Do you have a question?

Here are answers to most frequently asked questions.

FAQ's

What are some of the key challenges?

Quality of data, addressing errors and reconciliation of returns, synchronization with Goods and Services Tax Network (GSTN) and timely and appropriate credits for managing impact on working capital.

What is the impact of GST compliance on businesses?

GST Compliance is top of the agenda for companies big or small. Change from onetime filing to continuous/monthly filing of taxes with government, it requires high degree of accuracy and more efforts. Complete shift with respect to filing of taxes from traditional paper and offline filing to online and digital form of filing. Maintaining non-core system / applications for filing taxes.

Who are GSPs and how will they help in effective compliance of GST?

The GST Suvidha Providers or GSPs are licensed and authorized by the Goods and Services Tax Network (GSTN) of the Government to connect to the GSTN using the published APIs GSP’s will facilitate taxpayers in uploading securely GST returns in a prescribed format GSPs can customize products that address the compliance needs of different segment of users

Who are ASPs and what will be their role?

ASPs are Application Service Providers ASP functionality will be to prepare monthly and annual GST returns basis taxpayer data, enable reconciliation of returns for appropriate and timely credits ASP will file returns for taxpayers through authorized GSPs

What is the objective of using a GSP-ASP?

Primary objective of ASP-GSP is to ensure compliance and governance under the GST regime, which will require deep domain and technology knowledge. ASPs’ drive long term service subscription model to provide the tax filing and managing the reconciliation process. Organizations must recognize the value of the service of ASP as data sharing must comply to maintaining privacy, reliability and control.

What is the scope of ‘supply’ under the GST law?

The term ‘supply’ is wide in its import covers all forms of supply of goods or services or both that includes sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. It also includes import of service. The model GST law also provides for including certain transactions made without consideration within the scope of supply.

Different companies have different types of accounting software packages and no specific format are mandated for keeping records. How will department be able to read into these complex software?

As per Section 153 of the CGST/SGST Act, having regard to the nature and complexity of a case and in the interest of revenue, department may take assistance from an expert at any state of scrutiny, inquiry, investigation or any other proceedings

Is there any provision in GST for tax treatment of goods returned by the recipient?

Yes, Section 34 deals with such situations. Where the goods supplied are returned by the recipient, the registered person (supplier of goods) may issue to the recipient a credit note containing the prescribed particulars. The details of the credit note shall be declared by the supplier in the returns for the month during which such credit note was issued but not later than September following the end of the year in which such supply was made or the date of filing of the relevant annual return, whichever is earlier. The details of the credit note shall be matched with the corresponding reduction in claim for input tax credit by the recipient in his valid return for the same tax period or any subsequent tax period and the claim for reduction in output tax liability by the supplier that matches with the corresponding reduction in claim for ITC by the recipient shall be finally accepted and communicated to both parties.

What is meant by Reverse Charge?

It means the liability to pay tax is on the recipient of supply of goods and services instead of the supplier of such goods or services in respect of notified categories of supply.

Is the reverse charge mechanism applicable only to services?

No, reverse charge applies to supplies of both goods and services, as notified by the Government on the recommendations of the GST Council.

What will be the implications in case of receipt of supply from unregistered persons?

In case of receipt of supply from an unregistered person, the registered person who is receiving goods or services shall be liable to pay tax under reverse charge mechanism.

What will be the effective date of registration?

Where the application for registration has been submitted within thirty days from the date on which the person becomes liable to registration, the effective date of registration shall be the date on which he became liable for registration. Where an application for registration has been submitted by the applicant after thirty days from the date of his becoming liable to registration, the effective date of registration shall be the date of grant of registration. In case of a person taking registration voluntarily while being within the threshold exemption limit for paying tax, the effective date of registration shall be the date of order of registration.

What is the purpose of Compliance rating mechanism?

Where the application for registration has been submitted within thirty days from the date on which the person becomes liable to registration, the effective date of registration shall be the date on which he became liable for registration. Where an application for registration has been submitted by the applicant after thirty days from the date of his becoming liable to registration, the effective date of registration shall be the date of grant of registration. In case of a person taking registration voluntarily while being within the threshold exemption limit for paying tax, the effective date of registration shall be the date of order of registration.

Is there any facility for digital signature in the GSTN registration?

Tax payers would have the option to sign the submitted application using valid digital signatures. There will be two options for electronically signing the application or other submissions- by e-signing through Aadhar number, or through DSC i.e. by registering the tax payer’s digital signature certificate with GST portal. However, companies or limited liability partnership entities will have to sign mandatorily through DSC only. Only level 2 and level 3 DSC certificates will be acceptable for signature purpose

Import of Goods is conspicuous by its absence in Section 7. Why?

Import of goods is dealt separately under the Customs Act, 1962, wherein IGST shall be levied as additional duty of customs in addition to basic customs duty under the Customs Tariff Act, 1975.

Are self-supplies taxable under GST?

Inter-state self-supplies such as stock transfers, branch transfers or consignment sales shall be taxable under IGST even though such transactions may not involve payment of consideration. Every supplier is liable to register under the GST law in the State or Union territory from where he makes a taxable supply of goods or services or both in terms of Section 22 of the model GST law. However, intra-state self-supplies are not taxable subject to not opting for registration as business vertical.

What are inter-state supplies and intra-state supplies?

Inter-state and intra-state supplies have specifically been defined in Section 7(1), 7(2) and 8(1), 8(2) of the IGST Act respectively. Broadly, where the location of the supplier and the place of supply are in same state it will be intra-state and where it is in different states it will be inter-state supplies.

How will tax liability on a mixed supply be determined under GST?

A mixed supply comprising two or more supplies shall be treated as supply of that particular supply which attracts the highest rate of tax.

What is meant by zero rated supply under GST?

Zero rated supply means export of goods and/or services or supply of goods and/or services to a SEZ developer or a SEZ Unit.

Will import of services without consideration be taxable under GST?

As a general principle, import of services without consideration will not be considered as supply under GST in terms of Section 7. However, import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business, even without consideration will be treated as supply in terms of Sl. No.4 of Schedule I.

What is the linkage between GSTN and the authorized Banks?

There will be real time two-way linkage between the GSTN and the Core Banking Solution (CBS) of the Bank. CPIN is automatically routed to the Bank via electronic string for verification and receiving payment and a challan identification number (CIN) is automatically sent by the Bank to the Common Portal confirming payment receipt. No manual intervention will be involved in the process by any one including bank cashier or teller or the tax payer.

What are the main features of GST payment process?

The payment processes under GST Act(s) have the following features: • Electronically generated challan from GSTN Common Portal in all modes of payment and no use of manually prepared challan; • Facilitation for the tax payer by providing hassle free, anytime, anywhere mode of payment of tax; • Convenience of making payment online; • Logical tax collection data in electronic format; • Faster remittance of tax revenue to the Government Account; • Paperless transactions; • Speedy Accounting and reporting; • Electronic reconciliation of all receipts; • Simplified procedure for banks • Warehousing of Digital Challan.

How can payment be done?

Payment can be done by the following methods: (i) Through debit of Credit Ledger of the tax payer maintained on the Common Portal – ONLY Tax can be paid. Interest, Penalty and Fees cannot be paid by debit in the credit ledger. Tax payers shall be allowed to take credit of taxes paid on inputs (input tax credit) and utilize the same for payment of output tax. However, no input tax credit on account of CGST shall be utilized towards payment of SGST and vice versa. The credit of IGST would be permitted to be utilized for payment of IGST, CGST and SGST in that order. (ii) In cash by debit in the Cash Ledger of the tax payer maintained on the Common Portal. Money can be deposited in the Cash Ledger by different modes, namely, E-Payment (Internet Banking, Credit Card, Debit Card); Real Time Gross Settlement (RTGS)/ National Electronic Fund Transfer (NEFT); Over the Counter Payment in branches of Banks Authorized to accept deposit of GST.

When is payment of taxes to be made by the Supplier?

Payment of taxes by the normal tax payer is to be done on monthly basis by the 20th of the succeeding month. Cash payments will be first deposited in the Cash Ledger and the tax payer shall debit the ledger while making payment in the monthly returns and shall reflect the relevant debit entry number in his return. As mentioned earlier, payment can also be debited from the Credit Ledger. Payment of taxes for the month of March shall be paid by the 20th of April. Composition tax payers will need to pay tax on quarterly basis.

Whether time limit for payment of tax can be extended or paid in monthly installments?

No, this is not permitted in case of self-assessed liability. In other cases, competent authority has been empowered to extend the time period or allow payment in instalments. (Section 80 of the CGST/SGST Act).

Which date is considered as date of deposit of the tax dues – Date of presentation of cheque or Date of payment or Date of credit of amount in the account of government?

It is the date of credit to the Government account.

What is a tax liability register?

Tax Liability Register will reflect the total tax liability of a taxpayer (after netting) for the particular month.

What are E-Ledgers?

Electronic Ledgers or E-Ledgers are statements of cash and input tax credit in respect of each registered taxpayer. In addition, each taxpayer shall also have an electronic tax liability register. Once a taxpayer is registered on Common Portal (GSTN), two e-ledgers (Cash &Input Tax Credit ledger) and an electronic tax liability register will be automatically opened and displayed on his dash board at all times.

What is a Cash Ledger?

The cash ledger will reflect all deposits made in cash, and TDS/TCS made on account of the taxpayer. The information will be reflected on real time basis. This ledger can be used for making any payment on account of GST.

Can a tax payer generate challan in multiple sittings?

Yes, a taxpayer can partially fill in the challan form and temporarily “save” the challan for completion at a later stage. A saved challan can be “edited” before finalization. After the tax payer has finalized the challan, he will generate the challan, for use of payment of taxes. The remitter will have option of printing the challan for his record.

What is an ITC Ledger?

Input Tax Credit as self-assessed in monthly returns will be reflected in the ITC Ledger. The credit in this ledger can be used to make payment of TAX ONLY and not other amounts such as interest, penalty, fees etc.

Can a challan generated online be modified?

No. After logging into GSTN portal for generation of challan, payment particulars have to be fed in by the tax payer or his authorized person. He can save the challan midway for future updation. However once the challan is finalized and CPIN generated, no further changes can be made to it by the taxpayer.

What is the linkage between GSTN and the authorized Banks?

There will be real time two-way linkage between the GSTN and the Core Banking Solution (CBS) of the Bank. CPIN is automatically routed to the Bank via electronic string for verification and receiving payment and a challan identification number (CIN) is automatically sent by the Bank to the Common Portal confirming payment receipt. No manual intervention will be involved in the process by any one including bank cashier or teller or the tax payer.

Is there a validity period of challan?

Yes, a challan will be valid for fifteen days after its generation and thereafter it will be purged from the System. However, the tax payer can generate another challan at his convenience.

What is a CPIN?

CPIN stands for Common Portal Identification Number (CPIN) given at the time of generation of challan. It is a 14-digit unique number to identify the challan. As stated above, the CPIN remains valid for a period of 15 days.

What is a CIN and what is its relevance?

CIN stands for Challan Identification Number. It is a 17-digit number that is 14-digit CPIN plus 3-digit Bank Code. CIN is generated by the authorized banks/ Reserve Bank of India (RBI) when payment is actually received by such authorized banks or RBI and credited in the relevant government account held with them. It is an indication that the payment has been realized and credited to the appropriate government account. CIN is communicated by the authorized bank to taxpayer as well as to GSTN.

What is the sequence of payment of tax where that taxpayer has liabilities for previous months also?

Section 49(8) prescribes an order of payment where the taxpayer has tax liability beyond the current return period. In such a situation, the order of payment to be followed is: First self-assessed tax and other dues for the previous period; thereafter self-assessed tax and other dues for the current period; and thereafter any other amounts payable including any confirmed demands under section 73 or 74. This sequence has to be mandatorily followed.

What does the expression “Other dues” referred to above mean?

The expression “other dues” means interest, penalty, fee or any other amount payable under the Act or the rules made thereunder.

What is an E-FPB?

E-FPB stands for Electronic Focal Point Branch. These are branches of authorized banks which are authorized to collect payment of GST. Each authorized bank will nominate only one branch as its E-FPB for pan India Transactions. The E-FPB will have to open accounts under each major head for all governments. Total 38 accounts (one each for CGST, IGST and one each for SGST for each State/UT Govt.) will have to be opened. Any amount received by such E-FPB towards GST will be credited to the appropriate account held by such E-FPB. For NEFT/RTGS Transactions, RBI will act as E-FPB.

Can I upgrade my subscription?

Yes, as on when your invoice volume increases or addition more companies or GSTNs, you can move to higher subscription

What happens to my data when I cancel my subscription?

Once you’ve cancelled the subscription, all your existing data will remain in read-only mode. f you wish to backup your data, you can export your data in CSV or XLS formats.

Will I get refund if I cancel during subscription period?

Yes, refund will be calculated on a prorated basis and monthly charges will be applied for already completed months and remaining amount will be refunded.

Will the cost of my subscription increase?

The cost of an annual subscription will not increase in the year you are subscribed. The cost of a month-month subscription can change. In this situation, when there is change you are notified in advance and are given the option to cancel or move another subscription.

Will businesses now be required to generate e-invoices on the GST portal or the e- invoice portal or the IRN portal?

  1. No.
  2. Businesses will continue to generate e-invoices on their internal systems – whether ERP or their accounting / billing systems or any other application.
  3. The e-invoicing mechanism only specifies the invoice schema and standard so as to be inter-operable amongst all accounting/billing software and all businesses.

Please clarify whether there the current e-invoice schema is for the invoice to be issued by Govt or has to be maintained in the IT system by the tax payer?

  1. The invoice schema has to be maintained and invoices generated using this schema by the taxpayer himself.
  2. The GST portal or Invoice Registration Portal (IRP) will NOT provide facility to generate invoices. IRP is only to report the invoice data.
  3. The ERP or accounting billing software or any other software tool to generate e-invoice of the seller shall only generate invoices.

Will there be separate invoice formats required for Traders, Medical Shops, Professionals and Contractors?

  1. No.
  2. Same e-invoice schema will be used by all kinds of businesses. The schema has mandatory and non-mandatory fields. Mandatory field has to be filled by all taxpayers. Non-mandatory field is for the business to choose. It covers all most all business needs and specific sectors of business may choose to use those non-mandatory field which are needed by them or their eco-system.

How long will the e-invoice generated would be available at the Government portal?

  1. It is again clarified that the e-invoice will not be generated at the GST portal.
  2. It will be generated only at the seller’s system – whether ERP or the accounting/billing system/other software tools of the seller.
  3. It will be uploaded into the GST ANX-1 only once it has been validated and registered by the invoice registration system.
  4. After it has been validated and is available in the ANX-1, it will be visible to the counter party in his ANX 2.
  5. Thereafter it will be visible and available for the entire financial year and archived.
  6. As far as data on IRP is concerned, it will be kept there only for 24 hours.

While all businesses generate invoice at the same time, how will the server react?

  1. The businesses will generate the invoice at their system and hence that will not impact the servers of IRP.
  2. The capacity of the system at IRP shall be built so as to handle the envisaged loads of simultaneous upload based on data reported in GSTR1 for last two years
  3. Subsequently, multiple invoice registrars will be made available that will be able to distribute the load for invoice registration.

Is it possible to auto populate fields of the e-invoice based on credentials entered? That way it can minimize data entry errors.

  1. Since the invoice generation is to happen at the business end, this can be built into the ERP or invoicing system of the seller. Most of such software provide this facility in the name of item master, supplier master, buyer master etc.

Will it be possible to add transporter details as well?

  1. The transporter details must be entered in the E-Way bill system only.

There are certain fields today which are optional and some mandatory. How are these to be used?

  1. The mandatory fields are those that MUST be there for an invoice to be valid under e-Invoice Standard.
  2. The optional ones are those that may be needed for the specific business needs of the seller/business. These have been incorporated in the schema based on current business practices in India.
  3. The registration of an e-invoice will only be possible once it has ALL the mandatory fields uploaded into the Invoice registration Portal (IRP).
  4. A mandatory field not having any value can be reported with NIL.

What is the maximum Number of line items supported by e-invoice?

The maximum number of line items per e-invoice is 100.

Does the e-invoice schema provide the maximum length of the various fields in the schema?

  1. Yes.
  2. Each field specification has been provided with the type of characters that are to be entered and its length as well.

What will be the threshold requirement for E-Invoicing applicability?

  1. This will be notified by the Government at the time of rollout.
  2. As already mentioned above, the rollout of the e-invoice mechanism will be in phases.

Will the e-invoice have columns to show invoice currency?

  1. Yes, the seller can display the currency. Default will be INR.

Whether the IRN is to be captured in the Supplier’s ERP?

  1. The IRN (hash) will be generated by GST System using GSTIN of supplier or document creator, financial year and the unique serial number of the document/invoice. The IRN can also be generated by the seller.
  2. The serial number of invoice will be unique for a GSTIN for a Fin Year and the same has to be captured by Supplier’s ERP.
  3. Supplier has to keep the IRN against each of its invoice. It will be advisable to keep the same in the ERP as invoice without IRN will not be a legal document.

Whether e-invoice generated is also required to be signed again by the taxpayer?

  1. Not mandatory. However, if a signed e-invoice is sent to IRP, the same will be accepted.
  2. The e-invoice will be digitally signed by the IRP after it has been validated. The signed e-invoice along with QR code will be shared with creator of document as well as the recipient.
  3. Once it is registered, it will not be required to be signed by anyone else.

Whether the facility of adding discount amount at line item-level would be mandatory in nature?

  1. The e-invoice has a provision for capturing discount at line item level.
  2. The discounting at line item level is to be mentioned only when and if it is applicable in the particular transaction.

Can the seller place their LOGO in the e-Invoice Template?

  1. There will NOT be a place holder provided in the e-invoice schema for the company logo.
  2. This is for the software company to provide in the billing/accounting software so that it can be printed on his invoice using his printer. However, the Logo will not be sent to IRP. In other words, it will not be part of JSON file to be uploaded on the IRP.

The current e-invoice template provides for total discount for all the products or services. Will this be possible in the e-invoice?

  1. There is a mechanism and placeholders to provide discounting on item level as well as total discounts on the invoice value.

There should be a space provided for the QR code to be placed.

  1. The QR code will be provided to the seller once he uploads the invoice into the Invoice Registration system and the same is registered there.
  2. Seller can at his option may print the same on Invoice.

Will we be able to provide the address and bill-to party and PAN details in the e-invoice?

  1. It will be possible to provide all these details in the placeholders provided in the schema.

12. Would the Supplier be allowed to issue his own invoice and if yes, will the Invoice number and IRN be required to be mentioned?

  1. Yes, the supplier will issue his own system’s invoice, in the standard e-invoice schema that has been published. Invoice number is a mandatory item under GST and hence for e-invoice.
  2. IRN (Hash) can be provided after the e-invoice has been successfully reported to the IRP. E-Invoice will be valid only if it has IRN.

Would the Supplier be allowed to issue his own invoice and if yes, will the Invoice number and IRN be required to be mentioned?

  1. Yes, the supplier will issue his own system’s invoice, in the standard e-invoice schema that has been published. Invoice number is a mandatory item under GST and hence for e-invoice.
  2. IRN (Hash) can be provided after the e-invoice has been successfully reported to the IRP. E-Invoice will be valid only if it has IRN.

13. The current e-invoice template provides for total discount for all the products or services. Will this be possible in the e-invoice?

  1. There is a mechanism and placeholders to provide discounting on item level as well as total discounts on the invoice value.

13. The current e-invoice template provides for total discount for all the products or services. Will this be possible in the e-invoice?

  1. There is a mechanism and placeholders to provide discounting on item level as well as total discounts on the invoice value.

13. The current e-invoice template provides for total discount for all the products or services. Will this be possible in the e-invoice?

  1. There is a mechanism and placeholders to provide discounting on item level as well as total discounts on the invoice value.

The current e-invoice template provides for total discount for all the products or services. Will this be possible in the e-invoice?

  1. There is a mechanism and placeholders to provide discounting on item level as well as total discounts on the invoice value.