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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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Tax Liability cannot be imposed merely because the financial statement did not provide State-wise turnover

editor — Thu, 04 Apr 2024 10:14:35 +0000

The imposition of tax liability solely based on the absence of state-wise turnover information in financial statements has been contested in the legal realm. This matter was addressed by the Hon’ble Madras High Court in a recent case involving Tvl. Future General India Insurance Co. Ltd. versus Assistant Commissioner (State Tax) [WP No. 3534 OF 2024, dated February 16, 2024].

Facts:

Tvl. Future General India Insurance Co. Ltd. (“the Petitioner”) operated as a private general insurance firm, specializing in insurance services. On August 16, 2021, the Petitioner was served with an audit notice by the Assistant Commissioner (State Tax) (FAC) (“the Respondent”). In response, the Petitioner diligently furnished the necessary documents and addressed the discrepancies highlighted in the audit reports. Subsequently, after issuing both an intimation and a show cause notice (“the SCN”), the Competent Authority issued the assessment order on December 30, 2023 (“the Impugned Order”).

Within the Impugned Order, the issue of defect No. 10 arose, relating to variations in turnover between the Profit & Loss account and balance sheet, as opposed to the figures in GSTR-9. The Petitioner explained that these disparities stemmed from the inclusion of Pan-India operations in the financial statements, whereas GSTR-9 solely focused on turnover within Tamil Nadu. The Petitioner even provided a certificate from a Chartered Accountant, specifically outlining the turnover within Tamil Nadu, amounting to Rs. 80,89,05,068/-. However, despite this clarification and despite the Petitioner having already paid taxes on the stated turnover, the Respondent imposed State Goods and Services Tax (SGST) and Central Goods and Services Tax (CGST) at 18% each (36% combined) on the aforementioned turnover.

Dissatisfied with the assessment order, the Petitioner sought recourse by filing a writ petition before the Hon’ble High Court of Madras.

Top of Form

Issue:

The central question revolves around whether tax liability can be established solely due to the absence of state-wise turnover information in financial statements.

Held:

In its ruling on Writ Petition No. 3534 OF 2024, the Hon’ble Madras High Court made the following determinations:

The Court acknowledged the variation in turnover for entities operating across multiple states, emphasizing the importance of distinguishing total turnover from state-wise turnover.
It criticized the Competent Authority's decision to impose GST at a higher rate of 36% instead of the appropriate 18%, despite the Petitioner having already paid tax on the turnover in question.
The Impugned Order was deemed invalid and the case was remanded to the Respondent for reconsideration.
Furthermore, the Court directed the Respondent to afford the Petitioner a fair opportunity, including a personal hearing, and instructed issuance of a fresh assessment order within a maximum period of two months, in compliance with legal provisions.

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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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Investigation of Large Corporations and Multinational Companies under GST Requires ‘Formal Authorization’

editor — Tue, 02 Apr 2024 07:46:09 +0000

The Department of Revenue has issued directives to CGST officials regarding the initiation of investigations into cases involving prominent industrial entities and multinational corporations (MNCs). These guidelines aim to streamline procedures and ensure uniformity in enforcement activities while maintaining the ease of doing business.

These guidelines outline specific scenarios where written approval from the zonal Chief Commissioner is necessary before initiating an investigation or taking action. These include cases involving large corporates, major MNCs, matters already under consideration by the GST Council, or matters seeking to impose taxes or duties on a sector, commodity, or service for the first time under Central excise or GST.

The precise definition of ‘big industrial house’ and major MNCs under these guidelines remains unclear to tax experts. Additionally, the guidelines require CGST field formations to gather details on prevailing trade practices and transaction nature from stakeholders in such cases, ensuring sufficient justification for initiating investigations and actions.

This uniform procedure was introduced following discussions by the Central Board of Indirect Taxes and Customs (CBIC) on the necessity for standardized enforcement procedures by CGST field formations, particularly concerning regular taxpayers and their impact on the ease of doing business.

Furthermore, tax officials are instructed to confirm whether any ongoing inquiries relate to the same subject matter or taxpayer by another investigating office or tax administration. This information must be presented to the authority responsible for approving the investigation’s initiation.

Experts believe that the directive addresses industry concerns, emphasizing the importance of effective implementation to promote tax certainty and stability in the business environment.

Source: https://www.thehindu.com/business/Economy/now-gst-probe-into-big-corporates-major-mncs-needs-a-written-approval/article68013343.ece

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CBDT issues corrigendum to include sec. 43B(h) disallowance under clause 22 of Form 3CD

editor — Thu, 21 Mar 2024 07:32:17 +0000

The Central Board of Direct Taxes (CBDT) introduced amendments to Form 3CD through Notification No. 27/2024 /F. No. 370142/3/2024-TPL, dated 05-03-2024. These amendments primarily focused on enhancing disclosures related to certain provisions of the Income Tax Act.

Disclosure of Section 43B(h) Disallowance (Clause 26): The notification included a requirement for disclosure of disallowances under section 43B(h) within Clause 26 of Form 3CD. This amendment aimed to ensure transparency and comprehensive reporting of such disallowances in accordance with the Income Tax Act.
Amendment of Clause 22: Notably, Clause 22 of Form 3CD, which pertains to interest restrictions under the MSME (Micro, Small, and Medium Enterprises) Development Act, was not initially amended in the notification. However, subsequent revisions have now been made to Clause 22 to incorporate the disclosure of amounts disallowed under section 43B(h).

Source: https://www.nyca.in/wp-content/uploads/2024/03/notification-27-2024.pdf

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Extension of Peer Review Mandate for CA Firms in Phase II & III

editor — Mon, 18 Mar 2024 10:01:54 +0000

Revised Guidelines on ICAI Peer Review Mandate

The Institute of Chartered Accountants of India (ICAI) has extended the applicability of the Peer Review Mandate for Chartered Accountant (CA) firms covered under Phase II & III. This revision aims to ensure adherence to enhanced quality standards within the profession.

Understanding Peer Review:

Peer review involves the assessment of a professional’s work by another professional of similar standing. It encompasses the examination of systems and procedures implemented by the Practice Unit (PU) to ensure quality assurance, as per technical, ethical, and professional standards. However, it does not focus on identifying isolated engagement failures.

Applicability in India:

Since 2017, peer review has been mandatory for all practicing Chartered Accountants and firms in India. Newly constituted firms, operating for less than one year, can undergo peer review voluntarily if the member (proprietor/partner) possesses a minimum of five years of post-qualification experience with a full-time Certificate of Practice (COP).

Revised Applicability (Phase II & III):

In response to requests from Practice Units, ICAI has outlined the following extensions in the applicability of the Peer Review Mandate:

Phase II:

Practice Units intending to conduct statutory audits for unlisted public companies meeting specific criteria, such as high paid-up capital, turnover, or outstanding loans, now require a Peer Review Certificate.
Similarly, Practice Units offering attestation services and employing five or more partners must possess a Peer Review Certificate before undertaking statutory audits.
This mandate is effective from July 1, 2024, with a grace period until June 30, 2024.

Phase III:

Practice Units engaged in statutory audits for entities that raised substantial funds from public sources or financial institutions during the review period must obtain a Peer Review Certificate.
Additionally, Practice Units with four or more partners providing attestation services are required to hold a Peer Review Certificate before accepting statutory audit engagements.
This requirement has been in place since January 1, 2015.

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GSTN Issues Important Advisory on GSTR-1/IFF: Introduction of New Tables 14A and 15A

editor — Tue, 12 Mar 2024 10:36:12 +0000

An advisory, Advisory No. 627 dated March 12, 2024, has been issued by the GSTN regarding the introduction of new Tables 14A and 15A in GSTR-1/IFF.

According to Notification No. 26/2022 – Central Tax dated December 26, 2022, two new tables, Table 14A and Table 15A, have been introduced in GSTR-1 to capture the amendment details of supplies made through e-commerce operators (ECO) on which e-commerce operators are liable to collect tax under section 52 or liable to pay tax under section 9(5) of the CGST Act, 2017. These tables are now live on the GST common portal and will be available in GSTR-1/IFF from the February 2024 tax period onwards. These amendment tables are relevant for taxpayers who have reported the supplies in Table 14 or Table 15 in earlier tax periods.

Table 14A allows suppliers to amend the details of original supplies reported under sections 14(a) and 14(b) in earlier return periods, while Table 15A enables e-commerce operators to amend the details of original supplies reported under four sections in earlier return periods.

Key features of the new tables include auto-population of amended taxable values to GSTR-3B, auto-population of amended taxable values and tax liabilities to GSTR-3B, manual addition of e-invoices related to 9(5) supplies, and reporting of amendment of debit or credit notes related to services notified under section 9(5) in existing Table 9C of GSTR-1/IFF.

Additionally, a new table called “ECO – Documents (Amendment)” is being added in GSTR-2B for registered recipients who are making supplies through e-commerce operators. This table allows registered recipients to view the amended document details of supplies made through e-commerce operators on which the e-commerce operator is liable to pay tax under section 9(5) of the Act.

The values will be auto-populated from Table 15A to the new ECO – Documents table of GSTR-2B.

For further details, the advisory can be accessed at: https://www.gst.gov.in/newsandupdates/read/627

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