-25 on April 1, there has been considerable activity, with over 46,000 income tax returns filed within the initial five days. Out of these, close to 3,000 returns have already undergone processing.

The Department has devised an interim action plan for the current fiscal year, outlining specific timelines for addressing various taxpayer-related matters. Immediate attention has been directed towards the approval of pending refunds, particularly those withheld under section 241A due to potential adverse effects on revenue, following the completion of scrutiny assessments and necessary orders. Despite the issuance of refunds exceeding ₹3.36 lakh crore in the fiscal year 2023-24, complaints persist regarding pending refunds from previous fiscal years.

Officials emphasize the importance of approving all pending refunds related to e-returns filed on the Income Tax Business Application (ITBA) for all assessment years by April 30. Additionally, a deadline of June 30 has been set for resolving penalties in at least half of the cases that will become time-barred by March 31, 2025.

Furthermore, attention has been drawn to cases involving Tax Deducted at Source (TDS), with a one-month timeframe provided for disposing of all pending applications as of April 1, 2024, for NIL or lower TDS/TCS. Additionally, orders are expected to be issued by June 30 for cases where TDS surveys were conducted up to March 31, 2024.

Source: https://www.thehindubusinessline.com/economy/it-department-sets-april-30-as-deadline-for-approval-of-pending-refunds/article68042765.ece

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GSTN Issues Important Advisory Regarding Reset and Re-filing of GSTR-3B for Certain Taxpayers

editor — Tue, 09 Apr 2024 12:06:19 +0000

The GSTN has released an important advisory, numbered 629 and dated April 9, 2024, regarding the reset and re-filing of GSTR-3B for specific taxpayers.

Referring to the option for re-filing GSTR-3B for certain taxpayers, it was observed that discrepancies existed between the saved data in the GST system and the data actually filed, particularly concerning ITC availment and tax liabilities. After thorough examination and discussion by the Grievance Redressal Committee of the GST Council, it was decided to reset these returns, providing affected taxpayers with an opportunity to rectify the discrepancies.

As a result, only the affected taxpayers have been notified via their registered email addresses, and the affected returns are accessible on their respective dashboards for re-filing with accurate data. Those who have received this communication are requested to visit their dashboard and re-submit their GSTR-3B within 15 days.

In case of any difficulty in re-filing, taxpayers are advised to contact their jurisdictional tax officer or raise a ticket on the GST grievance redressal portal.

We deeply regret any inconvenience caused to taxpayers.

The complete advisory can be found at: Link to Advisory

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Collaborative Audits by Central and State GST Authorities Targeting Businesses

editor — Tue, 09 Apr 2024 06:48:00 +0000

Beginning this fiscal year, there will be a collaborative effort between Central and State Goods and Services Tax (GST) authorities to conduct audits within the indirect tax framework.

This joint approach is expected to bring significant advantages to taxpayers by eliminating repetitive notifications and inquiries. Current industry data suggests that around 11,000 cases are either duplicated or entangled in legal disputes due to investigations by both Central and State agencies. Various Central GST zones have issued internal communications instructing officials to collaborate with their state counterparts on audits to ensure better coordination, as per sources.

The concept of conducting audits collaboratively was proposed during a national coordination meeting last month to streamline tax enforcement processes. The directives indicate that Central GST officers should also participate in audits conducted by State GST teams to improve SGST officers’ audit capabilities and facilitate the exchange of crucial compliance information. To support these joint audit efforts, the Central Board of Indirect Taxes and Customs (CBIC) has instructed each zone to devise a specific framework.

The responsibility for implementation, delegated to zonal heads, aims to optimize time and resources. Experts in the industry believe this initiative will enhance the fairness and efficiency of the audit process, providing a more comprehensive examination that benefits both tax authorities and taxpayers. It will help in avoiding redundant procedures and shield taxpayers from undergoing multiple audits for the same issues.

Furthermore, the CBIC has directed its officers to halt investigations into offenses already under scrutiny by state GST officials or for which notifications have been issued.

Source: https://economictimes.indiatimes.com/news/company/corporate-trends/central-state-gst-officials-to-conduct-joint-audits-of-firms/articleshow/109143298.cms?from=mdr

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Mandatory E-Invoicing for Businesses with Turnover above INR 5 Crores

editor — Thu, 04 Apr 2024 05:17:18 +0000

The GSTN, in its recent Advisory No. 628 dated April 3, 2024, has made e-Invoicing mandatory for businesses with a turnover exceeding INR 5 crores starting from April 1, 2024.

If your turnover surpasses INR 5 crores in the fiscal year 2023-2024, it is imperative to commence e-Invoicing from the subsequent financial year, commencing April 1, 2024.

Businesses meeting the notification criteria yet not enabled on the portal can self-enable for e-Invoicing by accessing https://einvoice.gst.gov.in. They can report through any of the 4 new Invoice Registration Portals (IRPs), ranging from e-Invoice IRP 3 to e-Invoice IRP 6.

For further details, please refer to the Advisory at: Advisory No. 628

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Form 15CA & 15CB: Key Components and Requirements Explained

editor — Sat, 30 Mar 2024 12:01:06 +0000

In today’s globalized economy, where cross-border transactions are commonplace, compliance with tax regulations is critical for both governments and businesses. Form 15CA and 15CB are essential tools introduced by the Indian government to streamline the process of remitting money overseas and ensure adherence to tax laws concerning international transactions.

Globalization and International Transactions: The rise of globalization has led to a significant increase in international trade, investments, and cross-border transactions. Businesses are expanding globally to access new markets and resources, leading to a surge in financial transactions across different jurisdictions.
Tax Compliance Challenges: With the growth of international transactions, ensuring tax compliance has become more challenging for tax authorities. Tax evasion and avoidance have become significant concerns, necessitating stricter regulatory measures.
Need for Regulatory Framework: Governments worldwide are introducing measures to enhance transparency and compliance in cross-border transactions to safeguard the integrity of the tax system and protect stakeholders' interests.
Introduction of Form 15CA and 15CB: Form 15CA and 15CB were introduced by the Indian Income Tax Department to monitor payments to non-residents. Form 15CA is a declaration of remitter, while Form 15CB is a certificate issued by a Chartered Accountant, ensuring compliance with Indian tax laws.
Key Objectives: These forms aim to enhance transparency, ensure tax compliance, and prevent tax evasion by providing details of cross-border transactions and certifying their compliance with relevant laws.
Impact on Globalization: While adding compliance requirements, Form 15CA and 15CB contribute to fostering a conducive environment for global trade by instilling confidence in the tax system and reducing risks associated with international transactions.

Form 15CA:

Overview:

Form 15CA is a declaration document required for remitting funds outside India. It is mandatory for individuals and businesses and can be conveniently filed online through the e-Filing portal.

Types:

Form 15CA has four sections based on the remittance amount and whether a certificate from a Chartered Accountant is obtained.

Form 15CB:

Overview:

Form 15CB is a declaration by a Chartered Accountant certifying compliance with the Income Tax Act, particularly when remittances exceed INR 5 lakh in a financial year.

Sections:

Form 15CB consists of six sections covering certification, remittance details, taxability, and accountant details.

Conclusion:

Navigating Form 15CA and 15CB requirements is essential for businesses and individuals involved in foreign transactions. Understanding these forms’ purpose and procedures ensures compliance with Indian tax regulations, fostering trust and efficiency in the global financial ecosystem.

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CBDT notifies changes in ITR Form V and Acknowledgement for AY 2024-25

editor — Thu, 28 Mar 2024 10:28:31 +0000

The CBDT, through Notification No. 37/2024 dated March 27, 2024, has introduced revisions to the ITR form V and Acknowledgement for Assessment Year 2024-25. These changes align with amendments made in the Income Tax Act, 1961, and the Income Tax Rules, 1962, following the Finance Act, 2023.

For further details, the full notification can be viewed at: https://www.nyca.in/wp-content/uploads/2024/03/CBDT_37-2024-27.3.2024.pdf

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ITC Transition not to be denied in case of Input Service Distributor (ISD)

editor — Sat, 23 Mar 2024 06:22:00 +0000

In the case of Siemens India Ltd. v. Union of India [Writ Petition No. 986 of 2019 dated February 09, 2024], the Hon’ble Bombay High Court, drawing upon sub-section (7) of Section 140 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”), postponed the proceedings for further examination. The court upheld the temporary halt granted to the Assessee, who is an Input Service Distributor (“ISD”), emphasizing that Input Tax Credit (ITC) legitimately available to the Assessee before the Appointed Day should not be forfeited due to the absence of an effective procedural mechanism for transferring ITC to the Electronic Credit Ledger for utilization. This situation could lead to the permanent loss of such ITC.

Facts of the case:

Siemens India Ltd. (“the Petitioner”), registered as an Input Service Distributor (ISD), initiated a writ petition regarding the transition of Input Tax Credit (ITC) available to them on July 1, 2017 (“the Appointed Day”). The petition contested the Revenue Department’s (“the Respondent”) refusal to allow transition or utilization of ITC in the Electronic Credit Ledger, citing a defective electronic mechanism.

These proceedings stemmed from a Supreme Court order dated March 24, 2023, in Union of India and Ors. v. Siemens Ltd. and Ors [SLP (Civil) Diary No. 7213 of 2023], directing a fresh consideration of the case, taking into account relevant contentions and legal provisions.

Issue:

Is an Input Service Distributor (ISD) entitled to transition ITC available on the Appointed Day?

Held:

The Bombay High Court, in Writ Petition 986 of 2019, made the following determinations:

The primary concern revolves around the legal ramifications of sub-section (1) and sub-section (7) of Section 140 of the CGST Act, outlining transitional arrangements for the carry-forward and utilization of ITC by ISDs.
Citing sub-section (7) of Section 140 of the CGST Act, the Court emphasized that legitimately available ITC with the Petitioner before the Appointed Day cannot be forfeited due to the absence of an effective procedural mechanism for transferring ITC to the Electronic Credit Ledger for utilization, thus preventing permanent loss of such ITC.
The Court suggested that a thorough examination of these issues by the GST Council would aid in the adjudication process.
It was decided that interim relief granted to the Petitioner would remain in force.
The case was adjourned until August 9, 2024.

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SEBI Amends Disclosure Requirements for FPIs with Majority Indian Equity AUM in Corporate Groups

editor — Fri, 22 Mar 2024 05:05:11 +0000

SEBI previously issued a circular on August 24, 2023, mandating extra disclosures for FPIs meeting specific criteria. However, FPIs meeting these criteria were exempted from additional disclosure requirements, provided they met certain conditions. SEBI has now revised this circular. FPIs holding over 50% of their Indian equity AUM within a corporate group are now exempt from additional disclosure obligations, contingent upon fulfilling specific conditions. The revised circular takes immediate effect.

Source: CIRCULAR NO. SEBI/HO/AFD/AFD-POD-2/P/CIR/2024/19

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Auditor’s Accountability for Audit Trail Reporting

editor — Thu, 21 Mar 2024 11:51:21 +0000

An essential aspect of maintaining financial transparency and accuracy is the implementation of an audit trail, which serves as a detailed record tracking the origin and modifications of financial transactions within a system. Auditors are obligated to report on the adequacy and effectiveness of these audit trails, ensuring their integrity and validity.

Significance of Audit Trails

Audit trails offer numerous benefits, including enhanced transparency, improved audit efficiency, fraud detection and prevention, and regulatory compliance across various industries.

Regulations Mandating Reporting on Audit Trails

Specific regulations, such as the Sarbanes-Oxley Act (SOX) and International Standards on Auditing (ISAs), require auditors to assess and report on audit trails. Industry-specific regulations also dictate additional requirements for audit trail functionality and reporting.

Auditor’s Assessment and Reporting on Audit Trails

Auditors assess various aspects of audit trails, including their existence, functionality, accessibility, retention, and management’s controls. These evaluations contribute to the overall assurance process and provide valuable insights into an entity’s internal controls over financial reporting.

Reporting Mechanisms for Auditors

Auditors report their findings on audit trails through mechanisms like auditor’s reports, management letters, or formal communication to regulatory bodies, depending on the specific situation and identified issues.

Conclusion

Reporting obligations on auditors regarding audit trails are crucial for ensuring the accuracy and reliability of financial information. As regulations evolve to emphasize data integrity, effective reporting by auditors on audit trails remains prominent, promoting transparency and trust in financial statements.

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