Many reforms have been made in the Goods and Services Tax (GST) return filing system. There is an addition of GST ANX-1 and GST ANX-2. A person used to fill the forms before the reforms, i.e., GST RET 1/RET-2/RET-3, are now supplemented with GST ANX-1 and GST ANX-2. These forms have similarities with GSTR-1 and GSTR-2A forms. These forms play a crucial role in the return filing process currently.

As you will continue reading this article, you will know more details about the annexure, GST ANX-1, and GST ANX-2.

Correct Reporting of Supplies: GST ANX-1 and GST ANX-2

There is a slight difference in mentioning the details of the supplies in both the annexure.

In GST ANX-1 format, the registered taxpayers have to mention all the outward supplies, all the inward supplies that come under reverse charge, and all the imports made at a certain tax period.

In the second annexure, GST ANX-2 format, the registered taxpayers have to give all the details of inward supplies done by the registered person, supplies obtained from an SEZ developer/unit, and imports.

As and when the registered taxpayer needs to upload all the documents related to supply in GST ANX-1, the taxpayer can see the same in GST ANX-2. The recipient has three options that can be taken against these documents. You can accept them, reject them, or you can keep the documents in the pending state, where the action can be taken at a later stage.

GST ANX-1 and GST ANX-2: Trial Rollout

These two annexure forms were rolled out on a trial basis earlier in 2020 and officially implemented by October 2020. Notwithstanding the annual turnover, all the registered taxpayers must fill both the annexure forms and correctly file the same. In April and May 2020, GST ANX-2 is available only in view format. The recipients are not allowed to take any action against this annexure.

Note: New return system is effective from October 2020, allowing both the taxpayers and the system to transform and get familiar with the new process. Due date is also given to make changes in return in FORM GSTR-3B and outward supply details in FORM GSTR-1 for September 2020.

The new GST return filing system facilitates the recipient to upload all the documents related to inward and outward supply details on a real-time basis. These documents can be uploaded in GST ANX-1 and are auto-populated in GST ANX-2.

The other important addition in the new GST return filing system is that you can match inward supply details from the invoices in GST ANX-2 by the purchase register. You can take appropriate actions accordingly. If all the details filled by the taxpayer got tally, then the recipient will be eligible to get an invoice, and this can be used to claim ITC.

If the details do not match, then the taxpayer has to reject the invoice. If it is not rejected, the recipient cannot claim ITC. The other option which a taxpayer is having is to mark an invoice as pending. In the later tax period, if the recipient wants, he can defer claiming ITC.

There is a cut-off date, which a taxpayer needs to keep in mind. Before the due date, the taxpayer can upload the invoices in GST ANX-1.

GST ANX-1 can be seen from two sides,

Supplier’s Side:

The taxpayers filing monthly returns have to submit the B2B invoices before or by the 10th of every month.

The taxpayers filing quarterly returns have to submit the B2B invoices previous to the 23rd of the successive month in the given quarter.

Recipient Side:

The taxpayers filing monthly returns can take action on the invoices uploaded in GST ANX-2 previous to the 20th of the following month.

The taxpayers filing quarterly returns can take action on the invoices uploaded in GST ANX-2 previous to the 25th of the month following the quarter.

There can be a mismatch in the invoices uploaded by the recipient and the supplier. The invoice uploaded by you might not be reflected in GST ANX-2 because it is not uploaded by the associated supplier in the corresponding GST ANX-1.

You may question that if a supplier does not upload or fails to upload the invoices before the due date, what will happen?

In this situation, the recipient has to alter the claim submitted in GST RET-1. The recipient has to pay the amount of tax after all the reversals.

There is a specific period for the suppliers to upload the invoices.

* Here T is the tax period.

T+2

For the taxpayers filing monthly returns, the time is two months after the tax period.

T+1

For the taxpayers filing quarterly returns, the time is one quarter after the tax period.

The recipient has to face difficulties in claiming ITC because of the delay on the supplier’s side, and the genuine recipients have to face problems.

The government is getting benefitted from the Provisional Credit Facility, which comes under the new GST system. Let us see how?

For recipients, the process for provisional credit is clumsy. These data help the government solve various cases in which genuine taxpayers cannot assure the suppliers for reporting or uploading invoices.

What the Government has to Say About the New GST System?

There will be ease for the recipient in claiming for ITC if everything is done properly from the supplier’s end. These all require the help and support of technology. The role of technology is to check if ITC is not blocked, it should quickly identify the mismatches, and if there is any problem, it should get resolved under the new GST return filing system.

Conclusion

To simplify the process of the new GST return system, you can use GST billing software. One such software is Imprezz. You no longer need to worry about the complex process. The software will simplify everything in just a few clicks.

We offer a 14 days free trial software program for small businesses in India. Login to get started!

GST, or Goods and Service Tax, has replaced various other forms of indirect taxes and has simplified India’s taxation system. If you are a trader, business person, or entity having a turnover more than the defined limit, you need to register for GST. If you are a taxable person, you cannot carry on your business activities without a GST registration.

What is GST Registration?

GST or Goods and Service Tax is an indirect tax levied on the supply of goods and services. It has replaced the old VAT and service tax system. If you want to avail all the GST benefits (Goods and Service Tax), you need to register for GST.

Any business whose turnover is more than Rs 40 lakhs (Rs 10 lakhs for hill state and North Eastern states) needs to register as a taxable person under the GST law.

Some businesses must register for GST. If the business carries without registering under the GST, it will be considered an offense, and heavy penalties will apply to that business. You will also not avail of any benefits mentioned under the GST law if you do not register.

How Much Time is Required in the GST Registration Process?

It usually takes 2-6 working days to complete the GST registration process.

Who Needs to Register for GST?

Following people needs to register for the GST –

• All individuals registered under the Pre-GST law, i.e., Excise, VAT, Service Tax, etc.)
• All the businesses whose turnover exceeds Rs 40 lakhs (Rs 10 lakhs for NE states, J&K, Himachal Pradesh, and Uttarakhand)
• A taxable person or a non-resident taxable person.
• Input service distributor or an agent of supplier.
• Individuals who use e-commerce aggregators to supply goods and services.
• Individuals who supply online information and access to databases from a place in India or outside India.

GST Registration Process

You can register online for the GST through the portal maintained by the Central Govt. of India. Here are the steps that you need to follow for the new GST registration –

• The applicant needs to log on to the GST registration portal,
• Go to the menu option. Select services and choose registration.
• To start the Part A of the GST registration process, click “New registration.”
• You will be redirected to a page where you need to select your status. Select whether you are a GST practitioner or a taxpayer.
• A form will appear on the screen where you need to fill in the details like the business’s legal name, mobile number, email id, PAN card details, etc.
• Submit the form. After successful submission, it will take you to a verification page. Enter OTP and click “Proceed.”
• After the verification process, you will receive a temporary reference number that you will need to use in Part-B of the registration process.
• Next, you need to enter the code (temporary number) and the Captcha code to start the Part-B process.
• It will take you to a new page, and you can find your previous application on a separate tab. You need to enter the details like business details, authorized sign, details of promoters or partners, authorized representative, location of the business (principal place), additional place (of the business operation), bank account details, state-specific information, and verification, and good and services. You need to enter all these details and then click on “Save & Continue” to proceed to the next step.
• In the next step, you need to upload a few documents and fill in the bank account details.
• Then, you need to put your digital signature to complete your application process. If you are a company or LLPs, you can use only Digital Sign certificates.
• After this, click on “Submit,” and all the details you mentioned will be updated and saved.
• It will take you to the 2nd step of verification, where you need to sign in from a pop-up window.
• Once you do, your application will be submitted, and a message/acknowledgment in the form of a reference number will be sent to your registered email and mobile number.

GST Registration – Required Documents 

You need the following documents for the GST registration –

• PAN card of the applicant or business.
• Proof of business registration. (If you are a sole proprietor, you don’t need to submit the document. If you have a partnership firm, you need to submit a partnership deed.)
• Address proof

You can submit any of the following as address proof for your GST registration process –

• The documents issued by the govt. for SEZs (Special Economic Zones)
• Rent agreement of the business space (if you use the rented property)
• The property tax receipt/ electricity bill/municipal khata copy, if you own the business property.
• Identity proof of the business owners, i.e., every partner needs to submit a copy of the aadhar card, PAN card, voter ID, ration card, etc.
• Bank account statement

You need to submit a canceled cheque or the scanned copy of the first page of the company’s account’s passbook.

Once you submit all the documents, a GST personnel in charge of the verification process will verify all the details you provided. After reviewing all the details, the person will either approve your application or reject your application based on incomplete information or an error in the application process. At this stage, if you want, you can validate the information until the clearance.

What If You Do Not Register or Pay GST?

If a taxable person does not register and pay GST, the person needs to pay a penalty of 10% of the taxable amount, subject to a minimum of Rs 10,000.

In case the person has registered and deliberately withholds the GST payment, the person needs to pay a penalty of 100% on the taxable amount.

Conclusion

There are various online GST billing software that can help you to simplify your GST filing process. One such software is Imprezz. With imprezz, you can create high-quality GST e-invoices in just a few clicks.

We offer 14 days of free GST billing software trail for small businesses in India. Login to get started!

The payment of Goods and Services Tax (GST) online has made the process of tax payment easy and transparent. As a registered taxpayer of GST, you have access to three electronic ledgers, i.e. electronic liability ledger, electronic cash ledger, and electronic credit ledger.

The first step for making the payment of GST is to generate an online GST payment challan. It is generated in the Form GST PMT – 06.

Why is Timely GST Payment so Important?

It is important to pay GST on time to avoid additional interest. According to Section 50 of the CGST Act, the interest on delayed payment will start accruing from the day the payment is due. This applies to both types of payments, skipped and not paid in full.

The interest on delayed payments is determined by the government and is not more than 18%.

If there is an undue or excess reduction in output tax liability or excess claim of ITC, the interest rate will be more but not more than 24%.

Understanding the Payment Process under GST

1.   Electronic Tax Liability Register

The tax liability register records all the liability of the person that includes –

• Tax, late fees, interest, or any other amount that is payable by the taxpayer.
• Any tax or interest payable that arises due to the mismatch of output tax liability or ITC.
• Any interest that accrues.
• Reversal of interest or ITC.

Here’s the process that needs to be followed by the taxpayer –

• Self attests all the tax and other dues related to the previous tax period returns.
• Self attests all the tax and other dues related to the current tax period returns.
• Any other liability arising under the act/rules.

2.   Electronic Cash Ledger

An electronic cash ledger includes any amount that is paid by the taxpayer. The amount in a cash ledger can be used for the payment towards interest, tax, penalty, indirect tax, or any other amount that is due under the acts/rules.

For the payment, the taxpayers need to generate an online challan using form GST PMT – 06. It will be valid for 15 days, and the payment can be made from any of the following modes –

• Internet banking
• Debit/credit card
• NEFT
• OTC payment (for deposits up to Rs 10,000)

3.   Electronic Credit Ledger

The electronic credit ledger includes all the claims of ITC that are self-attested by the taxpayer. The amount in this ledger can only be used for the payment towards the output tax.

No entry can be made directly in the electronic credit ledger, no matter what situation.

What are Common Offenses Under GST?

The GST law has clearly defined all the offenses and penalties that will be imposed in each condition or scenario. All the business owners, tax professionals, and chartered accountants need to pay attention to the details because even a small mistake can cost a lot or may lead to severe consequences.

Under the GST law, there are 21 Offenses. They are as follows –

1.   Fake/Wrong Invoices

• The person supplies goods/services without any invoice or issues a fake invoice.
• The person issues an invoice without the supply of goods/services.
• The person issues an invoice using the name or identification number of another taxable person.

2.   Fraud

• The person submits false information during the registration process.
• The person provides fake financial documents/records to file tax.
• The person submits the wrong information during the proceedings.

3.   Tax Evasion

• The person collects GST and does not submit it to the authority/government within 3 months.
• The person needs to deposit any GST in contravention of provisions that he collected, to the government within 3 months.
• The person gets a refund by doing some fraudulent activities.
• The person uses the input tax credit without a receipt of goods/services.
• The person suppresses his total sales.

4.   Supply/Transport of Goods

• The person transports the good without any documents.
• The person supplies goods with the proper knowledge that it will be confiscated.
• The person destroys goods that were seized.

5.   Others

• The person is not registered under the GST, though he was supposed to be registered by the law.
• The person does not deduct TDS or deducts a very minimal amount.
• The person does not collect TCS or collects a very less amount.
• The person being an input service distributor violates the GST rules of the input tax credit.
• The person hinders the officer during the audit.
• The person does not maintain the books.
• The person destroys any evidence.

If in case, any offenses are committed, the person needs to pay the penalty.

What Does the GST Penalty Rule Mean?

A penalty is a punishment that is imposed by the law if you fail to perform your duty or commit an offense. It can be both civil or criminal and is also known as corporal or pecuniary.

There are various GST penalty regulations that are mentioned in the law. Here are three rules –

• The taxable person on whom the penalty is imposed will be given a show-cause notice and an opportunity of being heard.
• The tax authority will give a reason for the penalty and explain the nature of the offense.
• If any person discloses a breach of law voluntarily, the authority can use this fact to reduce the penalty up to an extent.

The Penalty in Case of Fraud

In the case of fraud, the offender needs to pay the penalty amount of tax deducted, i.e., 100% penalty. For all the 21 offenses mentioned in the law, the penalty for fraud will be a minimum of Rs 10,000. (100% penalty)

Helping Someone to Commit Fraud Under GST

Apart from the taxable person, any person who does the following will have to pay the penalty. (Up to Rs 25,000)

Anyone who helps the taxable person to commit fraud, under the law.

Receives/obtains the goods and services (with full knowledge) that violate GST law.

Fails to issue an invoice or vouch any invoice appearing in the books, according to the law.

Do not appear before tax authority even after receiving the summons.

Offenses Related to Tax Evasion

If in case, the offender does not pay tax or evades, the penalty will be 10% of the tax amount due. (minimum of Rs 10,000)

If the offender has deliberately done the fraud, the penalty will go up to 100% of the tax amount. If it is a non-fraud case, the penalty will be 10% of the tax amount.

General Penalty

For any offense that is not specifically mentioned in the GST law, the offender will be liable to pay a penalty exceeding Rs/- 25,000.

Conclusion

Generally, the rules and regulations of penalty are the same in all laws. Timely GST payment is exceptionally crucial for the compliance of a business. It is essential to avoid instances of penalty or delayed payments. After considering various measures and depending on the severity of the offense, penalties are accordingly imposed. You need to maintain a proper record and pay GST on time to avoid any problems. You can also use various GST billing software and take help from professionals if required.

We offer 14 days of free GST billing software trail for small businesses in India. Login to get started!

Bengaluru, India, December 23th, 2020 – Accounting is an integral part of business operations. It determines the sustainability and growth of an enterprise. Today, the world is driven by technology; In an era like this, it is crucial for business owners to manage their accounting system wisely. Businesses must focus on building a more substantial accounting base, responsibly looked after by the right professionals doing the right job irrespective of the time, location, or device.

How to build a robust accounting base? Working as a team, sharing business insights allows an enterprise to grow seamlessly. Businesses must focus on collaborating between different departments, bringing both the internal team and external accountants to work together. With superior team coordination, business owners can organize accounting bases through integrated, multiple user login systems.

Does accounting software in India support a multi-user login system? Which Indian accounting software allows data access permission control? Imprezz is the pioneer of accounting software for small businesses in India. It will enable the users to restrict the data access as per the location. It is an all-in-one integrated, multi-user accounting system that allows businesses to manage, edit, or modify their accounting operations.

Most SME’s in India employs more than one determined staff to handle the accounting tasks. It has increased the demand for multi-user accounting software for businesses. Imprezz is a cloud-based invoicing and billing software that allows at least ten different users to maintain records and business transactions. It will enable each user to modify or delete any accounting data or transactions based on their roles and responsibilities.

The administrators or business owners can control and restrict the data access permissions as per their requirements. Alongside limiting the data access, users also have the privilege to restrict access by IP location. It helps users rest assured by detecting if the data is being accessed by the determined professional from the right location. Imprezz is one of India’s robust accounting systems, enabling businesses to operate remotely, anywhere, anytime. The multi-user feature strives to support small and medium enterprises in India to expand globally in multi-location.

Collaboration is the key to make a difference in the world. Business owners and accountants can now make the best of their team members through collaborating across the departments. Imprezz multi-user accounting software enables real-time financial data sharing that helps run a business efficiently.

Always be a Leader

Imprezz, a multi-user accounting system, enables the user to lead the pack. You can provide specific control to selected individuals who want access to certain parts of your financial data. The unique role-based data-sharing model makes collaboration more comfortable, faster, and secure.

The software’s functions simplify sharing profit and loss statements, general ledger, balance sheets, and trial balance. It streamlines reports by dates, project type, and financial year. The export function enables you to download excel and PDF files in just a few clicks.

Collaboration Across Various Levels of Organization

Giving specific access to your staff, accountants, and investors to operate on different accounting modules amplifies work efficiency. Collaborating across various departments can be done quickly with the multi-user accounting system. For instance, the sales manager can easily upload, share, and track real-time invoices with accountants. Further, it helps accountants stay GST compliant with on-time tax filing and auditing. When required, you can also share access with your financial advisors to ease the process of decision making.

Simplified Ledger Sharing

You no longer need to work on simplifying the confusion concerning ledger sharing. Imprezz enables you to share ledger by providing access to your accounting team or clients. It helps avoid discrepancies caused by different departments of accounting.

User Roles & Privileges of Imprezz Multi-User Live Version

1.     Administrator

The enterprise administrator is the one who controls the entire software. They handle the logins, configuration of system settings, and other core technical operations concerning the software. They create different user ID’s, assign corresponding duties concerning designated professionals. Controlling the permissions enables the user to access financial data as per roles set by the administrator.

2.   Accountants

Accountants are the ones who handle the integral operations of finance. They will have access to all financial data except for the configuration settings of the software. Otherwise, they are free to access and manage other business operations on the software.

3.   Sales

Sharing business data with the sales team is vital as recording each transaction is the main agenda of using accounting software. Collaborating with the sales department helps record quotations, invoices, and other sales-related documents in real-time.

4.   Sales & Purchase

Most SMEs prefer working with limited employees. In that case, business owners can assign one user to manage both sales and purchase related entries.

Customized Roles

Imprezz allows the user to grant authorization by creating multiple user roles. You can create various roles and customize them as per the business requirements. It makes business accounting simpler and with the right accounting system in place.

Key Features of Multi-User Live-Version

You can organize and streamline all your accounting rules with team coordination by creating multiple user logins. Here are some of the critical features of the multi-user feature launch on Imprezz online billing software.

• Simultaneous multi-user access.
• Concurrent remote access through multiple devices.
• You can create ten different user logins to simplify financial data sharing and operations.
• Quick access to income books from time to time.
• The software supports web access for businesses that operate remotely.
• You can assign users to follow up on the different groups of customers.

About Imprezz

Imprezz is one of the leading cloud-based accounting software that has helped several small businesses in India proliferate. It helps manage GST tax filing, data reporting, reconciliation, and various other financial tasks under a single accounting platform. Users can utilize the dashboard to get insights from the overview of the total expenses, income, and key performance indicators.

Imprezz provides cloud access that allows enterprises to work remotely. The inventory management module enables supervisors to view the available stocks, create customized units, import financial data in excel or PDF format. It helps businesses link their bank accounts that allow real-time tracking of cash flow and daily transactions. The software offers a 14 days free trial software program for SME’s in India. Log in to know more!

Media contacts

For India                                         Amit Mundra	0049 2735 776248	info@imprezz.in

Modern SMEs rely on automation to stay on top of today’s cut-throat competition. Imprezz is India’s leading GST billing software that offers all-in-one small business accounting solutions for small and medium-sized enterprises. There are various official documents that business issues daily, one of which includes the invoices. Invoicing online is one of the easiest ways to track sales. Invoices are mainly categorized into two, purchase invoice and sales invoice.

A sales invoice is a document issued to the customer as proof of purchase. A purchase invoice in GST is a document issued to a buyer by its seller as a confirmation indicating the goods or services purchased. The usage of the purchase invoices is also slightly different from that of a sales invoices. There are various things a buyer must know about a purchase invoice to pay it. This article is a comprehensive GST invoice guide – Here’s everything you need to know about purchase invoices.

What is an Invoice?

An invoice is either issued on paper as a hard copy or online as a soft copy. It is formulated with various data that includes the supplier’s and buyer’s information, name, registration number (Value Added Tax, Unique Identification Number, Service Tax, etc.). An invoice also contains the details of items purchased, their quantity, tax rates, and taxable amount. It is mandatory to issue invoices as per the standardized invoice format.

What are GST Invoices?

GST invoice is a document issued as per the standardized GST invoice format. It is issued and obtained by taxpayers that acquire the GSTIN. GST invoice contains the tax rates and taxable amount applicable to the intrastate and interstate sales or purchases. There are various tax rates applicable to each type of transaction. CGST and SGST are applicable on the intrastate supplies, and for interstate supply, IGST will apply.

GST Purchase Invoice

A purchase bill with GST or invoice is issued to evaluate the purchase. It is mandatory to mention the GSTIN of both buyer and supplier to obtain the Input Tax Credit. The GST system automatically records the buyer’s account balance once the supplier successfully uploads and files the GST form.

It is essential to understand the difference between the invoice date and invoice due date while formulating a purchase invoice. The invoice date indicates the date on which a purchase invoice was issued. The due date means the scheduled date after which the payment is considered due against the issued invoice.

While generating a purchase invoice, it is also crucial to understand the importance of a serial number. The serial number helps maintain and restrict invoice manipulation. For instance, if an invoice is issued with the serial number INV020, the invoice’s formatting is preserved and limited to that number alone.

What are the Types of Purchase Invoice Issued through GST Billing Software?

Businesses in India and across the world rely on issuing purchase invoices. It helps business operations run smoothly and keeps track of each payment. Purchase invoice templates on Imprezz can be used to issue various types of purchase invoices, namely:

• Proforma Invoice
• Interim Invoice
• Final Invoice
• Past Date Invoice
• Recurring Invoice
• Credit Memo

Regardless of the types of invoice businesses need to issue, the customizable invoice templates on Imprezz GST invoicing software are specifically designed to create invoices and issue them. Business owners can edit the template as per their needs and save it to issue professional invoices.

How is Purchase Invoice Different from Purchase Order?

The critical difference between the purchase order and invoice is that a purchase order is a business document containing details of the transaction yet to be completed. A purchase invoice is a document containing the details of the transaction that is already fulfilled. Moreover, a purchase invoice includes the total cost of the goods or services purchased, wherein a purchase order does not.

Contents of a Purchase Invoice – GST Billing Software

There are various fields that a supplier must include in a purchase invoice. Imprezz offers customizable templates that include all the necessary fields of the purchase invoice. Once the data is manually entered, the invoice is ready to be issued in just a few clicks. Some of these elements are mentioned below.

Title – Suppliers must officially label the invoice as “Purchase Invoice.”

Invoice Number – The invoice number is the unique identifier of an invoice purely formulated with digits.

Invoice Date – It is the date on which the purchase invoice is officially issued to the buyer.

Supplier’s Details – It is crucial to mention the person who provides the goods and services. Their name, address, GSTIN, and other important information must be included in the document.

Customer Details – It is the person who purchased the goods or services from the supplier. It is crucial to mention their name, address, GSTIN, and other important information in the document.

Description of the Goods – It is an in-depth description of each item contained in the business transaction.

Quantity and Value – The quantity and amount of each product must be indicated in the purchase invoice.

Currency – Supplier must mention the specific denomination (legal medium of exchange) used in the transaction.

GST Charges – If the supplier has a business registered under the GST, the particular amount must be indicated in the purchase invoice. This way, the purchase invoice becomes valid under GST. Alongside mentioning the GST charges, the supplier must also mention the GST registration number.

The Total Amount Net of GST – The total amount of goods or services rendered is exclusive of the GST.

The Grand Total – It is the value of the transaction as per the applied GST rates.

Creating Purchase Invoices with Imprezz GST Billing Software

Imprezz is the pioneer of accounting software that streamlines the business workflow by simplifying accounting operations. The software primarily assists in the automation of accounting systems that enable business owners to focus on other business operations. The software offers a user-friendly interface that can be easily operated by accounting toddlers. Imprezz is a collection of various features that come in handy. The integration enables small businesses in India to automate and achieve higher organizational goals.

Conclusion

A purchase invoice is a business document that shows the contents concerning the specific transaction. It is vital to ensure that all the necessary fields, invoice date, due date, and serial numbers are accurately laid out in a purchase invoice. Purchase invoice has to be created as per the guidelines suggested by the Indian government.

The time has come for small businesses to update their invoicing procedures. Your invoices need not look basic. With Imprezz GST invoice billing software, you can easily create high-quality, custom invoices in just a few clicks. We offer 14 days of free GST billing software trail for small businesses in India. Login to get started!

The GST Council of India has incorporated new concept of supply into the tax regime. On certain occasions, a combination of goods or services is provided together. Vendors might do this to attract more customers. At times, specific goods are grouped due to their similarities. Earlier, this mechanism was known as packed goods or services. However, the simultaneous taxable supply is now classified as mixed supply and composite supply under GST.

The composite supply in GST is easy to understand when compared with the Service Tax Laws. Wherein, the mixed supply is a new concept included in the GST. Thus, it is vital to understand the implications of composite supplies versus mixed supplies in today’s GST era. This article is a complete guide on mixed supply and composite supply under GST. Further, the article briefly explains the concept of supply, mixed supply, composite supply, and time of supply under GST.

What is Supply under GST?

As an economic term, supply is defined as the number of resources that a producer, vendor, laborer, firm, or a financial agent supply to the market or directly to another agent in the market. The following supplies are accountable under the new GST returns system.

• Sale
• License
• Barter
• Exchange
• Transfer
• Lease and Rental
• Disposal

Whether made business expansion, promotion, or otherwise, import of services are considered accountable under GST. Any other activity that lists under Schedule 1 of Goods and Services Tax (GST) Act 2017 is also included.

The Concept of Mixed Supply and Composite Supply under GST

The GST council has specified individual tax rates for the supply of each type of commodity. It is easier for the vendors supplying specific goods and services to understand and identify the applied GST rates. The GST Council notifies any changes in the GST rates from time to time. However, specific provisions of goods and services are interlinked to each other with no connection. For instance, a vendor might offer installation services with the supply of a washing machine or any other product.

The Goods and Services Tax pre-defines the classifications offered. Therefore, understanding the concept of mixed supply and composite supply under GST is crucial for the unified tax treatment under GST. It helps understand and classify the type of supply that helps determine the ascertained tax rates on supplied goods or services.

What is a Bundled Supply under GST?

A supply is termed as a bundled supply when goods or services are combined. The bundled supply concept is found under the Services Tax Law, where two or more services are mixed.

How to Determine a Naturally Grouped Bundled Supply?

Determining a bundled supply in an ordinary business course depends on the formal practices followed in each industry. Here’s how you can determine the nature of these goods and services.

Naturally Bundled Supply: Type-1

When buyers expect to purchase services under a single package, these packages are treated as naturally bundled supplies. For instance, a firm holding a business conference seeks a combination of hotel services along with auditorium and dining accommodations.

Naturally Bundled Supply: Type-2

When service providers in a particular industry tend to offer a service package, it is also considered a naturally bundled supply. For instance, airlines offer travel and in-flight services together as a combined package.

Naturally Bundled Supply: Type-3

The nature of services supplied in a package also helps determine whether the service is bundled or not. Often, the main service and secondary service are pooled together, making it a naturally bundled service. For instance, five-star hotels offer laundry services for guests residing in the hotel; the room rental is the main service, and the laundry service is secondary.

Naturally Bundled Supply: Other Types

Other indications for the aggregation of services in the normal business context (not an infallible aggregation):

• The package price remains the same, even when the customers opt to choose selective services.
• The products or services are sometimes advertised in a bundle.
• Sometimes the goods or services are offered in a bundle when different commodities cannot be provided individually.

What is a Composite Supply under GST?

A set of goods or services are grouped naturally and supplied with each other in a normal business context, one of which happens to be a principal supply. These goods or services cannot be provided individually. In simpler terms, a composite supply includes goods and services bundled together, entailing the natural necessities. The elements in a composite supply are usually bifurcated as Principle Supply and Dependent Supply.

• Principle Supply – It is the predominant commodity in the composite supply of goods and services.
• Dependent Supply – It is the commodity that is dependent on the principle supply of goods and services.

How to determine a Composite Supply?

The supply of goods or services is treated as a compound supply if it meets the following criteria:

• A supply that consists of two or more goods or services together.
• A natural package, commodities offered together in an ordinary course of business.
• Inseparable set of commodities.

Tax Rates Applicable on a Composite Supply

The tax rate applicable to the principal supply is the tax rate applicable to the entire set of supplies. For instance, the goods are usually transported along with insurance. Under this scenario, the goods supplied, packed materials, transportation, and insurance are a composite supply. Here, insurance and transportation cannot be provided individually without the supply of goods. Thus, goods become a principal supply under GST.

Tax liability on the entire set of supply is the tax rate applicable to the principal goods. If it does not satisfy the second condition, it is considered a mixed supply.

What is a Mixed Supply under GST?

A mixed supply under GST is a combination of individually sold goods or services grouped or manufactured together at a special price. None of the goods or services in a package under a mixed supply are dependent on each other. Under GST, the tax rates applicable to mixed supply will have the highest tax rate. For instance, a festive package sold with food items, candies, cakes, canned sodas, and dry fruits come with a single price. However, each item can also be sold individually. Since the 28% GST rate applies to soft drinks, the same rate applies to the gift box’s main supply.

How to Determine if a Supply is a Mixed Supply?

• Any supply that cannot be ruled out as a composite supply is mixed.
• Any goods or services that are separately supplied and intentionally assembled in the normal business course is a mixed supply.
• For instance, any gift box containing different goods or services is taxed differently when each commodity is sold separately.

Difference Between a Mixed Supply and a Composite Supply

Combined supply and mixed supply usually appear to be similar to each other at first glance. Either way, supplied goods or services are packed and sold at a single price. However, here’s how the GST regime differentiates the supplies.

Difference # 1 – Principle Supplies

In a composite supply, vendors can determine the significant part of the supply of goods or services. Wherein, in a mixed supply, neither buyer nor the supplier can determine the principle commodity (although the item with the highest tax rate is treated primarily for taxation).

Difference # 2 – Individually Available Supplies

In a composite supply, selling secondary service or goods separately from the main supply of goods or services does not make sense in an ordinary business course. For instance, it doesn’t make sense if a hotel separately sells towels, shampoos, ironing facilities, and other necessary facilities provided in the hotel room). In a mixed supply, each item grouped can be sold individually in the market. For instance, a grocery package entailing a variety of snacks and drinks can be sold separately.

What is Time of Supply?

Under GST, time of supply can be defined as the point of time when particular goods or services are considered to be supplied. When suppliers know the time of supply, it helps them determine and identify the due dates for the tax payment.

Time of Supply in Case of Composite Supply

The composite supply is treated as a supply of services when the principal supply is a service. For example, airline services that include transportation and food onboard. Provisions concerning the time of supply will apply to the services supplied. Likewise, the supply is treated as a supply of goods when the principal supply is a product. Provisions concerning the time of supply apply to the goods supplied.

Time of Supply in Case of Mixed Supply

A mixed supply is treated as a supply of services when the highest tax rate relates to service. Provisions concerning the time of supply will apply to the supply of the service. Likewise, a mixed supply is treated as a supply of goods when the highest tax rate relates to a product. Provisions concerning the time of supply will apply to the supply of goods.

Conclusion

Given the rolling classification of supplies as mixed supply and combined supply under GST, small businesses in India will need to review all potential packages of goods and services. Taxpayers need to understand composite supply versus mixed supply and its tax implications clearly, thus working towards the desired goal of aggregating goods and services.

Simplify your GST accounting and automate tax calculation. Implement Imprezz invoicing and billing software to comply with the GST regime. Stay ahead in the competitive business world, rid of the tedious manual accounting practices. Save time and work smart by automating financial operations. Focus on other crucial business activities while we take care of your small business accounting.

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The Goods and Services Tax (GST) e-invoice is a digitally generated invoice for the business transactions recorded on the government portal. The concept of GST e-invoice schema is expected to curb GST tax evasion. The authorities working for GST Council have officially provided a standardized digital billing system for businesses to generate e-invoices for each sale on the GST portal. Modern accounting software has adopted the new e-invoice system by aligning the data access and retrieval as per the standardized e-invoice format.

GST e-invoicing system is applicable for businesses that meet the established threshold limit, the minimum threshold notified by the government. According to the latest notifications, taxpayers and businesses with a certain threshold will receive a Unique Identification Number (UIN) each time they issue an e-invoice. It helps them match the invoices written on sales returns with that of taxes paid for verification.

Imprezz offers the best electronic billing software solution for businesses in India. The program provides seamless integration of API and import and export functions for uploading or downloading Excel sheets. It is an easy-to-use automated accounting system that comes with added value; reconciliation, e-way bills, GST return filing, reports, customizable quotation templates, consolidated electronic invoices, data archiving, etc.

Procedures for Obtaining GST E-Invoice

There are various stages involved in obtaining an e-invoice. Here’s how to create and issue e-invoices as a registered taxpayer.

Step – 1

PEPPOL (Pan-European Public Procurement On-Line) standard is an electronic data interchange protocol designed to simplify the invoicing processes involved from purchase to pay between the government and suppliers. Taxpayers must verify and ensure that their ERP system is reconfigured accordingly. It enables the service providers to integrate the updated e-invoicing standards that instill the mandatory parameters notified by the CBIC.

Step – 2

Registered taxpayers are usually provided with two basic options to generate an (Invoice Reference Number) IRN.

• Taxpayers can directly whitelist their computer’s IP address on the GST e-invoice portal for API integration or to integrate via GSP (GST Suvidha Provider).
• Taxpayers can otherwise download bulk invoicing tools that help upload invoices in a batch. It further creates a JSON file that has to be uploaded to the GST e-invoice portal to generate an IRN in bulk.

Step – 3

The next step is to create a regular e-invoice that includes all the mandatory fields. For instance, billing name, address, GSTN of the supplier, item rate, transaction value, GST rates applicable, taxable amount, etc.

Step – 4

Once taxpayers finalize one of the options mentioned above, they can create invoices in the ERP or invoicing and billing software. It is crucial to upload the invoice details with all the required fields to the (Invoice Registration Portal) IRP using JSON files. It can be done via a software service provider (either an application or GSP). The IRP is a central registrar for e-invoices and authentication. Taxpayers can also interact with IRP through SMS-based messaging and mobile apps.

Step – 5 

In the next step, the IRP will validate the details uploaded by the taxpayers. Each B2B invoice is verified for duplication and generation of IRN: Supplier’s GSTIN, Invoice Number, and Fiscal Year in YYYY-YY and Document Type (INV / DN / CN).

Step – 6

The portal generates the IRN with a digital signature on the invoice and creates a QR code in the supplier’s output JSON file. In the meantime, suppliers will be informed of e-invoice generation through email (if provided in the invoice).

Step – 7

In the end, IRP sends an approved payload to the GST portal. Authenticated details will be sent to the e-way billing portal (if any). Supplier’s tax forms are automatically completed for the relevant tax period determining the tax liability.

Note: Taxpayers can continue to create invoices with their logo prints on them. The e-invoicing system doesn’t restrict businesses on logo prints; instead, it only obligates them to report invoices in the IRP in an electronic format.

How will GST E-Invoice Curb Tax Evasion?

The government has implemented the new GST system aiming to curb tax evasion. According to the new system, e-invoices must be compulsorily generated through the GST portal. It allows the tax authorities to access transactions executed in real-time quickly. Since invoices are now created before the transaction, it reduces the scope for manipulating the invoices. Thus, Input Tax Credit can only be claimed originally as ITC is combined with the production tax details. All-in-all, it becomes easier for GSTN to track fake tax credit claims.

Mandatory Fields of an E-Invoice

Taxpayers must adhere to the GST invoice rules while drafting an e-invoice. It is crucial to implement an ideal invoicing and billing software like Imprezz, that has adapted the system and policies that each industry type or sector follows in India. Some invoice details are mandatory, while the others are optional. The e-invoicing system allows freedom to choose the relevant fields to be filled in an e-invoice. Mandatory fields under e-way bills are now merged with e-invoice, such as type of secondary supply.

According to the latest announcement on e-invoice format content notified on 30^th July 2020, taxpayers must focus on various gist of e-invoicing under GST.

• The e-invoice format contains 12 sections, including the mandatory and optional fields.
• It includes six annexures that consist of a total of 138 fields.
• Out of the 12 sections, five are mandatory, and 7 are optional fields.
• Two annexures are mandatory under the new GST system.
• The five mandatory fields include the necessary details, vendor’s information, recipient’s information, invoice item details, and total.
• The two mandatory annexures are the item details and document total.

Benefits of E-Invoicing under GST

The new e-invoicing system allows B2B invoices to be authenticated electronically by the GSTN. The new system ensures the standardization of invoices, and thus, ERP suppliers must update their layouts accordingly. Here are some of the crucial benefits of e-invoicing under GST.

• Simplified GST Compliance
• Real-Time Invoice Tracking
• Precision
• Easy Creation of E-way Bills
• Minimized Reconciliation Errors
• Timely Reporting of B2B Invoices
• Helps the Recipients
• Deduction in Price
• Supports Interoperability
• Abolition of Paper Invoices
• Increase in Capital Performance
• Scanning through QR Code
• Improves the Overall Business Efficiency

Drawbacks of the GST E-Invoice System

The main objective of implementing an e-invoicing system was to curb tax evasion. The new system facilitates the B2B invoices and not B2C invoices. The maximum number of frauds occurs from B2C invoices as there is no involvement of ITC. Therefore, the system should emphasize allowing customers to report incompatible invoices that help reduce tax evasion at its source.

The capacity to upload invoices is based on the data uploaded on the GSTR-1 Form during the last two years. Thus, GSTN needs to be equipped with the latest technology to minimize the downtime that adversely affects GST compliance. Despite the several updates on the GST portal, the archive option is still missing in the IRP. Taxpayers yet do not have permission to store the invoice data for more than 24 hours.

Scope of Mandatory E-Invoicing in India

In India, mandatory e-invoicing will come into force from 1^st January 2021 for Indian taxpayers with an annual turnover exceeding rupees 100 crores. Taxpayers and businesses are expected to prepare quickly to take full control of solutions that facilitate the generation and issuance of e-invoices. In early October, the Finance Minister, Ajay Bhushan Pandey, announced that e-invoicing through IRP would be available for businesses and taxpayers starting from 1^st January 2021, explaining the goal of making e-invoices mandatory for B2B transactions as of 1^st April 2021.

The transactions must the carried out through GST e-invoices on the IRP when the government mandates the B2B e-invoices in India. The announcement was made officially on 10^th November 2020 when the CBIC confirmed the businesses’ eligibility to implement e-invoice authentication from 1^st January 2021. The mandate GST rule in India is currently applicable to businesses and taxpayers with an annual turnover of more than rupees 500 crores. Banks, teleservice providers, financial institutions, and armed forces are exempt from issuing e-invoices.

Conclusion

E-invoice is the exchange of an integrated electronically formatted document between a supplier and a recipient. The conventional billing processes included heavy paperwork and tedious manual data entry tasks that are intense and prone to error. E-invoicing under GST focuses on reducing the invoicing costs and processing life cycles for businesses. Before implementing an e-invoicing system for your firm, you need to make certain crucial decisions. Do you want to manage accounting tasks internally or work with a third-party e-invoicing solution provider? What e-invoicing solution best suits your business requirements?

Is your existing invoicing solution software repeatedly failing to offer the best for your business? Imprezz is the leading B2B accounting solution service, provider. The e-invoicing model offers integration that enables suppliers and customers to achieve GST compliance as per the specified e-invoicing GST laws and rules under a single platform. Process invoicing data without investing in expensive software or employee resources. We offer a 14 days free trial software program for small businesses in India. Log in to get started with the new GST electronic invoice system.

GST e-invoice has become a point of discussion among businesses and taxpayers in India. When any goods or services are transported from one place to another, the transaction is facilitated by filing invoices or e-way bills on the government GST portal. In the 35^th meeting held by the GST Council, the government decided to implement a GST e-invoicing system to curb tax evasion and automate multi-purpose reporting tasks with a single entry of invoice details.

E-invoice is a standardized invoicing format where businesses and taxpayers register invoices electronically as per the GSTN recommendation. E-invoices must be generated by the Invoice Registration Portal (IRP) to upload on the common GST portal. E-invoicing doesn’t mean generating tax invoices over the GSTN portal; it is a misconception or a myth. Instead, it is just the submission of invoices generated by business intelligence software like Imprezz.

Imprezz offers the best e-invoicing software solution for small businesses, accountants, and freelancers in India. The software provides seamless API integration, import, and export functions to upload or download excel sheets. It is a user-friendly and automated accounting system that comes with value additions; reconciliation, e-way bills, GST returns filling, reporting, customizable quotation templates, standardized e-invoicing, data archiving, etc.

Latest Updates on E-Invoicing under GST

10^th November 2020 – businesses and taxpayers with an annual turnover exceeding or equal to 100 crore rupees must implement e-invoicing from January 2021.

30th July 2020 – CBIC notified the newly refined e-invoice format. 20 mandatory fields were included after removing 13 existing fields. Alongside, existing fields were altered with necessary changes concerning the character length and other invoicing essentials. As per the notification declared by 30^th July, e-invoicing is applied to taxpayers with an annual turnover exceeding 500 crores instead of 100 crore rupees. However, the Special Economic Zones (SEZ) were exempted from issuing e-invoices.

23^rd March 2020 – Implementing the e-invoicing system and the QR code was postponed to 1^st October 2020. As per the guidelines notified until 23^rd March 2020, financial institutions, insurance companies, banks, NBFCs, passenger transportation services, GTAs, and movie tickets were exempted from e-invoicing and QR codes.

14^th March 2020 – the new returns system was announced to be implemented from October 2020. The existing GST returns filing system (GSTR-1,2A & 3B) was enacted until September 2020 as per the CBIC notification.

13^th December 2019 – the class of taxpayers required to generate e-invoices on IRP was notified by CBIC. Taxpayers and businesses with an annual turnover exceeding 500 crores were mandated to file e-invoices starting from 1^st April 2020. The government had also declared the mandatory fields contained in e-invoices under the CGST rules.

10^th December 2019 – the final version of the e-invoicing template and mechanism was released by the GSTN on the common portal after the GST council’s approval.

20^th September 2019 – considering the announcements made in the 37^th GST Council Meeting, the new GST return system was said to be implemented from April 2020.

20^th August 2019 – the draft template of e-invoice was released by GSTN for the industry feedback, known as the GST e-invoice schema.

What is GST E-Invoicing?

E-invoicing, also known as electronic invoicing, is defined as business invoices that are electronically authenticated by GSTN which is further used in GST return filing on the common portal. Under the e-invoicing system, the IRP (Invoice Registration Portal) managed by GSTN (GST Network) issues an identification number against each invoice. The National Informatics Center launched the first IRP on the government website.

Any billing information is transferred from the government portal to the GST portal and e-way billing portal automatically. It aims to eliminate the tedious task of manual data entry, multiple times that goes in submitting the GST forms and drafting e-invoices. IRP cuts short the lengthy process by directly sharing information to the GST portal.

What is the Existing System to Issue GST E-Invoices?

Businesses have adopted various software systems to create and send invoices. Details from the software are used while uploading the GST forms. Invoice information submitted in the FROM GST-RET-1 by the supplier will be reflected in FORM GST-RET-2 for the recipients to view. Suppliers are supposed to upload e-invoices by manually importing all the necessary data into the software system.

The existing e-invoicing system implemented on 1^st October 2020 contains the same procedures and processes of creating and uploading the invoice details. Usually, it is done by importing either excel or JSON files through import tools or AI integration (you can use Imprezz accounting software to access import tools and AI integration features under a single platform) either directly or through (GSP) GST Suvidha provider. It aims to streamline data flow in the configuration of FORM-1 and generate e-invoices.

How Does E-Invoicing Benefit Small Businesses in India?

GST e-invoice is said to support small businesses in India alongside helping the government curb tax evasion. Small businesses can benefit from the GSTN initiated e-invoices in the following ways:

• Filing e-invoices resolves the data reconciliation issues and decreases the chances of mismatch errors.
• The interoperability feature of e-invoices allows one software to read another, helping reduce invoice processing’s manual error.
• E-invoicing enables the suppliers and recipients to track invoices in real-time.
• Invoice details on e-invoices are auto-populated on multiple forms. It helps create Part-A of GST e-invoices with zero hassles. The background integration and automation eradicate the tedious tasks of filing GST returns.
• E-invoices help claim ITC (Input Tax Credit) in no time.
• The probability of performing audits and surveys by tax authorities is way lesser in comparison because e-invoices provide all the information they require at the transaction level.

What is the Initiative of GSTN E-Invoices?

The format for e-invoice was released in Excel format by the GSTN on 20^th August 2019 to avail the public’s feedback. The GST Council approved the format suggested, with certain modifications after the 37^th GST Council Meeting held on 20^th September 2019. The GSTN, along with the supervision of ICAI, drafted the final standardized e-invoice format that complies with GST and other Indian local tax laws. Moreover, the GST e-invoice format is drawn after considering various international and national standards. Thus, the final format of the GST e-invoice quickly adapts to any business or industry type.

Business intelligence/accounting software follows the standard PEPPOL while generating invoices. It enables taxpayers to create GST compliant invoices. GSTN has referred to the standard of PEPPOL (Pan European Public Procurement Online) that works well on the Universal Business Language (UBL) version of E-XML. This standard is currently a widely used system that enables various business applications and communities to share information throughout the supply chain. The single data entry point enables businesses to streamline the data flow through multiple gates with IRP’s help.

GST e-invoice contains the following sub-categories:

E-Invoice Schema – it is the primary part of an e-invoice containing the technical field name, description of each field, mandatory and optional fields, and some sample values with an explanatory note.

Masters – it is the second part of an e-invoice that defines the inputs set for specific fields predefined by the GSTN. It includes fields such as state code, UQC, invoice type, supply type, etc.

E-Invoice Template – it is the end part of an e-invoice; the template complies with the GST rules, enabling the user to link the terms used in other documents. In any e-invoice template, mandatory fields are marked in green and optional fields in yellow.

When was GST E-Invoice Implemented?

According to the latest announcements, taxpayers with aggregate turnover exceeding 500 crores were supposed to generate e-invoices from 7^th January 2020 through API voluntarily. Taxpayers with a turnover exceeding 100 crores but less than 500 crores were asked to create e-invoices starting from 1^st February 2020. The e-invoicing system was mandatorily implemented only after 1^st April 2020. However, later it was postponed to 1^st October 2020 for taxpayers with a turnover exceeding 500 crores. The aggregate calculated must include the turnover of all GSTNs under a single (Permanent Account Number) PAN across India.

E-Invoicing Under GST – Major Challenges

Despite several amendments made in the GST electronic invoice system, taxpayers and businesses still face several hurdles.

• Invoices are not considered valid in case they are not registered under the IRP.
• On each breach of the invoice, a fine of rupees 10,000 will be imposed.
• One cannot transport goods without a valid e-invoice.
• ITC has become one of the main reasons recipients do not pay in the absence of an e-invoice.
• Besides, the government has planned to implement a check that allows businesses to issue e-invoices in IRN’s absence.

Conclusion

Cygnet GSP successfully processed more than 8,515,000 electronic invoices in the first month, representing 18.6 percent of the total electronic invoices generated on the NIC portal. Since e-invoicing is now mandatory, it would be a good idea to start preparing ahead of time and evaluating your business and vendors. Say no more to the tedious GST accounting tasks, implement Imprezz invoicing and billing software.

We offer a 14 days free trial software program for small businesses and taxpayers in India. Login to get started with GST e-invoicing.

The Goods and Services Tax (GST) has brought significant changes in the Indian economy. It has been consistently reshaping the tax calculation system. However, it has also confused taxpayers and people in business concerning the GST laws and rules. The new GST tax system has eliminated the cascading taxes on the supply of goods and services. It has successfully replaced indirect taxes such as value-added tax, excise tax, service tax, and other local taxes.

In theory, the implementation of GST and relaxations notified recently might sound great, but how do business owners get ahead with it? This article is part of our basic GST guide; Part-3 briefly summarizes various GST rules and regulations.

GST Rule-1: Title, Commencement & Application

The above mentioned GST laws put together can be termed as Goods and Services Tax (GST) Valuation Rules, 2016. This rule helps determine the value of the supply of goods and services. The law applies to the supply of services and goods under CGST, IGST, and SGST.

GST Rule-2: Definitions

These rules define specific terms as per the context. For instance, the “Act” is defined either as the IGST Act or CGST Act and, in some context, SGST Act. The term “goods of like kind and quality” is used to define physically similar, identical, qualitative, and reputed goods. It describes the value of goods that perform the same functions. Wherein the term “services of like kind and quality” defines the identical or similar services supplied. Any word, expression, or phrase that is not explicitly defined under this rule shall have the same meaning as specified by the law.

GST Rule-3: Determination of Value

The value of any goods or services is considered as transaction value, subject to rule 7 under the GST law. In monetary terms, “transaction value” is the specified value of the supplies. When a transaction consists of both taxable and non-taxable supply, it is identical to the monetary consideration attributed to it. The acceptance of the value remains unchanged even when the supplier and recipient are related.

The value of supplies depends on where goods are being transported from; one business place to another, principal to an agent or visa-versa, one country to another, and the same location. Only supply values specified under subsection (4) of GST law, as per Article 17, are determined according to Rules 4 to 6.

GST Rule-4: Determination of Value of Supply Through Comparison

The value of supplies that cannot be determined under Rule 3 is determined under this rule. For instance, the value of goods and services supplied is determined by the transaction value based on the same quality and kind under the sub-rule provisions (2). Wherein. If the value is being determined under sub-rule (1), various factors have to be considered; the difference in the date of supply and the difference in the quantity and commercial levels. The officer must also consider the difference in composition, design, quality, freight, and insurance charges of the goods and services concerning the place of supply.

GST Rule-5: Value Method

When the value of supply cannot be determined by the rules mentioned above, it is determined under Rule 5 based on the computed value. The value methods include production cost, manufacturing, processing, cost of provision, brand or design charges, profits, and general of the goods and services of the same kind and quality as that of other suppliers.

GST Rule-6: Residual Method

The residual method helps determine the value of goods and services that other rules fail to determine. Rule 6 determines the value using factors consistent with the general and principal provisions of these rules.

GST Rule-7: Rejection of Declared Value

If the concerned authority feels the need to cross-check the value’s furnished details or accuracy, they will ask the supplier to provide additional information as evidence. After receiving further proof, if the designated authorities feel the need to examine the declared value’s accuracy, the value of any such goods or services will be considered deemed. The transaction value of any such goods or services cannot be determined as per the sub-rule (1) under Rule 3.

The reasons for doubt cannot be limited to the significantly higher or lower value of goods or services than the market value of similar products. Authorities cannot reject the determined value based on the description, quality, manufacturing or production date, and quantity. Concerned officers must notify the suppliers by writing the reasons for doubting the accuracy of furnished details of determining value. Further, suppliers will be provided with an opportunity to clarify the doubts before taking the final decision under the rub-rule (1).

GST Rule-8: Valuation in Certain Cases

Pure Agent – The value of goods and services that remain undetermined under any of the rules mentioned above will be contained under Rule 8. The law excludes a service provider’s expenditure as a pure agent from the value of taxable service.

Money Changer – The value of any taxable service supplied, which includes the purchase of foreign currency or currency exchange, is determined by the service provider.

Conclusion

Staying GST compliant while running a business can seem tedious. However, it is one of the significant business operations that help business owners adhere to GST rules in 2020. The daunting accounting tasks become much more manageable with reliable and GST billing and invoicing system. It helps create and send invoices and track inventory as per the notified GST invoice rules. It is easy to use, accessible, and cost-effective.

Imprezz is the pioneer of accounting software in India. It helps bill faster, easier, and keeps track of each transaction while your business can comply with GST laws and rules. You can quickly issue invoices, quotations, notices, purchase orders, credit notes, over dues, balance sheets, and more. We offer a 14 days free trial software program for small businesses. Login to get started!

The Goods and Services Tax (GST) is an indirect tax regime that has replaced several indirect taxes in India. The GST laws and rules on goods and services were approved in the Parliament on March 29^th, 2017, and came into force on July 1^st, 2017. Any supply of goods or services is subject to GST. It is a comprehensive, multi-stage, destination-based tax that is applied to every value addition.

Under the GST system, the tax is applied at each point of sale. The central goods and services tax and the state goods and services tax apply for sales within the country. All interstate sales are subject to an integrated goods and services tax. This article is part of our basic GST guide; Part-2 briefly explains various Revised Rules under GST.

Revised Invoice Rules

Revised tax invoices under GST must be modified under the specified GST rules and format. While providing invoices for the supply of services or goods, suppliers might want to modify or revise the tax invoice. In such cases, a supplier must adhere to the following GST tax laws while invoicing.

Revised Tax Invoice under GST – Format

A revised tax invoice must contain the following specifications as per the GST invoice format in India:

• The invoice has to be titled “Revised Invoice.”
• GSTIN, name, and address of the supplier.
• Nature of the invoice.
• A consecutive serial number not exceeding 16 characters.
• The date of issue of the tax invoice.
• GSTIN, UIN, name, and address of the recipient (if registered).
• The recipient’s name, address, and delivery details, including the state’s name and code (For non-registered recipient).
• The date and a serial number of the corresponding tax invoice (applicable to supply invoices only).
• The value of a taxable supply of goods or services, the tax rate, the amount of tax credited or deducted to the recipient.
• A signature or digital signature of the supplier or authorized representative.

Supplementary Invoice

According to the GST invoice rules, if the taxable value or tax amount charged in a tax invoice is less than the payable amount or value of supply, taxpayers can issue either a credit or debit note. Credit or debit notes must be titled “Supplementary Invoice.”  Later, supplementary invoices must be included in the monthly returns, during which debit or credit notes were issued, to adjust tax liabilities.

Revised Payment Rules

CBEC released revised payment rules; it provides the methodical aspects relating to the following:

Electronic Tax Liability Ledger

As specified in subsection (7) of section 49, the electronic tax liability ledger must be kept in FORM GST PMT-01. It applies to all taxpayers liable to pay interests, fines, late fees, tax, or any other taxable amount on the common portal. All the tax payable amount will be debited to the ledger, as mentioned above.

Electronic Credit Ledger

The electronic credit ledger should be maintained in FORM GST PMT-02. It applies to the taxpayers eligible for the ITC (input tax credit) under the GST ACT. Every ITC claim will be added to a credit ledger as per the GST law.

Electronic Cash Ledger

The electronic cash ledger should be maintained under Subsection (1) of Section 49 in FORM GST PMT-05. It applies to taxpayers liable to pay taxes, late fees, fines, interests, and other payable amounts on the common portal for the deposited amount credited and debited towards the payables, as mentioned above.

Identification Number for Each Transaction

The portal generates a Unique Identification Number (UIN) for each debit or credit reported in the e-cash or credit ledger. The UIN concerning any liability discharge is indicated in the corresponding entry of the tax liability ledger.

Revised Refund Rules

Revised refund rules under GST specifies the laws to be followed by taxpayers to request a refund of tax, interests, fine fees, or any other amount. Taxpayers, except for those that fall under section 55, requesting the refund of tax and any aforementioned additional amount must submit their request through FORM GST RFD-01. They can upload the form either directly on the GST portal or through the facilitation center, as notified by the commissioner.

Revised Registration Rules

Taxpayers who are subject to registration under subsection (1) of section 25 and subsection (3) of section 25 must provide their PAN (Permanent Account Number), mobile number, e-mail address, and state or union territory information before registration in FORM GST REG-01 on the common portal. They can either upload these particulars directly or through the facilitation center.

The revised registration rule does not apply for the non-resident taxpayers, taxpayers providing online information and data access to a person abroad under section 14 of Integrated Goods and Services Tax (IGST), taxpayers subject to deduct taxes under section 51, and taxpayers subject to collection of taxes under section 52. Taxpayers from special economic zones or SEZ developers must submit a separate registration application as a business sector distinct from other units outside their zone.

Revised Return Rules

GST has integrated various returns under a single tax calculation system. However, GST entails categories of return filing. Any taxpayer has to adhere to these revised return rules to avail ITC.

Outward Supplies

Taxpayers must provide details of outward supply of goods and services, or both, under section 37. These details must be furnished in FORM GSTR-1. Taxpayers must file the form electronically on the portal as per the new GST law. They can either file returns directly or through the facilitation center.

Inward Supplies

Registered persons are required to provide details of inward supply of goods and services, or both, received during a tax period as per subsection (2) of section 38. They are supposed to furnish the details based on Part A, Part B, Part C, and Part D of the GSTR-2A FORM.

Taxpayers must furnish the details specified in subsection (1) of the previous section and submit it through FORM GSTR-2 electronically through the common portal. They can either upload it directly or through the facilitation center. Once taxpayers mention the inward supply details mentioned above, other information can be uploaded under subsection (2) of section 38.

Monthly Return

Taxpayers who are not distributors, non-resident taxable individuals, businesses taxable under section 10 or section 51 must file a specific return under subsection (1) of section 39 in the FORM GSTR-3 electronically through the common portal. They can either upload it directly or through the facilitation center.

Quarterly Return

Taxpayers subject to pay tax under section 10, after the amendment of details in the FORM GSTR-4A, must file quarterly returns on the FORM GSTR-4 electronically through the common portal. They can either upload it directly or through the facilitation center.

Revised GST Laws and Rules for Non-Resident Taxpayers

Non-resident taxpayers must submit FORM GSTR-5 electronically through the common portal. They can either upload it directly or through the facilitation center. They must also include the details of overseas supplies received, interests, fines, late fees, or any other amount payable under GST rules and regulations. Taxpayers must submit the form 20 days after the end of the taxation period or within seven days before the registration validity period ends (whichever applicable).

Revised GST Laws and Rules for Input Service Distributors

Registered Input Service Distributors must provide information on services, amend necessary details submitted in the FORM GSTR-6A (if any) and submit the FORM GSTR-6. They must also include tax invoices on which credits are collected and issued under section 20. They can either upload it directly or through the facilitation center.

Revised GST Laws and Rules for Taxpayers Required to Deduct Tax at Sources

Taxpayers required to deduct taxes at the source under Section 51 must file returns through the FORM GSTR-7 electronically through the common portal. They can either upload it directly or through the facilitation center.

Revised GST Laws and Rules for E-Commerce Operators

E-commerce operators in India collect taxes through sources under section 52; these taxpayers must submit statements in the FORM GSTR-8 electronically through the common portal. They can either upload it directly or through the facilitation center. The form must also contain details of supplies carried out through these operators and the tax amount collected under subsection (1) of section 52.

Conclusion

The new GST laws and rules were implemented earlier this year. Documents related to GST rules have been shared by the GST Council and CBEC authorities. These documents deal with taxable events under the new GST laws and rules. GST Rules 2020 aims to simplify the Revised GST rules, GST returns filling, and more.

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