Notifications for E-Invoices and QR Code on E-Invoices

E-Invoice and QR Code made compulsory for Class of Taxpayer under GST

CBIC has introduced multiple Notifications on 13th December 2019 notifying the provisions of E-Invoices and QR Code on E-Invoices.

Notification 68-2019 - Introduction of E-Invoices

1. The government has introduced a system of E-invoices. 
2. This notification has added sub-rule 4 to Rule 48 to introduce the E-Invoices for the class of Person as may be notified in the times to come. 
3. Such E-invoice Form shall be named as GST INV - 01.

4. Subrule 1 and 2 of Rule 48 which states that triplicate/Duplicate copies of Invoices shall be required, Will not apply to the cases where E-invoices will be made compulsory.

Notification 69-2019 - Notifying websites for E-Invoices

For the preparation of E-Invoices as required in Rule 48(4) as introduced by Notification no. 68/2019, Government has notified the following 10 websites.

(i) www.einvoice1.gst.gov.in;
(ii) www.einvoice2.gst.gov.in;
(iii) www.einvoice3.gst.gov.in;
(iv) www.einvoice4.gst.gov.in;
(v) www.einvoice5.gst.gov.in;
(vi) www.einvoice6.gst.gov.in;
(vii) www.einvoice7.gst.gov.in;
(viii) www.einvoice8.gst.gov.in;
(ix) www.einvoice9.gst.gov.in;
(x) www.einvoice10.gst.gov.in

This notification (Websites) Shall come into effect from 1st April 2020.  


It looks like the GST department is planning to divide the load of millions of Invoices prepared on these websites by the introduction of multiple websites. It is yet not clear how these websites will work,.i.e. each assessee shall be assigned only one website to prepare the E-Invoice or anyone can prepare e-Invoice on any of the websites.


Notification 70-2019 - Notifying class of Person for E- Invoices

For the preparation of E-Invoices as required in Rule 48(4) as introduced by Notification no. 68/2019, Government has notified that only person having turnover more than Rs. 100 Crores in the preceding financial year shall be liable for the preparation of E- Invoices.

This notification shall come into effect from 1st April 2020.

It looks like that having seen a roller coaster ride in the first two years of GSTN, the GST department is taking a safer route of the phased implementation of E-Invoicing. In time to come this 100 crore limit may go down to Rs. 50 crores or 25 crores or even 10 Crores.

Notification 71-2019 - QR Code requirement on Invoice

GST Amendment Rules ( Fourth Amendment) 2019 as per Notification number 31/2019 specifies that QR Code shall be required for Invoices for the notified persons from notified date.


This notification notifies the date 1st April 2020 from when QR code shall be mandatory for a specified class of persons to be notified.

Notification 72-2019 - QR Code requirement on Invoice

GST Amendment Rules ( Fourth Amendment) 2019 as per Notification number 31/2019 specifies that QR Code shall be required for Invoices for the notified persons from notified date.


This notification notifies that From 1st April 2020, any person having a turnover above Rs. 500 Crore shall issue the invoice with QR code for each B2C invoice.

Clarification on various doubts related to treatment of secondary or post-sales discounts under GST.

CBIC has issued circular no. 105/2019 for Clarification on various doubts related to the treatment of secondary or post-sales discounts under GST.

In most of the cases of supplier and distributor channel, there are post sales discounts which are passed through the Credit notes. Taxability of discounts has always been under scanner. CBIC has grilled further in the issue and clarified following:

1. The post-sale discount has been bifurcated into two categories.

    

a. Post sales discount without any activity on the part of dealer: Not taxable

b. Post sales discount for activities such as Special Sales drive, AD Campaign, Exhibition - Taxable in the hands of the dealer.

It is further clarified that in case of discount being non taxable, The dealer would not be required to reverse the credit.

Clarification Regarding GST on Penal Interest for delayed payment on EMIs.

GST on Penal Interest of EMIs

CBIC has issued Circular No. 102/2019 to clarify the taxability of Penal Interest on delayed EMIs.

Generally, following two transaction options involving EMI are prevalent in the trade:-

Case – 1: Where the Seller himself extends the benefits of EMI to the buyer: 

Seller ---> EMI ---> Buyer

X sells a mobile phone to Y. The cost of a mobile phone is Rs 40,000/-. However, X gives Y an option to pay in installments, Rs 11,000/- every month before the 10th day of the following month, over next four months (Rs 11,000/- *4 = Rs. 44,000/- ). Further, as per the contract, if there is any delay in payment by Y beyond the scheduled date, Y would be liable to pay additional/penal interest amounting to Rs. 500/- per month for the delay. In some instances, X is charging Y Rs. 40,000/- for the mobile and is separately issuing another invoice for providing the services of extending loans to Y, the consideration for which is the interest of 2.5% per month and an additional/penal interest amounting to Rs. 500/- per month for each delay in payment.

Case – 2: Where the third party (Such as Bajaj Finserve) extends the benefits of EMI to the buyer:

Seller ---> Sale ---> Buyer,  Third Party ---> EMI ---> Buyer

X sells a mobile phone to Y. The cost of a mobile phone is Rs 40,000/-. Y has the option to avail a loan at interest of 2.5% per month for purchasing the mobile from M/s ABC Ltd. The terms of the loan from M/s ABC Ltd. allows Y a period of four months to repay the loan and an additional/penal interest @ 1.25% per month for any delay in payment.

In case 1: Penal Interest will be part of Taxable value for GST.

In case 2: Penal Interest will not be part of Taxable value for GST.

Note: Any Service fees or service charge by the Third Party (Such as Bajaj Finserve) shall not be exempt from GST.

Notifications issued to give effect to Decisions taken in 35th GST Council Meeting.

To give effect to the GST 35th Council Meeting following notifications have been issued:

1. Notification No. 26/2019: 

The due date for Filling GSTR 7 (To be filed by TDS Deductor) for Oct-18 to Jul-19 has been extended to 31st August 2019.

2. Notification No. 27/2019

The due date for filling GSTR 1 for the person having a turnover of up to Rs. 1.5 crore for the period of Jul 2019 to Sep 2019 has been prescribed to be as follows:

Quarterly Jul 2019 - Sep 2019: 31st October 2019.

3. Notification No. 28/2019

The due date for filling GSTR 1 for the person having a turnover of more than Rs. 1.5 crore for the period of Jul 2019 to Sep 2019 has been prescribed to be as follows:

Monthly Jul 2019 - Sep 2019: 11th of the following Month.

4. Notification No. 29/2019

The due date for filling GSTR 3B for the period of Jul 2019 to Sep 2019 has been prescribed to be as follows:

Monthly Jul 2019 - Sep 2019: 20th of the following Month.

5. Notification No. 30/2019

The notification provides an exemption to the supplier of Online Information Database Access and Retrieval Services(“OIDAR services”) from filling Annual Return (GSTR 9)/ Reconciliation Statement (GSTR 9C)

6. Notification No. 31/2019

The notification seeks to carry out changes in CGST Rules,2017.

7. Notification No. 32/2019

The notification seeks to Extend the due date of filling GST ITC-04 (to be filed for goods sent for job work) for the period of Jul-2017 to Jun-2019 till 31st August 2019.

8. Removal of Difficulty Order No. 6/2019

The Due date for filing Annual Return and Reconciliation Statement has been extended from 30th Jun 2019 to 31st August 2019 for FY 2017-18.

Format For GST Audit Appointment Letter

To,

CA Firm Name

Chartered Accountants

Address

Sub: Appointment of GST Auditors under section 35(5) and section 44(2) of the CGST Act read with Rule 80(3) of the CGST Rules [read with the corresponding provisions of the State / Union Territory Goods and Services Tax Acts] for the Financial year ending on 31st March 2018.

Dear Sir,

We are pleased to inform you that vide Resolution of the Board of Directors dated ….. * your firm has been appointed as GST Auditors of our The company carrying the business under the name and style as (Name of the client and address and GSTIN) for conducting the audit under section 35(5) and section 44(2) of the CGST Act read with Rule 80(3) of the CGST Rules [read with the corresponding provisions of the State / Union Territory Goods and Services Tax Acts] for the previous year ending on 31st March 2018

The remuneration for conducting the said audit is fixed at Rs .......... inclusive of all applicable taxes, out of pocket expenses such as traveling, conveyance, etc.,

Kindly confirm your acceptance for the above appointment.

For ……………………

Authorised Signatory

Name and Signature

GST Portal to implement the new ITC set off rule from 11th Jun 2019.

Background

CBIC has amended sec. 88A to alter the mechanism of ITC setoff. i.e. IGST credit has to be completely utilized before utilizing the CGST and SGST Credit. However the same was not implemented on the GST Portal due to some technical reasons.

Update

Now GSTN shall enable the utilization of ITC as per the newly inserted rule 88A of CGST Rules from 11th June 2019 which is likely to be used for payment of taxes of May 2019 GSTR 3B return.

So at the time of setoff of liability, the portal first utilize IGST ITC for payment of IGST liability. then IGST ITC for payment of SGST or CGST liability in any order. 

			Set off
Particular	Liab	Credit	IGST ITC	CGST ITC	SGST ITC
IGST	100	200	100
CGST	100	60	50	50
SGST	100	60	50		50

Carry forward SGST ITC 10 and CGST ITC 10.

Note: It IGST Credit could have been used as 60 against CGST and 40 against SGST as well.

No GST on Seed Certification Tags : Circular 100/19/2019

No GST on Seed Certification Tagging: GST Circular

The process of seed testing and certification followed in the state of Tamil Nadu, as prescribed in the Seeds Act, 1966 and elaborated in the Manual on Seed Production and Certification, published by Centre for Indian Knowledge Systems, Chennai, involves the following steps: 

a. Application for seed production

b. Registration of sowing report

c. Field inspection 

d. Seed processing

e. Seed sample and seed analysis

f. Tagging and sealing

At the end of the process, approved seed lots are tagged with certification tag. The entire process is carried out by statutory bodies for some consideration. e.g. Rs. 30 to 100 for each stage. There was a dilemma about GST Applicability on tagging charges.

Circular 100/19/2019 clarifies that All the above charges, including those for issue of seed certificates/tags by the Seed Certification Agency of Tamil Nadu and Uttarakhand to the seed producing organization/ companies are collected for the composite supply of seed testing and certification, which is exempt under Notification No. 12/2017-Central Tax (Rate) Sl. No. 47 (services by Central/State Governments by way of testing/certification relating to the safety of consumers and public at large, required under any law). This clarification would apply to the supply of seed tags by seed testing and certification agencies of other states also following similar seed testing and certification procedure.

Sharing of Data by Income tax Department with GST Department: CBDT Order

CBDT collaboration with CBIC or E-filing Income tax collaboration with GSTN

"Control on Tax Evasion is all about Reconciliation and matching."

Earlier GST department has asked the taxpayers to reconcile the GSTR 1 Vis-a-Vis GSTR 3b and GSTR2A Vis-a-Vis GSTR 3B data.

Now CBDT has issued an order that the Income-tax department shall share the ITR data with the GST Department in order to facilitate the GST department to compare the various parameters such as Turnover, Gross total Income, Turnover Ratio, Turnover Range, etc.

The order specifies three types of data to be shared:

1. Request Based:

In such case the following data shall be shared by CBDT with GST Department on the basis of a specific request from GST Department:

a. Status of filling ITR

b. Turnover

c. Gross Total Income (GTI)

d. Turnover Ratio

c. GTI Range

d. Turnover range

e. Any other field as decided by concerned authorities

2. Spontaneous Exchange of Data:

Modalities of which is yet to be decided by concerned authorities.

3. Automatic Exchange of Data:

In such a case, Certain data will be shared on auto mode basis. Modalities of which is yet to be decided by concerned authorities.

Some years ago when the Direct tax department went online for most of the transactions, very few would have imagined that department will leverage the benefits of going online to such extent. Whereas the GST has born on an online platform (GSTN) only is bound to take all the advantages of its era.

The taxpayer will have to be very cautious while filling the returns to make sure the synchronization between the GST and Income tax data in order to avoid any notice from either of the department. More than the taxpayer I would say, It is the tax practitioner's Task to make sure that everything is reconciled.

“...but in this world, nothing can be said to be certain, except death and taxes.” 

― Benjamin Franklin

Only ONE Return for Composition Scheme tax payer, Tax Payment quarterly.

To give effect to the decisions taken during the GST Council meeting, Notification No. 20/2019 Central Tax has been issued by CBIC to give effect to the following:

Only one return for composition Scheme taxpayer, Tax payment quarterly:

Rule 62 has been amended to give an effect that Composition taxpayer (Either registered u/s 10 or availing benefit of notification no. 2/2019 (Central tax Rate)) will have to file GSTR 4 only on annual basis on 30th April following the end of the Financial year e.g. For FY 2019-20 GSTR 4 has to be filed by 30th April 2020. 

However, tax is required to be paid in Form GST CMP-08 on a quarterly basis on 18th of the month following the end of the quarter.

If any person opts out of Composition Scheme, he has to pay tax for the relevant quarter on 18th of the following month.

e.g. If any taxpayer opts out of composition Scheme w.e.f. 31st August 2019, he has to pay tax for Jul and Aug 2019 in GST CMP-08 by 18th Oct 2019.

GST CMP 08

Note:

1. Even if No tax liability is there, NIL statement GST CMP - 08 has to be filed.

2. Negative values have to be reported as such. If the total tax payable becomes negative, the same has to be carried forward to the next period. This is in case of adjustment on account of a Debit/Credit note.

3. Since GST CMP - 08 is just a statement & not return and nothing expressly specified related to late fees of GST CMP - 08, in our opinion late submission of the same will attract only interest and not late fees.

4. GST CMP - 08 is a basic statement containing Outward supplies, Inward supplies with tax liabilities as can be seen from above.

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Return filing requirement in case of Revocation of cancellation of Registration.

CBIC has issued Circular 99/18/2019 - GST providing clarification on the return filling requirements in case of revocation of cancellation of registration.

If any taxpayer's registration has been cancelled on account of non-filling of returns, there are two possibilities of such cancellation:

Case 1. The registration is cancelled as of current date.

Case 2. The registration is cancelled as of the date of filing of last return.

Case 1: In the first case where the registration is cancelled with effect from the current date, the taxpayer has to file the GST returns upto the date of cancellation before applying revocation of cancellation of registration. and the remaining returns (up to date) should be filed within 30 days of revocation of cancellation of Registration.

e.g. If any tax payer has filed Returns upto Jul 2018. His registration has been cancelled with effect from Dec 2018. He has applied for revocation of cancellation in April 2019.

In such -

Case 2.: He has to file his all returns till Dec. 2019 before applying for revocation of cancellation.

He has to submit all returns from Jan 2019 to Apr 2019 within 30 days of order for revocation of cancellation of registration.

In the Second case where the registration has been cancelled retrospectively from the date of filing last return, the tax payer has to file all the remaining returns within 30 days of revocation of cancellation of registration.

If any tax payer has filed Returns upto Jul 2018. His registration has been cancelled with effect from Jul 2018. He has applied for revocation of cancellation in April 2019.

In such -

He has to submit all returns from Aug 2018 to Apr 2019 within 30 days of order for revocation of cancellation of registration.

Clarification Regarding Confusion on Utilization of IGST Credit (Sec. 49A Vis a Vis Rule 88A Vis a Vis GST Portal).

Background

Initially when the GST Amendment Act 2018 was implemented w.e.f. 1st Feb 2019, one of the highlighted issue was newly inserted Sec. 49A. Which had changed the order of utilization of the IGST credit.

Later on, Rule 88A was inserted to nullify the adverse effect of Additional Cash Blockage of Section 49A which allowed to the utilization of IGST credit first against IGST liability and then in any order against CGST liability or SGST liability.

The Circular 98/17/2019 clarifies the following two things:

1. IGST credit, after utilization against IGST Liability, may be utilized in any order, even in part, against CGST liability and SGST liability.

2. The portal currently supports the pre-amendment order of IGST Credit utilization, i.e. credit utilization before Section 49A and 49B. The taxpayer may continue to utilize the Input tax credit in accordance with the functionality available on Portal.

Revocation of Cancellation of the registration even after expiry 30 days of Notice. - Order No. 5/2019

GST department had cancelled a large number of GST registrations on Suo Motto basis on account of non-filing of returns. According to Sec 30(1) taxpayer may apply for Revocation of cancellation of GST Registration within 30 days of receipt of the notice.

Order further states that "the GST being a new law, the taxpayer may not be familiar with the manner of service of notice by email or available on the portal".

Hence, If any taxpayer's registration has been canceled Suo Motto, and 30 days has also expired, the person may still apply for revocation of cancellation up to 22nd July 2019.

Due Date of GSTR 1 and GSTR 7 for the month of March 2019 is extended - Notification 17 and 18

Due date of GSTR 1 and GSTR 7 Extended.

1. CBIC has extended the due date of GSTR 1 for the month of March 2019 to 13th April 2019 - Notification No. 17/2019 - CT


2. CBIC has extended the due date of GSTR 7 for the month of March 2019 to 12th April 2019 - Notification No. 18/2019 - CT

Clarification regarding Option to pay tax under notification 2/2019 - Composition Scheme for Service Provider.

Clarification regarding Composition Scheme for Service provider

With Respect to the option to pay tax under Notification 2/2019 CT (Rate) - i.e. Composition Scheme for Service provider where the service provider has to pay tax at Flat 6% without availing any input tax credit, CBIC has issued following clarifications vide circular No. 97/16/2019-GST

1. If the registered person wants to opt for the composition scheme of Service provider as per notification no. 2/2019 CT (Rate), will have to file GST CMP-02 latest by 30th April 2019 on the portal.

2. For a new registration, the option to opt for the scheme will be available in GST Reg-01 at sr. No. 5 and 6.1(iii).

3. Once option exercised, it shall be deemed to be applicable to all the registration under the same PAN.

4. The option to pay tax by availing benefit of the said notification shall be effective from the beginning of the year or from the date of Registration.

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Reduced GST Rate for Residential Real Estate projects - Summary of all related Notifications.

GST On Residential Real Estate Projects

To implement the decisions made during the various GST Council meeting on issues related to GST rate for real estate Sector, The CBIC has issued notification multiple notifications. This article explains the effect of these notifications in simple language.

 (Notification 3-2019 CGST Rate)

Particulars	Effective Rate of GST	Applicable rate after abatement for value of land
Construction of Affordable Houses (See Note 1)	1.50% (Without ITC)	1% (Without ITC)
Construction of other than Affordable Houses	7.50% (Without ITC)	5% (Without ITC)

General Notes:

1.    Meaning of Affordable Houses shall be:

For Metro cities	a.     Value Should be Rs. 45 Lakhs or less And b.     Carpet Area of the house should not be more than 60 meters
For other than Metro Cities	a. Value Should be Rs. 45 Lakhs or less And b. Carpet Area of the house should not be more than 90 meters

Note: Metropolitan cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (the whole of MMR) with their respective geographical limits

2.    No Input tax credit shall be available.

3.    This is compulsive scheme for any projects starting from 1^st April 2019.

4.    Gross amount for this purpose shall include following:

a.     Cost of Construction

Any other amount charged by the promoter from the buyer of the apartment including preferential location charges, development charges, parking charges, common facility charges etc.

5.    Issues related to Input tax credit has been explained in details with illustrations in the notification itself.

Notes about the ongoing projects:

6.   For ongoing projects the Promoter may opt for the above scheme or continue to pay the tax as per the old scheme with ITC. i.e. At 12% or 18% as the case may be.

7.     For Ongoing project, the Promoter will have to exercise one time option to pay tax as per the old scheme. If Promoter does not exercise the option, it will be deemed that the Promoter has opted for new scheme.

8.     Invoices for supply of the service can be issued during the period from 1st April 2019 to 10th May 2019 before exercising the option, but such invoices shall be in accordance with the option to be exercised.

Notes about the Purchase from Un-registered Dealer:

9.     Person falling under this scheme, i.e. Without ITC Scheme, 80% of the Inputs and Input Service have to be obtained from registered supplier only.

Exception:

a.     Development Rights

b.     Lease of Land

c.      FSI Including additional FSI

d.     Electricity

e.     Petrol

f.       Diesel

g.     Natural Gas

For this purpose Supply on which tax is paid on RCM is considered as purchase from registered supplier only.

10. Cement has to be purchased, in all cases, from Registered Supplier. If Cement is Purchased from un registered supplier, Tax at applicable rate will have to be paid by the Promoter on RCM Basis.

11. In case there is a shortfall of 80% of purchase of goods or service from registered supplier, On such shortfall the Promoter will have to pay tax at 18% on Reverse charge basis.

e.g.

Total Purchase	Rs. 100,000/-
80% of the total Purchase	Rs. 80,000/-
Actual Purchase from Registered supplier	Rs. 70,000/-
Short fall of Purchase from Registered Supplier	Rs. 10,000/-
Tax to be paid at 18% on RCM basis (10000 x 18%)	Rs.1,800/-

12. The Promoter shall have to maintain project wise account of Inward supplies from registered person and unregistered person. The shortfall shall be calculated at the year end.

The Promoter shall have to file a Form in which details of such shortfall will have to disclose.

13.Development rights, long term lease of land, or FSI sold by un-registered person to promoter shall be liable for tax under RCM. Promoter shall be liable to pay tax at 18% on such charges under RCM.

Notes Related to Sale of FSI or Transfer of Development Right or Lease:

14. GST shall be exempt on FSI or transfer of Development right or long term lease of more than 30 years Provided :

The promoter shall be liable to pay tax at applicable rate on RCM basis on such proportion of value of:

a.     Transfer of Development Right

b.     FSI

c.      Long term lease

In respect of unsold units on the date of completion certificate or first occupancy. The rate of RCM is 1% for affordable housing and 5% for other than affordable housing. Notification No. 04/2019- Central (Rate)

15.       GST on FSI or Transfer of development rights or long term lease other than mentioned in point no. 14 shall be payable by promoter on RCM basis.(Notification No. 5/2019 – Central Rate)

16.  Liability to pay GST on FSI or Transfer of Development Rights or long ter lease other than mentioned in point no. 14 shall arise on the date  of issuance of completion Certificate or on its first occupation, whichever is earlier. (Notification No. 6/2019 – Central Rate)

17.  For following cases GST shall be payable by promoter in case of purchase from unregistered supplier (Notification No. 7/2019 – Central Rate)

a.     Shortfall from 80% of purchase from registered supplier

b.     Cement

c.      Capital Goods used for the Project

18. GST rate shall be 18% for shortfall of purchase from registered person from 80% other than cement and capital goods. (Notification No. 8/2019 – Central Rate)

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