Indian Tax Solution
As we prepare to enter the next phase of GST compliance, e-way bills are set to take centre stage. With the two systems, GST return filings and e-way bills, likely to see integration and confluence, the challenges are important to make sure that businesses comply with them.
GSTN along with GST Council is steadily paving the way for a smooth transition into the GST 2.0 - the newly proposed GST Return filing system to be introduced on the GST portal. While the full-fledged implementation is starting from 1st July 2019, the pilot run is set to begin in April 2019. While the e-way bill site has seen significant developments in terms of the user interface since its inception, the GST authority has noticed that it is a right time to start integrating the same with GST portal.
One of its plan of actions is to disallow taxpayers from using the e-way bill site from generating e-way bills when they default in filing of GST Returns for two periods consecutively. This would apply when either of GSTR-3B or GSTR-4, whichever applicable, is not filed. It has been observed that most of the taxpayers generating e-way bills belong to the class of taxpayers contributing the most to the GST collections.
Further, sufficient time has lapsed in making sufficient e-way bill data available, which can now be analysed and gaps can be identified. This change will act as an important tool to locate defaulting taxpayers to fix GST revenue collections. The effective date to implement the rule is still under wraps and currently, the validation on the portal is being worked on.
Another plan of action which has just seen a start is the invoice data transfer from the e-way bill portal to the GST portal for filing of GSTR-1. This move meets a two-fold objective. The most evident one is to make the users feel accommodative of the ease in data-handling and achieving accuracy. The second objective is to allow real-time monitoring of the transactions to keep an eye on the cases of tax evasion.
The facility for importing e-way bill data for preparing GSTR-1 is already up and running on the GST portal login. It allows importing only those invoices against which e-way bills were generated during the tax period. This serves as an alternative mode of data ingestion apart from the existing methods like excel, JSON or API Integration. However, a taxpayer may still have to separately import the details of the invoices that are not subject to e-way bill rules. The integration works on the basis of a proper declaration of GST Identification number (GSTIN) while generating e-way bills.
It is a noble idea to eliminate the need for multiple feeds of the same invoice data by a taxpayer from the ERP or the accountant's system onto the GST portal and e-way bill portal. It is a critical regulatory checkpoint to ensure the right amount of ITC claims by businesses through automation.
While these actions point towards the long-term goal of using technology to boost tax compliance, these are most likely to continue under the newly proposed GST Return filing system with few tweaks to fit into the system.
The new system proposes an automated intake of sales invoices on a real-time basis, it also allows the buyer to accept or reject these online, and facilitates seamless single return filing (MAIN Return) for the month. Buyers can also keep such invoices on hold for claiming the Input Tax Credit (ITC) in the following month. His actions will be visible to the seller too, thus enabling lesser turnaround time to file GST Returns.
Small taxpayers having less turnover have got multiple options to submit their quarterly returns - SAHAJ or SUGAM or a more elaborate version of the QUARTERLY return. Likewise, the composition dealers have to continue filing GSTR-4 with the frequency to file being changed now to yearly instead of quarterly.
The crucial aim of building the GST system is to allow a free and transparent flow of credit for taxpayers. The new system looks up to accomplish this. Despite the propositions, there will likely be a few hardships. The input claimed on the missing invoices by the recipient can be filed by the seller within next two tax periods from the input claimed by the recipient. However, if the same is not filed by the supplier, the input claimed by the recipient shall be ultimately reversed with interest and penalty.
Though, taxpayers will continue to face the risk due to the default of supplier when an invoice is not uploaded and returns are not filed timely. Recourse to a genuine buyer is still not available. With the eco-system will continue to evolve and compliance will take centre stage for those who want to grow their business. These validations point out that the authorities are chalking out a definitive plan for making way to a smooth implementation of GST 2.0, its on ground implementation will be key.
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