Lipsa Bhut

GST Payment Due Date And Interest On Late Payment: Service and Goods Tax are an ambitious tax regime that has been applicable from 1st of July 2017 and made several indirect taxes subsumed into it. The Indian government has declared the due dates for the payment of GST.

The GST payment’s due date for general taxpayers is the 20th of next month, during the GST payment due date for composition scheme dealers is on the 18th of next quarter.

Category	Due Dates For GST Payment
General	20<th Day of the Following Month
Composition	18th Day of the Following Month of Quarter
Non-Resident	20th Day of the Following Month
Input Service Distributor	13th Day of the Following Month
TDS Deductor	10th Day of the Following Month
TDS Collector	10th Day of the Following Month

All about Late Fees Under GST

As per the GST laws, the late fee is an amount that is charged for a delay in filing GST returns. A prescribed late fee will be charged per each day of delay when a GST Registered business misses filing GST Returns within the specified due dates*. The late fee must be paid in cash, and the taxpayer cannot use the Input Tax Credit (ITC) available in the electronic credit ledger for payment of a late fee.

Also, the late fee is applicable for the delay in filing NIL returns. For example, an individual has to pay the late fee although there are no purchases or sales and no GST liability for declaring in GSTR-3B.

The late fee will be depending on the number of days of delay from the due date. GST returns in the GSTR-3B is filed on the 23rd January 2019, 3 days after the stated due date, which is 20th January 2019., the late fees will be calculated for those three days, and they should be deposited in cash. However, right now, the GST portal is aligned to charge a late payment only on GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-8, GSTR-7 and GSTR-9 only.

Amount of Late Fees Payable

For All The GST Returns (Except GST Annual Returns(GSTR-9))

In accordance with the GST Acts, for intra-state supplies, the late fee has to be paid under both the CGST and SGST Act as follows:

Name of the Act	Late Fee for Each Day of Delay
The Central Goods and Services Act of 2017	Rs. 25*
The Respective State Goods and Services Act of 2017 (or) Union territory Goods and Services Act of 2017	Rs.25*
Total Late fees to be paid	Rs. 50*
The law has decided on a maximum late fee of Rs 5,000. This implies that, the maximum late fees which the Indian Government can charge is Rs 5,000 for each return being filed under each Act.

As per the IGST Act, a late fee is equal to the sum of fees decided under both the CGST and SGST Act for inter-state supplies. Hence, the Late fee is:

Name of the Act	Late fees for each day of delay
Integrated Goods and Services Act of 2017	Rs. 50*
The law has decided on a maximum late fee of Rs 5,000. This implies that the maximum late fees which the Indian Government can charge is Rs 5,000 for each return being filed under each Act.

The Nil Return Filers Should Pay the Below Mentioned Late Fee

Name of the Act	For Nil Returns Filers Late fees for each day of delay
CGST Act	Rs. 10*
SGST Act	Rs. 10*
IGST Act	Rs. 20*

For Gst Annual Returns (GSTR-9)

Name of the Act	Late fees for each day of delay
The Central Goods and Services Act of 2017	Rs. 100*
The Respective State Goods and Services Act of 2017 (or) Union territory Goods and Services Act of 2017	Rs. 100*
Total Late fees to be paid	Rs. 200*
The law has decided on a maximum late fee of Rs 5,000. This implies that the maximum late fees which the Indian Government can charge is Rs 5,000 for each return being filed under each Act.

Rules and Regulations about GST Payment for Taxpayers

The electronic cash ledger is going to be credited if payment for interest, tax, penalty and fee has been made via credit card, internet banking, NEFT, RTGS. When the amount can be used for the payment of interest, penalty, tax which is remaining in the electronic cash ledger of the taxpayer

Payment for the GST PMT-06 form is made through challan, while the challan is only valid for 15 days. When the payment is completed successfully, a Challan Identification Number (CIN) is going to be generated. If the CIN is not generated in any particular case, then the taxpayer can file the Form GST PMT-07.

The online payments which are made after 8 pm will be credited on the same day to the account of the taxpayer. even though there will be no physical challan accepted for the GST payment, the challans will be generated from the gst.gov.in only for all the payments of taxes, penalty, fees, interest

For the payment of challan under the limit of 10000 rupees, it can be done in the counter with cheques, cash, demand draft through authorized banks, while payments exceeding the amount of 10000 will be collected by only digital mode.

Some Other Rules of the Challan

• Just immediately after creating CPI and common portal identification numbers, all the new challans can be edited or modified. If there are any needed changes in the amount, there must be a new challan generated. Also, if the challan contains incorrect data will expire automatically after 15 days.
• Every challan needs to be issued with a separate DD or cheque.
• A partially filled challan could be saved in the post-login mode and can be accessed again using the following path.
• Services – Payments – My Saved Challans. Maximum 10 challans can be saved on the GST portal with a validity time of 7 days.
• The system will restrict the generation of any new OTC challan if there is any unpaid OTC challan that has been generated with the tax period amount exceeding rupees 10000. The challan will get automatically cancelled or expire after the 7-day validity period.
• In RTGS transactions with RBI, there will be the use of UTR. The UTI must be linked. However, if in case the payment is not updated even after 2 hours on the landing page, there will be an option to link the UTR.
• On behalf of the taxpayer, a third party can make the payments.

Provisions for Electronic Credit Ledger

The amount must be credited to the Electronic credit ledger filed by the person in his Returns. Simultaneously, the amount stated in the electronic credit ledger could be used for only tax payments. Any differences in the electronic credit ledger should be brought to the notice of the officer through form GST PMT-04.

As per the following order, a taxpayer needs to discharge his tax duties:

• The self-assessed tax with other dues concerning the returns of previous tax periods.
• The self-assessment tax and other dues concerning the current text period.
• The payable amount under the rules and regulations also acts including demand stated in section 73 or 74.
• Late payment interest payable on GST.
• If the payment is not made within the due date, interest will be applicable at the rate of 18%.
• A rate of 24% interest will be helpful to the case when a taxpayer claims excess of input tax credit or makes a reduction in the output tax liability.

How to Deposit Late Fees with the Government?

The Late fee applicable is going to be calculated automatically by the GST portal when one submits the GST returns. The Late Fee payment must be made in cash separately for CGST, SGST and IGST in the separate electronic cash ledgers.

GST returns cannot be filed without clearing the payment of the Late fee. The late fee of the month includes the previous month’s late fee charged because of the delay in filing the return. Also, late payment or non-payment of GST will attract Interest.

All About Interest Under GST

An amount of interest is applicable on Late Payment of GST liability. The interest needs to be paid by every taxpayer who:

• Makes a delayed in GST payment, i.e., pays GST after the due date.
• Claims for an excess input tax credit
• Reduces the excess output tax liability

If GST payment is not made within the due dates of filing return, Interest at the following rates has to be paid:

Particulars	Interest
The tax paid after the due date	18% p.a.
The excess ITC Claimed or the excess reduction in Output Tax	24% p.a.

The Interest needs to be calculated from the next day from which tax was due. For example, if a taxpayer fails to make a tax payment of Rs. 10,000 for December 2017, and the due date was 20th January 2018.

If he decides to make the payment on the 20th February 2018, the interest applicable for the delay period (from 21st January till 20th February – 31 days) will be calculated as:

Rs.10,000 * 31/365 * 18% which is equal to Rs.153

Thus, it is essential to make tax payment and file GST Return within due dates.

Pocket Guide to GST: GST, a short form of the term Goods and Service Tax, was levied in India by the Government. This is a form of indirect tax that the Government started on July 1, 2017. The Government put on this tax on a ‘destination basis’; that is, the tax is collected where the good is ultimately consumed, irrespective of the length of the journey done by it. It is a form of value-added tax.

GST applies to all trading goods, manufacturing goods and is also applicable to services. Before this tax was levied, there were other taxes issued by the Government. Some of these are:

• Indirect taxes issued by the Central Government: Service tax, Central Surcharges, Excise Duties, etc.
• Indirect taxes issued by the State Governments: Luxury tax, Sales tax or Value Added Tax, Purchase tax, and so on.

But these taxes are no more applicable.

The Government primarily brought GST to provide freedom from the burden of multiple taxes. There were numerous confusions regarding the tax structure of the country, which GST looked forward to removing.

Commodities And Services On Which GST Is Not Applicable

• Natural Gas
• Alcohol
• Diesel
• Motor Spirit
• Turbine fuel for aviation
• Electricity
• Interest
• Wages and salaries
• Government fees, like fees for land registration.

Businesses Or Individuals Who Are Required To Register for GST

The GST Act gives a very comprehensive list of which businesses or individuals have to register themselves for GST. This includes E-commerce operators, input service distributors, people who deduct or collect taxes like TDS and so on. Individuals can choose to register themselves voluntarily.

Various GST Rates

GST was initially thought to be one for all. But due to various reasons, like inequalities of income, regional disparities, the rigid mindset of the people towards change, the one tax policy did not happen. The multiple rates are:

Different Rates for Taxpayers

• For manufacturers: 1%
• For traders: %
• For food suppliers: 5%

Different Rates for Different Goods

• For basic necessity items (wheat, milk, etc.): 0%
• For rough diamonds: 0.25%
• For heavy metals, like gold, silver: 3%
• For items like cashew, coal, medicines, etc.: 5%
• For notebooks, books, ketchup, processed food, etc.: 12%
• For industrial goods, CCTVs, electronic goods like set-top boxes, etc.: 18%
• For luxury goods like bikes, air conditioners, aerated drinks, refrigerator, etc.: 28%

Different Rates for Different Types Of Services

• Services like rented cabs, print media advertisements, railways and other transport services, etc.: 5%
• Popular services like travel by air in business class, or air-conditioned restaurants, etc.: 12%
• Services like outdoor catering or other services for which specific GST rates have not been mentioned: 18%
• Luxury services, like the services availed in hotels, or race clubs, or entertainment services like gambling or amusement and water parks, etc.: 28%

Most of the GST rates change continuously. All the majority of goods have either 5%, 12%, or at the maximum 18%, GST levied on them. Similarly, most of the services also have 18% GST levied on them. It is mostly the luxury goods and services that have been put under the highest taxes. There is also a provision for Cess in a few selected items.

A Note On GST Cess

A compensation Cess is also available to few goods and commodities. These few handpicked items are aerated water, tobacco, cigarettes, motor vehicles, etc. This compensation is available for a maximum of 5 years (from the date when GST starts).

Understanding The Differences Between The Three GST Types

The structure of GST in India is categorised under the following heads:

• SGST: State Goods and Service Tax
• CGST: Central Goods and Service Tax
• IGST: Integrated Goods and Service Tax

The state governments exercise the SGST. SGST applies to all the goods and services that are being distributed over the state. It is thus an ‘intrastate tax.

The Central Government exercises the CGST. CGST applies to the various goods and services being given in a state. CGST is also, thus, an ‘intrastate tax.

The IGST is a tax that the Central Government levies. This tax is levied on the various goods and services that are being served outside the state. Thus it is an ‘inter-state tax. This tax is also applicable to the import of products.

Mode of Transaction	GST Type	Example
Sale of goods and services within the state (Intra-state)	SGST + CGST	If a company is established in Mysore and supplies goods to Bangalore, then it is subjected to SGST and CGST
Sale of goods and services outside the state (Inter-state)	IGST	If a company is established in Mumbai, and supplies goods to Delhi, then it is subjected to IGST

Thus, for determining GST, the place of supply is very important. It is a place where the journey of a good or service terminates. In simpler words, it is the place where a good or service is being sold by the manufacturer and received by the recipient. If the recipient is registered for GST, then the place of supply will be his location itself. But if he is not registered, then the site of the supplier becomes the place of supply.

Example: A manufacturer based in Patna sells his manufactured good to a person located in Chennai. So Mumbai becomes the place of supply, and the entire sale of the product becomes an ‘inter-state sale because the recipient is in Chennai.

Calculating GST

The calculation of GST is straightforward. You can multiply the GST rate by the amount that is taxable.

Amount of GST = (Original cost * GST%)/100

So the final price at which the product is sold = Original cost + Amount of GST.

For example, the price of a product is Rs. 2000, and the GST applicable is 12%. The amount of GST will be thus, (2000*12)/100 = 240. So the final price is (2000 + 240) = Rs. 2240.

Why Is GST Beneficial?

GST will be of advantage to the masses for the following reasons:

• Minimising the cascading effect: The indirect tax system in India goes through cascading effect. One tax is imposed upon the other. If a manufacturer pays taxes on the raw materials, then a value-added tax is added to the finished product. So there becomes a double burden of the tax. With GST, this burden is reduced to a bare minimum.
• Provision for a single tax: Before 2017, numerous taxes were levied by both the centre and the states. The introduction of GST is like a standard map for them.
• Government revenue got a renowned boost: GST requires minimum authoritative monitoring. There is better transparency, and complying with the guidelines has never been easier. Thus, the Government’s revenue has become a lot easier, and the amount has increased manifold.

GST Invoice: An invoice, which is also referred to as a GST bill, is a record of goods sent or services rendered, i.e., all business transactions held between both parties, along with the amount due for payment. The details include the product name, description, quantity, details of the supplier, purchaser, the rate charged, discounts, terms of sale, etc.

GST invoice is of utmost importance because all other documents such as trial balance, P&L A/C and balance sheet are dependent on it for their respective updations.

A purchaser is eligible for claiming the input credit if and only if their GST invoice is duly updated and maintained in an orderly manner.

It is expected that every individual or organization will issue a GST invoice for any amount, but as per GST Act [Sec 31(3) (b)], there is no requirement for issuing a tax invoice when the value of the goods or services supplied is less than INR 200, under the following circumstances-

• If the concerned person is unregistered and
• If the concerned person does not require an invoice.

Notwithstanding, if the recipient mandatorily needs the Invoice, it must be issued irrespective of its amount.

What are the HSN Codes, and How is it Incorporated in the Invoice?

It has been compulsory from 1st April 2021 to mention the HSN Code in the GST invoice.

All the tax invoices should contain HSN digits, describe goods and tax rates specifically for better transparency, and avoid future litigations.

HSN Code is used for classification purposes in over 200 countries.

It is an internationally approved procedure to increase unanimity.

As per the HSN code system, goods have been grouped into a total of 97 different chapters.

The HSN is six digits long.

In the HSN code chapter, the heading of the goods and the sub-heading of the goods are represented respectively by the first two digits of the HSN code, the third and fourth digit of the HSN code and the fifth and sixth digit of the HSN code.

As per Notification No. 12/2017 – Central Tax dated 28th June 2017, the concerned person must show the HSN code on the Invoice as per the following established guidelines:

• Any person or organization owning less than Rs.1.5 crores annual turnover in the earlier business year will not be needed to display the codes on the Invoice.
• Any person or organization possessing Rs.1.5 crores to Rs.5 crores yearly turnover in the past financial year will be required to demonstrate the first two-digit of the HSN code on the Invoice.
• Any person or organization possessing more than Rs.5 crore as annual turnover in the preceding financial year should display the first two-digit and chapter heading of the HSN code on the Invoice. Therefore, to put it simply, only entities having more than Rs.5 crore of annual turnover will have to certainly display four digits of the codes as displayed in the Invoice.

When you are listing monthly GSTR-1, one will have to notify the HSN details in April month’s GSTR-1, which is to be filed in the month of May 2021.

Similarly, for filing quarterly GSTR-1, one needs to supply the details at four digits in April to June’ 21’21, GSTR-1, which is to be registered in July 2021.

With this change, one needs to state the HSN code at 6/4 digits mandatorily in the HSN summary, i.e., table 12 of GSTR-1. The “total value” in the HSN summary is replaced with “Rate of Tax”, meaning you need to furnish HSN-wise rate-wise details now.

There is also a fine of Rs. 50,000 for committing a mistake related to this particular scenario under section 125 of the GST.

Invoice Under GST in Case of Sales of Goods

The tax invoice under GST is sanctioned on or prior to removing goods from one place to another.

While goods are marketed on sale on approval or a SOR (sales or return), the concerned organization should declare the Invoice within six months from the day of departure of goods or when it is made sure that the actual supply goods have taken place.

When reverse charge liability is relevant, the Invoice is required to be issued on the date of receipt of goods or receipt of goods from the unregistered dealer.

If continuous supply or subsequent payments are involved, then the Invoice has to be raised on the receipt of payment.

Under the GST Act, the original Invoice is assigned to the purchaser of the goods or services, which is referred to as an original invoice for the recipient.

To be able to access the input tax credit on the purchase of goods or services, the original Invoice must have the purchaser.

The duplicate copy of the Invoice must be issued for transit to present as evidence when required by the GST officer during the transit movement. There is no need for a duplicate copy for the Transporter if the seller or provider of goods has received an invoice number from the respective GST portal.

Every wholesaler registered under the GST Act is assumed to keep one copy of an invoice for their account and mandatorily obtain a unique invoice number from the GST portal for each stock of goods.

Invoice Under GST in Case of Providing Services

A registered person supplying taxable services before or subsequent to the provision of service but within a designated period is expected to issue a taxable invoice.

As per Section 31 of CGST Act 2017, for tax invoice to be deemed valid, it should definitely have the following details

• The description of the service
• Value
• Tax charged thereon and
• Other particulars deemed to be essential

To summarize, a tax invoice must be issued at the earliest of any of the following time periods:

• Before the Terms of Service, or
• Inside 30 workdays from the terms of service

The original Invoice is assigned to the receiver. A buyer is entitled to the first Copy of the Invoice, which is identified as “Original for Recipient”.

The duplicate copy is booked for the supplier and is marked as “Duplicate for supplier”.

Specifics That Should Be Listed In The Tax Invoice

As per CGST Rules, 2017, the tax invoice issued must mention Information under the following 16 headings:

• The Name, address and GSTIN of the supplier
• Unique Tax Invoice number
• Day of issue
• The name, residential location and GSTIN of the recipient
• In case the recipient is not enrolled, and the amount surpasses Rs. 50,000, then the Invoice should contain:
• particulars of the recipient (name and address)
• address of delivery along with the state name and state code
• The HSN code of goods or accounting code of services as applicable
• Description of the goods or services or both (as applicable)
• Number of goods and unit or Unique Quantity Code
• The cumulative cost of the amount of goods/services or both
• The assessable value of the stocks of goods or services or both considering exemption or reduction, if any
• The appropriate percentage of GST
• Amount of tax applied (explicitly mentioning the division of amounts as per the rates of CGST, SGST, IGST, UTGST and cess)
• Area of supply along with the name of target state for inter-state transactions
• Transportation location in case it is different from the place of supply
• If GST can be adjusted on a reverse charge principle
• Signature of the supplier or their authorized representative

As per Rule 36(2) of CGST Rules, an enrolled individual or company shall be able to avail of input tax credit solely if one condition is met, i.e., all the relevant items are included in the stated document.

However, there are exceptions as well. If the said document does not have the specified papers but contains any of the following:

• The tax value which has been charged
• The description of goods sold or services used
• The total rate of supply of goods or services, or both as applicable
• GSTIN of the supplier and receiver
• Location of supply for inter-State supply

Such registered person may avail input tax credit.

Therefore, in case all of the relevant details are missing from a GST invoice, the ITC (Input Tax Credit) claimed on that Invoice must be reversed.

Mode of Publishing the Invoice

GST is issued either in triplicate or duplicate form based on the type of business or the supply of goods or services.

Case 1: Supply of Goods

• “Original for Recipient” is stamped on the Invoice issued by the consumer or receiver of the goods.
• The Duplicate copy that is assigned for the Transporter is labelled as “Duplicate for Transporter”
• The supplier maintains the triplicate copy, which is recorded as “Triplicate for Supplier.”

Case 2: Supply of Services

• “Original for Recipient” is printed on the Invoice allotted to the receiver of the relevant services.
• Duplicate Invoice is preserved by the supplier and is marked “Duplicate for Supplier.”

Revision of Invoices Issued before the Issue of Registration Certificate

There are always rooms for error.

Filing a GST invoice requires many scrutinies and even the smallest iota of negligence results in a wrongly printed Invoice. For such situations, a revision with the appropriate changes is necessary for the invoices.

All the modifications must be in accordance with the monthly returns. Few of the ways in which one can make the required modifications are as follows:

• The downward revision in prices of goods or services that are supplied,
• Upward revision in prices of goods or services that are provided,
• Change in the tax rate of the GST, and many more.

An upward revision can be carried out through a supplementary Invoice. Furthermore, one can do the downward revision using a credit note.

There may also be occasions where the Invoice might need a complete revision. Under such circumstances, a “revised” invoice is allotted.

In the present GST law, the government has not elaborately defined the updated invoices separately. Currently, all the enrolled taxpayer has the provisional GSTN ID Number.

After finishing with the basic conventionalities, the taxpayers will be given a formal registration number in the GST. The taxpayer having the invoices from the roll-out of GST until they get the standard GST ID number must issue a ‘revised’ invoice mandatory.

The Invoice must be in terms of the GST and must be mandatorily issued within 30 days from the date of the receipt of the original registration certificate.

Is There a Deadline for Issuing GST Invoices?

Yes, there is a specific deadline within which the GST bills have to be issued. Mentioned below are the time limits.

• The GST invoice has to be published on or prior to the day of delivery or removal for goods supplied.
• The GST tax invoice for the services provided must be released within 30 days of the service being rendered.
• If banks or financial institutions have provided any assistance, the valid GST invoice must be issued within 45 days of providing the service.

Bill of Supply as Contrary to Tax Invoice

As per Sec 31(3)(c) of CGST Act 2017, a listed individual or company supplying exempted products or services or both or paying tax under the terms of section 10 shall publish a bill of supply containing such specifications and, in such manner, as prescribed.

Thus, as per the combined version of the GST Act with GST guidelines, the Bill of Supply is to be issued by a registered supplier under the following heads:

• In case of the supply of exempted goods or services
• If the supplier is giving tax under a composition system

Like a tax invoice, a bill of supply need not be issued when the value of goods or services supplied is less than INR 200 unless the receiver insists on the bill.

Nevertheless, a consolidated supply statement should be maintained at the end of each business day pertaining to such supplies for which the bill of supply is not allotted.

However, the composition taxable person should not write the phrase “Composition taxable person, not eligible to collect tax on supplies” at the head of the supply bill.

Transportation of Goods Utilizing a Delivery Challan

Delivery challan is a certificate that is necessary to transport goods from one place to another when the transaction does not fall under supply under GST.

To make the difference between an invoice and a challan more detailed – an invoice is a bill of the sale-purchase transaction between seller and buyer in contrary to delivery challan, which is a note rendered by the dealer to the recipient about the transfer of goods and the status of the goods being dispatched without adjustment of GST.

A Delivery challan is issued for delivery of goods under the following situations:

• Supply of liquid gas when the quantity is not known to the supplier
• Shipment of goods for job work
• Shipment of goods when the transaction is not considered for tax invoice
• Other supplies as and when notified by the concerned authorities

Following are the Cases Where GST Delivery Challan is Must for the Transportation of Goods-

• Whether supplies are shipped or taken inside or outside the State on clearance for sale or return and are withdrawn before the supply, a Delivery Challan must always be issued at the departure time.
• Painters deliver their pieces of art to different galleries for presentation and auction purposes. If the artwork is bought, every individual agency can move the paintings with a delivery challan from one gallery to another within or outside of the State.
• If the items are being shipped out of India for an auction or on a consignment basis, per the CBIC Circular No. 108/27/2019-GST issued 18.07.2019, none of these exports is considered to be ‘supply’ or ‘export’ in nature. Such exports will be categorized for issuance of a Delivery Challan.
• When products are delivered in several vessels, the retailer can issue the full Invoice until the first contract is delivered. For any of the sequential consignments, a delivery challan must be incorporated and a referral to the Invoice.
• When one could not give the tax invoice at the time of the goods’ departure if delivered to the receiver, the need for delivery challan rises. The distributor will issue a tax invoice after transporting goods, per Rule 55(4) of the CGST and SGST Rules, 2017.

Delivery challans under GST must be in triplicate, according to Rule 55 (2) of the CGST Rules:

• The buyer’s original copy must be labelled as ORIGINAL FOR CONSIGNEE.
• DUPLICATE FOR TRANSPORTER should be written on the duplicate copy for Transporter.
• The seller’s triplicate copy should be labelled TRIPLICATE FOR CONSIGNER.

Designing the Tax Invoice In Accordance With The Demands Of An Organization

Organizations can make their GST tax invoices distinct and recognizable. Organizations can personalize GST bills in the following ways:

• It is possible to add the company’s logo, issuing the Invoice for clear brand recognition.
• The required authorized signatory field must be positively mentioned.
• Additionally, the name and address details of the issuing company can be specified on the official letterhead.

Companies are expected to obey these GST tax invoice requirement rules.

By implementing these rules, companies can guarantee that their GST bills are tax compliant and legitimately authentic.

The enforcement of the GST Act has made it obligatory for catalogued dealers to follow the necessary GST tax format, rules, and regulations.

It is advised to take note of these rules so that suppliers maintain them and do not default by providing any irrelevant or wrong information. Following the proper GST tax invoice requirements keeps the entire business transaction smooth and modernized and assures no legal troubles in the long run.

Composition Scheme Under GST: Under the GST law, a taxpayer pays tax at 5%, 12%, 18%, 28% and avails of CENVAT credit. Credit concerning central excise spent on purchasing any input for manufacturing or duty paid for the final product manufacturing. After the CENVAT is claimed, the balance tax amount is paid in cash to the government. All the procedural compliances are adhered to by using this method.

Previous tax systems used to have a lot of burden over compliance and legal formalities. To decrease such burden, a provision was brought under GST called the Composition Scheme at the time of registration. It is very similar to the composition schemes recognised in the previous VAT system in all states. It makes procedural compliance very easy by providing the taxpayer with the benefit of paying tax at a flat rate without declaring input credit.

Eligibility Criteria To Register Under Composition Scheme

• Dealers of goods can opt for a Composition scheme. Manufacturers are eligible for this scheme, except manufacturers of pan masala, tobacco and ice cream. Service providers do not qualify for this scheme, except restaurants that do not serve alcohol are eligible for the composition scheme.
• Persons with aggregate turnover less than ₹1.5 crores in the prior financial year are eligible under the composition scheme. The aggregate turnover is capped at ₹75 lakhs for persons belonging to Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Himachal Pradesh.

Aggregate turnover means the aggregate value of sales of all taxable and non-taxable supplies, exempt products and services, and export or interstate sales of goods and services by the person having the same PAN (Permanent Account Number). If an individual starts two firms and the firm’s combined turnover is more than the limit mentioned above, the person is ineligible for the composition scheme.

• If a person’s turnover in a financial year surpasses the limits mentioned above, then from such day, the composition scheme becomes void and the person from such day needs to pay tax under a standard system.
• If a person opts for the composition scheme, it is mandatory to register all his firms under the composition scheme. It is not allowed to record some of his firms under the composition scheme and some not. If any one of the firms loses eligibility for the composition scheme, all other firms will be ineligible.
• A person registered under the composition scheme is not allowed interstate sales of goods. Such a person is permitted for intra-state sales. It means the firm can sell goods only in the same state or union territory in which it is registered.
• A person should not sell goods through e-commerce portals like Flipkart, Amazon, Snapdeal etc., as a business through e-commerce indicates the firm is performing business on a large scale.
• Non-resident and casual taxable persons are not eligible to register under the composition scheme.

Different Rates Of GST Under Composition Scheme

Particulars	CGST	SGST	Total
Manufacturers	0.5%	0.5%	1%
All other Traders	0.5%	0.5%	1%
Restaurants not serving alcohol	2.5%	2.5%	5%

Restrictions Of Registration Under Composition Scheme

• Persons registered under the composition scheme are not eligible for interstate sales.
• Sales of exempted goods cannot be made by such a person.
• Net tax payable = Composition Rate multiplied by Turnover. Such persons are not entitled to the input tax credit.
• Such a person also breaks the input credit chain, and input tax credit cannot be passed. In other words, for another dealer who purchases goods/services from a composition dealer, then such dealer also cannot take the input tax credit. Therefore composition scheme is not suitable for wholesalers and B2B businesses.
• Such a person under the composition scheme cannot charge tax on the invoice issued separately.
• Sales through e-commerce portal like Flipkart or Amazon is not eligible under the composition scheme.
• Such person who purchases goods or services from un-registered persons and on import of services under reverse charge is liable to pay tax. Tax is being calculated using the standard GST rates. SGST and CGST will be applicable even if the purchase is made from outside the state.
• At the top of the supply-issued bill, the words “composition taxable person, not eligible to collect tax on supplies” should be mentioned.
• Notice or signboard displaying “composition taxable person” should be placed by the person at important places at his place of business and every other place or places of business.

Payment Of GST And GST Return

Persons registered under the composition scheme must file quarterly returns, and GST payment should also be made quarterly. Filing of monthly returns and monthly payments of GST is applicable for regular traders.

The due date of filing return and GST payment is 18 days from the end of the quarter. Quarterly return of such types is to be filed in Form GSTR-4. Form GSTR-4A should also be filled in with details of input supplies.

After the end of the financial year, an annual return is to be filed in Form GSTR-9A on or before 31st December.

Registration To GST Composition Scheme And Its Usefulness

• Reduction In compliance: Dealers registered under the composite scheme have to file quarterly returns and make payments quarterly, whereas regular dealers need to file monthly returns and make monthly payments. The work of record keeping decreases substantially.
• Reduction Of Cost To Customer: Under the composition scheme, the cost to the final customer decreases if the person has a high margin.

Example 

Basis	Normal Dealer	Composite Dealer
Purchase Price	50	50
GST @18%	9	9
Sale Price (excluding GST)	100	109
GST @18%	18	–
Composition fees (109*1%/0.99)	–	1.10
Cost to Customer	118	110.10

Here composition fees are assumed to be @1%. In the above example, both composite and regular dealers enjoy a margin of ₹50, but the composite dealer provides the final cost to the customer @9.33% less.

Registration Under Composition Scheme And Its Limitations

• Restriction Of Sales Through E-Commerce Portal Under the composition scheme, a registered person cannot sell through an e-commerce operator like Amazon, Flipkart, etc. This scheme is not for people who are performing online sales or wish to sell shortly.
• Interstate Sales Cannot Be Made: Interstate sales or sales to other union territories are not allowed, and only sales to the state or union territories his business is registered are permitted under the scheme. This, in turn, decreases the extent of the company.
• Hefty Amount Of PenaltyThe officer in charge may ask the person to pay tax at standard rates or penalty equal to tax amount to persons who are not eligible to register under the composition scheme but continue to do so. If a person makes an error in following the eligibility criteria already set, then he may be liable to a hefty penalty amount.
• Not Fit For Wholesaler: Persons who are wholesalers cannot pass the input tax credit, and therefore, no dealer would like to purchase from such a person. It would increase costs due to double taxation, and thus dealers refrain from purchasing from such persons.

Application Procedure for GST Composition Scheme

Procedure To Choose Option

Such a person who is registering directly under GST and wants to go for the composition scheme has to choose the option given in Part B of Form GST REG-01.

Such a person who has already registered and wants to choose a composition scheme has to file Form GST CMP-02 before the commencement of the financial year. The person also needs to file Form GST ITC-03 within sixty days from the start of the relevant financial year. Such intimations to be filed only once at the time of opting and not in all financial years.

The stock of goods held by him at the starting of the financial year should not be purchased from an unregistered person, and tax to be paid on such stock purchased from an unregistered person.

Effective Date for GST Composition Scheme Levy

The effective date is the commencement of the financial year for which due intimation is filed in Form GST CMP-02 for composition levy. In case such a person at the time of registration opts for the composition scheme, the effective date will be the date of registration. Such a person should note that if his registration under the composition scheme is not accepted, then for the sales he already made, he may be liable to pay tax at the total rate.

Wrongful Claim To Be Penalised

Suppose the GST officer detects that the person is ineligible for tax payment under the composition scheme but continues to pay tax under this scheme. In that case, the person will be charged tax at a standard GST rate and a penalty equivalent to such tax to be paid. The proper officer should issue A notice issued by the proper officer in Form GST CMP-05 to such defaulting person to show cause within fifteen days of the receipt of such intimation as to why the option for payment of tax under the composition scheme should not be denied. The reply from the person to be filed in Form GST CMP-06 and the order to be issued under Form GST CMP-07 within 30 days of such response by the proper officer.

Procedure Of Opting Out From The GST Composition Scheme

The person whose conditions do not satisfy eligibility criteria under this scheme has to pay tax at standard rates and issue tax invoices from the day such state ceases to be satisfied. He is also required to file a notice for withdrawal from the scheme in Form GST CMP-04 within seven days from the date the condition ceased.

The person who voluntarily wants to withdraw himself/herself from such scheme has to file Form GST CMP-04 before the withdrawal date.

Every person opting out and has filed GST CMP-04 or has been issued an order for withdrawal of scheme under GST CMP-07 needs to furnish GST ITC-01. The taxpayer needs to declare details of the stock of inputs and finished goods held in stock or semi-finished goods held by him on the date on which the scheme is denied or withdrawn. The declaration should be within 30 days, from the date from which the scheme is removed or from the date of order passed in FORM GST CMP-07, as the case may be.

A notice sent by the officer to any state or union territory for withdrawal of option shall be deemed a notice of withdrawal in respect of all other business places registered under the same PAN.

Withdrawal Of Composition Scheme By Proper Officer

When there are reasons for the GST officer to believe that the registered person is not eligible to pay tax under section 10 or he/she contravened the provisions of the CGST Act or the rules, a notice might be issued by him to the person through FORM GST CMP-05, within fifteen days to show cause as to why the option to pay tax under the composition scheme shall not be denied.

The person in return has to reply to the notice by filing Form GST CMP-06. The GST officer will issue an order in FORM GST CMP-07 within thirty days of receiving the reply from the person, either accepting or refusing the option of tax payable under section 10 from the date of choice the event concerning such violation, as the case may be.

Different GST Forms

Form Number	Due Date	Description
GST CMP-01	Before the appointment date or within 30 days of the appointed date	Notice to pay tax under section 10 to provisional GST registration holders (Only for persons from VAT system)
GST CMP-02	Before the commencement of the financial year	Notice to pay tax under section 10 for the normal taxpayer (GST registered)
GST CMP-03	Within 90 days of the application of the option	Notice to declare details of stock and supplies from registered as well as unregistered persons
GST CMP-04	Within 7days from the date of occurrence of an event	Notice for withdrawal from composition scheme
GST CMP-05	Any contravention	Notice of show cause for violation of tax payment rules or Act by the proper officer
GST CMP-06	Within 15 days from the receipt of notice	Response to the notice of show cause
GST CMP-07	Within 30 days from receiving the notice	Rejection or Acceptance of response to the notice of show cause

What is an e-Way Bill?: After the 26th GST Council meeting, the inter-state e-Way Bill implementation started on April 01, 2018.

For intra-state movement, the e-Way Bill was initiated from April 15, 2018, with activity in all the states by June 01, 2018.

• e-Way Bill or the Electronic Way Bill was started on February 01, 2018, for the inter-state movement of goods. A person or organization making transactions under the GST scheme must mandatorily generate an e-Way bill while transporting goods in a vehicle whose value exceeds Rs. 50,000 (Fifty thousand) on the official portal of ewaybillgst.gov.in.
• E-way bill contains the specifications of goods, GSTIN of the recipient, invoice number, invoice date, value of goods, HSN of goods, to name a few.
• Along with the formation of an e-Way Bill, a unique e-Way Bill Number (EBN) sequence of 12 digits is allocated simultaneously, and it is available to the supplier, recipient, and transporter.

Which Category of People or Company Is Required To Carry Out The Generation of an e-Way Bill?

• Under a situation where there is a transport or shipment of goods of more than Rs 50,000 in value to or from a registered person, an e-Way Bill must be generated essentially.
• There is also a possibility that, even when the value of the goods does not exceed Rs 50000, A Registered person or the transporter may choose to generate and carry an e-Way Bill. In that case, Part A of Form GST EWB-01 needs to be filled.
• An Unregistered person is also expected to generate an e-Way Bill. However, in the situation where an unregistered person makes a supply to a registered person, the recipient, i.e., the registered person, will be accountable for the production of the e-Way Bill.
• On condition that the supply is made via air, ship or railways, then the form in Part A of FORM GST EWB-01 must be filled in by the consignor or the recipient.
• Assuming that the goods are moved for a distance which is less than or equal to ten kilometers, within the same State/Union territory from the place of business of the consignor to the location of business of the transporter for farther transportation, the supplier or the transporter is not required to fill in the details of conveyance in Part B of FORM GST EWB-01.
• Transporters carrying goods by road, air, rail, etc., also need to generate an e-Way Bill if the supplier has not developed an e-Way Bill. In this case, one needs to fill the Part A of Form GST EWB-01.

Under What Circumstances Should an e-Way Bill be Issued?

The registered person must issue an e-Way Bill before starting the movement of goods where the value surpasses Rs. 50000. The value can be considered either individually or in aggregate of all invoices, whichever is applicable.

The movement of goods can be in either of these ways

• By way of supply
• Other than supply (means return, sale on approval basis, etc.)
• Inward supply from an unregistered person.

The term supply includes the following

• The sale which provides for the selling of goods and payment made
• Transfer included branch transfers
• Barter or Exchange is the situation where the amount is adjusted in terms of other goods in place of monetary transactions

However, under particular exceptional circumstances, despite the fact that the product value does not exceed Rs. 50000, it is included for the generation of an e-Way Bill. This category includes-

• Inter-State shipment of commodities by the Principal to the Job-worker
• Inter-State Transport of handcrafted goods by a seller who is not
• covered under the GST registration.

What are the Scenarios Under which the e-Way Bill is Exempted?

• Generation of an e-Way can be ignored in case the good value is within the threshold limit of Rs. 50000. (However, under points like the shipping of Handiwork goods and movement of goods concerning Inter-state Job work, e-Way Bill is a must.)
• In case the goods are being transported by a non-motorized vehicle like a horse-driven cart, the e-Way Bill is ignored.
• If Goods are being conveyed: –
  1. for clearance by the Customs from the airport, air cargo complex and land customs station to an inland container depot (ICD) or a container freight station (CFS)
  2. from ICD or CFS to a customs port, airport, air cargo, etc., under a particular customs bond.
  3. From one customs port or station to some other customs bond
• For Goods that are shipped following the customs surveillance or customs permit, the e-Way Bill tissue is spared.
• In case of goods transported within a stated area, the e-Way Bill issuance is forgiven.
• When the goods being transported are transition shipload from or to Nepal or Bhutan, there is no need to generate the e-Way Bill.
• If Goods are carried to a weighbridge within 20kms, and back to the transaction location utilizing a Delivery Challan, in that case, the issue of an e-Way Bill is not a must.
• When goods are transported by the Government or other concerned authorities by rail route as a consignor, there is no need to generate an e-Way Bill.
• In case Goods are transported to or from the Ministry of Defense, they are exempted from the issue of an e-Way Bill.
• Goods that are particularized as exempt from e-Way Bill claims in the respective State/Union territory GST Rule fall in this category.
• Shipping of goods treated as no supply as per Schedule III, Certain schedule to Central tax Rate notifications is treated for no issue of the e-Way Bill.

Goods Considered Under Exemption

The following goods are also considered under the exemption:

• Natural/cultural stones or pearls/precious stones.
• Kerosene Oil following PDS.
• Liquid petrol gas for the supply of household and non-domestic use.
• Jewellery
• Curd, Lassi, Any Milk product.
• Fresh or Pasteurized milk
• Fruits
• Vegetables
• Animals (Living), Plant, and trees.
• Animal flesh, meat
• Salt
• Rice or wheat flour does not contain a specific brand.
• Stationery products
• Unprocessed tea leaves

The Aims and objectives of an E-Way Bill

The chief purposes for the generation of an e-Way Bill are:

1. To have a single and unanimous e-Way bill system across the entire country.
2. To prevent any possible event of tax fraud and corruption.
3. Uninterrupted movement of vehicles across the boundaries.
4. Fast online and hassle-free verification ability from every corner in the country.

Benefits of E-Way Bill

1. There is no requirement for the taxpayers to visit sales tax like earlier to collect and submit it. They can easily avail the of online services from any place.
2. It further ensures untroubled and secured movement of vehicles. This, in turns, provides less waiting time at the check post to verify goods, making the entire procedure fast and concise.
3. Verification has become easier with almost no paperwork since the registration method can be done in the online mode.
4. The data uploaded on the official portal will get updated automatically in GSTR 1 monthly return, thus reducing the taxpayer’s workload to fill the details again.
5. Access to the E-way Bill is accessible without much trouble. It can be simply accessed through a single SMS or via logging into the online portal. To make things even faster, a mobile application has been launched accordingly.
6. some facilities allow the concerned taxpayer to make the datasheet offline and then upload the details online by means of the Bulk E Way Bill Generation option.

What is the Time Validity of the Issued e-Way Bill?

The of an e-Way Bill is computed from the exact day and time of the generation of the respective e-Way Bill-

• In the case of an Over dimensional cargo which has a distance of fewer than 20 km- under this, the validity of the e-Way Bill is for a single day. And for every extra length over 20 km or part thereof – the legitimacy extends for One additional day.
• For other vehicles apart from over-dimensional cargo with less than 200km, the validity extends to one day. Additionally, for each km that crosses the limit of 200 km, an extra day is added.
• Previously, the validity was accounted for 100 km, but currently, the distance has been extended to 200 km.
• One can also increase the validity of the E-way bill. Either four hours prior to expiry or within four hours after its expiry, the generator of the e-Way Bill can prolong the bill validity.
• The validity term of the e-Way Bill can be extended by the commissioner for specific classifications of goods, as defined in the notification issued in this respect.

How to Generate an e-Way Bill?

To generate an e-Way Bill, the applicant needs to follow the below-mentioned steps:

Step 1:

• At first, the applicant will have to log in to the official e-Way Bill portal system, i.e., ewaybill.nic.in.
• After successful login, they need to enter the Username, the respective password and the below given Captcha code in a box.
• Following the filling of all the credentials, the applicant needs to choose the Login option.

Step 2:

• After completion of the first step, the applicant will be redirected to a new page.
• That page will contain an option called the E-waybill on the top left-hand side.
• The applicant needs to click on the Generate new option from the drop-down menu.

Step 3:

• The next page will demand the credentials of the following fields:

1. Transaction Type
2. Sub-type
3. Document type
4. Document Number
5. Document Date

For filling the Transaction Type, the applicant needs to follow the given guidelines:

1. If the applicant is a supplier of consignment, in that case, they need to click on the option ‘Outward’.
2. If the applicant is a recipient of consignment, in that case, they need to click on the option ‘Inward’.

For filling the Sub-type, the applicant must follow the guidelines to Choose the relevant sub-type appropriate to them:

• If the transaction type selected by the applicant is Outward, then the following subtypes appear:
• Supply
• Export
• Job work
• SKD/CKD
• Recipient not known
• For own use
• Exhibitions or fair
• Line sales
• others

The applicant will have to choose the option as applicable for them.

• If the transaction type selected by the applicant is Inward, the following subtypes appear:
• Supply
• Import
• SKD/CKD
• Job work returns
• Sales returns
• Exhibition or fairs
• For own use
• Others

The applicant will have to choose the option as applicable for them.

The Following Needs to be Noted

SKD/CKD stands for Semi knocked down condition/ Complete knocked down condition.

• For filling the Document type, the applicant needs to select either of the following:
• Invoice
• Bill
• challan
• credit not
• Bill of entry
• others if not Listed
• For supplying the Document Number credentials, the applicant needs to Enter the document or invoice number, as applicable.
• The applicant needs to enter the date of Invoice or Challan or Document for the credentials of the Document Date.

One thing that needs to keep in mind is that the system does not permit the user to insert the future date.

• From/ To Depending on whether the applicant is a supplier or a recipient, they must enter the To / From section details.

In case the supplier or client is unregistered, they need to mention ‘URP’ in the field GSTIN, meaning that the supplier/client is an ‘Unregistered Person’.

If the addresses in ‘Bill to’ and ‘Ship to’ in an invoice or Bill do not point to the same taxpayers, i.e., in case they address different taxpayers, then two separate e-Way bills will be generated.

The first e-Way Bill is issued for the invoice, and the second e-way Bill generated is from ‘Bill to’ party to ‘Ship to’ party in terms of the invoice/ or Bill of the ‘Bill to’ customer.

The entire process of the transactions is complete, and the rate differs for various interstate shipments.

It is calculated as per the address mentioned in the e-Way Bill.

• For entering the Item Details, the applicant must Continue with the details of the consignment (HSN code-wise) in this section which includes:
• Name of the product
• Description of the item
• HSN Code of the product
• Quantity and unit of the product
• Value/Taxable value of the item
• CGST and SGST or IGST rates (in %) as applicable
• Tax rate of Cess (in %) if applicable

Based on the details listed in this section of generating the Bill, matching entries might be automatically registered in the corresponding GST Return while filing on the GST portal.

• The applicant needs to fill in the following details under the Transporter details section.
• The mode of transport, i.e., Road or rail or ship or air
• The estimated distance covered (in km) needs to be mandatorily mentioned.

Apart from the above, the applicant can also mention either of the details:

• Transporter name, transporter ID, transporter Doc. No. & Date.

OR

• Vehicle number in which consignment is being transported.

Format: AB12AB1234 or AB12A1234 or AB121234 or ABC1234

Also, for products, clients or customers, suppliers, and transporters that are used on a regular basis, the applicant needs first to refresh the ‘My masters’ section available on the login dashboard and then continue.

Step 4:

• After successfully filling in the previously mentioned credentials, the applicant must select the Submit option.
• The system checks the request and throws an error if any arises.
• After the request is processed without any errors, the e-Way Bill (Form EWB-01) is generated with a unique 12-digit sequence number.

Step 5:

• For printing the generated e-Way Bill, the concerned applicant needs to click on the ‘Print EWB’ option, which is available in the drop-down menu of the ‘e-Waybill’ option.
• After putting in the appropriate e-Way Bill number, a unique 12-digit number, the applicant needs to select the ‘Go’ button.
• The page then displays an option called the ‘Print’ or ‘detailed print’. After successfully selecting the option, the applicant will get the hard copy.

What is the procedure to generate an e-Way Bill if the goods linked to one particular invoice are being moved in multiple vehicles?

When the products are shipped in a Semi Knocked Down (SKI) or Completely Knocked Down (CKI) condition, the e-Way Bill is issued according to the delivery challans that have been issued for that portion of the project along with these guidelines:

• The supplier needs to issue the entire invoice document prior to the dispatch of the first shipment load;
• The supplier must essentially issue delivery challans for each and every one of the next consignments, along with a copy of the invoice issued under clause (a);
• Each consignment needs to be attached with the references of the relevant delivery challan in addition to a duly certified photocopy of the invoice;
• The last consignment should be accompanied by the original document of the invoice. The EWB must be essentially generated for each shipment based on the delivery challan details along with the corresponding vehicle number.

GST E-Way Bill Format

The E-Way Bill format in GST comprises two parts – Part A and Part B.

The Part A of the E-Way Bill in Form EWB 01 is meant for the details of the consignment, which includes details of the respective invoice. Accordingly, the following information needs to be mentioned.

• GSTIN number of the Recipient: The GSTIN number of the recipient needs to be mentioned compulsorily.
• Address of Delivery: The pin code of the location of delivery is mentioned in this section.
• Invoice Number or Challan Number: The Invoice or Challan number of the goods being delivered needs to be specified.
• Value of Goods: The amount against the goods needs to be mentioned.
• HSN Code: The HSN code of the goods is mentioned as per the rules mentioned below:
• In case the annual turnover is within INR 5 crores, then only the first two digits of the HSN code needs to be specified.
• If the annual turnover exceeds INR 5 crores, mentioning the four digits of the HSN code l suffice.is
• Reason for Transportation: The grounds have been already mentioned, and the applicant needs to select the reason as applicable from a drop-down menu.
• Identification number of the Transport Document: Any of these indicates this-
  • Goods Receipt Number
  • Railway Receipt Number
  • Airway Bill Number
  • Bill of Lading Number.

In Part B of Form EWB 01, the vehicle number in which goods are transported needs to be mentioned. The transporter is required to update this in the common portal.

List of States where Intrastate E-Way Bill is Applicable

• Andhra Pradesh
• Bihar
• Goa
• Jharkhand
• Kerala
• Madhya Pradesh
• Nagaland
• Puducherry
• Telangana
• Uttar Pradesh
• Arunachal Pradesh
• Chhattisgarh
• Haryana
• Jammu Kashmir
• Manipur
• Maharashtra
• Odisha
• Rajasthan
• Tripura
• Uttarakhand
• Assam
• Gujarat
• Himachal Pradesh
• Karnataka
• Mizoram
• Meghalaya
• Punjab
• Sikkim
• Tamil Nadu
• West Bengal

List of Union Territories Where Intrastate E Way Bill is Applicable

• Andaman & Nicobar
• Chandigarh
• Dadar & Nagar Haveli
• Daman & Diu
• Lakshadweep

Documents Required to Generate e-Way Bill

While registering for E Way Bill, the Transporter, Supplier and the Recipient should have the following mentioned documents:

• Invoice/Delivery Challan/Bill of Supply/ related to the goods consignment
• For transportation by Road – Vehicle number/Transporter ID, Part B of E-way bill has to be filed.
• For transportation by rail, air, or ship – Transporter ID, Transport document number, and date on the document

Penalties Enforced for Inability to Generate the e-Way Bill

The punishment for not generating an e-Way Bill results in either monetary or non-monetary losses to the taxpayer held responsible for the fault.

• Financial Penalty

For the non-generation of an E-Way bill, the concerned person carrying the goods should pay a penalty of Rs. 10,000 or the equivalent amount of tax evaded (the greater of the two).

• Seized or Detained

The vehicle that is carrying goods without an Eway bill can be seized or detained. The vehicle will be set free only after making the penalty and tax as set by the officer. Under this, there can be below mentioned situations:

• The owner must pay 100% of the tax payable if they wish to pay the penalty.
• Otherwise, the penalty will amount to 50% of the value of the goods.

What is the result when more than one project are transported in a single vehicle?

The person concerned with transporting the goods must make sure to generate a consolidated E-Way Bill in the Form GST EWB 02.

Furthermore, the person should separately designate the serial number of the respective E-Way Bill for each of the consignments.

What is the course of action in case the goods are transferred from one vehicle to another at the time of conveyance?

In advance of transferring the goods from one vehicle to another and consequently carrying out any such further movement of such goods, the transporter will have to update the details of movement in the e-Way Bill on the official portal in Form GST EWB 01.

When the consignment is transferred within a distance less than or equal to ten kilometers within the State or Union territory from the place of business of the transporter to the last location of business of the consignee, updating the details of conveyance in the E-Way Bill can be ignored.

What is the process of getting an Invoice Reference Number (IRN)?

An IRN number can be obtained by only a registered person.

They can receive an Invoice Reference Number from the official common portal by uploading a tax invoice issued to the concerned applicant in FORM GST INV-1.

The applicant is expected to produce the same for verification by the proper officer in place of the tax invoice. Such a number shall be valid for the next thirty days commencing from the date of uploading the previously mentioned document.

If the concerned applicant is already registered, then there is no need to upload the information in Part A of FORM GST EWB-01 to generate the e-Way Bill.

The information will be updated after acquiring data from the FORM GST INV-1.

What is the procedure for a taxpayer or recipient to know about the status of the e-Way Bills generated on their
GSTIN by some other person or party?

According to the established rules and guidelines, the taxpayer or recipient can always decline the e-Way Bill generated on the taxpayer’s GSTIN by other concerned parties. These are a few of the available options on the portal.

• The applicant can view it on the dashboard once they log into the official system.
• Next, the applicant in question will receive one SMS per day mentioning the total e-way bill activities currently present on the concerned GSTIN number.
• Furthermore, the taxpayer can further select the reject options and select dates and get access to the e-Way Bills. Now, the system mentions all the e-Way Bills which have been generated on the corresponding GSTIN by others.
• Lastly, the applicant can also visit the Report option to obtain all the ‘EWBs from other parties.

Under What Situation can an e-Way Bill be Rejected?

The person who is responsible for the shipping of the concerned consignment will have to positively issue the e-Way Bill specifically mentioning the credentials of another person as a recipient of the shipment.

There is the presence clause in the common portal for the other party to see the e- Way Bills generated against the said person’s GSTIN number.

Under this provision, the person can communicate the acceptance or rejection of such consignment specified in the e-Way Bill as the other party.

If the approval or rejection is not communicated within 72 hours from the time of its generation, it is deemed that he has accepted the details.

Do I need to register separately on the e-Way Bill portal, as I already reported on GST Portal?

An e-Way Bill portal is an entirely different website from the GST portal.

As a result, persons registered on the GST portal also need to register on the e-Way Bill website separately.

The applicant can also use their GSTIN on the e-way bill portal, and then your data gets fetch from the GST portal to the E-way Bill portal.

The applicant will consequently have to visit the official e-Way bill portal, i.e., www.ewaybillgst.gov.in, to register and generate the e-Way Bill.

Once they enter their GSTIN on the e-Way Bill portal, the system sends an OTP to the registered mobile number under GST.

After successfully entering the OTP, which was received on the mobile number, the system confirms the user.

There is one more method present.

Under this, the applicant can generate a username and password on the e-way bill portal. This Username and password can be further used in the future for generating the e-Way Bill on the official portal.

Reverse Charge Under GST: Payment of GST is generally made by the supplier or the seller of the goods or services. But in Reverse Charge, GST payment is made by the person who is the purchaser of goods or services. It means the person who is liable to pay the tax gets reversed. It is referred Reverse Charge Mechanism (RCM). E-commerce, like the services made by Amazon, or Uber, is the best illustration of Reverse Charge.

Cases Where Reverse Charge Mechanism Is Applicable

Reverse Charge is applicable in two cases:

Reverse Charge applies to the supply of certain goods or services as specified by CBEC [section 9(3)]: When a person who is unregistered sells goods or supplies services to a person registered under GST, in that case, Reverse Charge is applicable. It means that the receiver has to pay GST to the Government directly. The registered dealer needs to self-invoice his/her purchases. For the buyer to make interstate purchases, he needs to pay IGST. It is also applicable to dealers registered under the Composition Scheme of GST [section 9(4)].

Requirements for Registration: A person who supplies goods and services only on which payment of GST is made on a Reverse Charge basis, then registration of such person is not required even if the specified limits of turnover are exceeded. For example, a farmer who is engaged with the cultivation of cashew nuts and sells it to a trader is liable for the payment of GST based on the Reverse Charge Mechanism. The farmer is not liable to register under GST if he is not involved with trading any other taxable goods.

Purchase Of Specific Product Or Services

Reverse Charge is charged explicitly for some services and products. The receiver is liable to pay the reverse Charge even when the seller is registered under GST, subject to conditions specified for such specific products and services.

The person who is liable for the tax paid under Reverse Charge Mechanism has to register first regardless of the threshold limit.

The seller of such products or services covered under this condition has to mention that GST payment is based on Reverse charges on their tax invoices.

Example: A trader registered under GST takes services of Goods Transport Agency (GTA) for ₹15,000. This service falls under the reverse charge list. As a result, the trader has to pay tax @ 18% on ₹15,000 based on Reverse Charge Mechanism. However, there will be no increase in net tax liability as the amount of GST paid is allowed in the same month as an Input tax credit.

At the end of the article, a list of such services and products is provided.

Purchase Of Any Goods/Services From Unregistered Personstrong

When an unregistered person sells any goods or services to a person registered under GST, then the payment of GST has to be made by the registered person on a Reverse Charge basis. When the registered person purchases goods from other states, he has to pay IGST.

There is an exemption of ₹5,000 per day provided by the Government. It means that if a purchase of less than ₹5,000 is made in a day from a person who is not registered under GST, then the person is not liable to pay tax under Reverse Charge. The limit of ₹5,000 is applicable as a total from all suppliers and not from a single supplier. The person registered under GST has to self-invoice the purchases made.

GST Rate

The tax rate already specified on such goods or services is to be used as a tax rate. When Reverse Charge is applicable, GST compensation cess is to be applied. If the purchase of such goods and services falls under exempted or zero percent tax slab, then no tax will be payable under Reverse Charge.

Dealers under Composition Scheme are liable for the payment of Reverse charges at standard tax rates (5%, 12%, 18%, and 28%). The dealer will not be able to pay at composition rates (1% or 5%).

Payment Of Input Tax Credit Of GST Under Reverse Charge Mechanism

An input tax credit means that while paying output tax, a person can reduce the tax that is already paid on inputs. It includes the amount paid as IGST on imports and the amount paid under Reverse Charge. It is to be noted that credit allowed to such business is under normal circumstances. For example, dealers under the composition scheme won’t be able to take input tax credit under normal circumstances. Therefore they are prohibited from taking input tax credit on the amount of GST paid under Reverse Charge.

The amount of GST to be paid under Reverse Charge should be in cash only. It cannot be paid from the available input tax credit. The amount of reserve charge is the amount of GST that is to be paid in that period.

GST is levied on the advance amount that is paid on a Reverse Charge basis. The person is liable to pay tax under a reverse charge basis for advance payment. (Mentioned provision is currently postponed)

Reverse Charge Accounting Entries

Entries To Be Made While Purchasing Such Goods Or Services:

Particulars	Debit (Dr) / Credit (Cr)
Purchase A/c	Dr
Input SGST A/c	Dr
Input CGST A/c	Dr
To Creditor A/c		Cr
To Output SGST Reverse Charge Mechanism A/c		Cr
To Output CGST Reverse Charge Mechanism A/c		Cr

Specific accounts will get debited on the purchase of any asset or any expenses made. Output SGST Reverse Charge Mechanism A/c is used instead of normal Output SGST A/c to distinguish both taxes. It is because taxes charged under Reverse Charge Mechanism cannot be adjusted in opposition to input taxes, and it is to be paid in cash only.

Entries To Be Made While Making Payment Of GST

Particulars	Debit (Dr) / Credit (Cr)
Output SGST Reverse Charge Mechanism A/c	Dr
Output CGST Reverse Charge Mechanism A/c	Dr
To Cash/Bank A/c		Cr

Self-Invoicing Under Reverse Charge Mechanism

A person registered under GST is liable for the payment of tax under reverse Charge to purchase products or services on which amount of tax falls under reverse charge mechanism and purchase of products or services from a person who is not registered under GST. In such cases, the person has to issue an invoice for the products or service received by him/her. The registered person, while making payment to the supplier for such supplies, has to issue a payment voucher.

There isn’t any precise format mentioned for self-invoicing. The structure that the registered person uses for invoicing can be used with specific changes to the heading.

Tax Payment Under Reverse Charge Mechanism On The Basis Of Supply Time:

The specified time to deposit GST with the Government is 20 days from the month-end in which services were dispensed. Therefore it is essential to ascertain the supply time to levy taxes based on Reverse charges under GST.

Payment Date

For the purpose of calculation of Date of Supply, the Date of Payment shall be earlier among the following:-

• The date on which the entry of payment is made on the recipient’s books, or
• The date on which the amount is debited from his bank account

In Case Of Goods Time Of Supply

Under Reverse Charge, the supply time would be the earliest among the following:

• The date of payment, or
• The date of receipt of goods, or
• The immediate date after 30 days from the date of issue by the supplier.

If the time of supply cannot be determined under (a), (b) or (c) above, then in the recipient’s books of account, the date of entry shall be the time of supply.

In Case Of Services Time Of Supply

Under Reverse Charge, the supply time would be the earliest among the following:

• The payment date, or
• The immediate date after 60 days from the date of issue of invoice by the supplier

If the time of supply cannot be determined under (a) or (b) above, then the date of entry in the recipient’s books of accounts shall be the time of supply.

GST Payable Under Reverse Charge for The Following List Of Goods

Sl. No	Tariff item, sub-heading, heading or Chapter	Description of supply of Goods	Supplier of goods	Recipient of supply
1.	2401	Tobacco leaves	Agriculturist	Any person registered under GST
2.	1404 90 10	Leaves for Bidi wrapping (tendu)	Agriculturist	Any person registered under GST
3.	0801	Cashew nuts, not peeled or shelled	Agriculturist	Any person registered under GST
4.	5004 to 5006	Silk yarn	Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn	Any person registered under GST
5.	–	Supply of lottery	Any local authority, State Government or Union Territory	A selling agent or lottery distributor. Explanation.- For the purposes of this entry, selling agent or lottery distributor has the same meaning as assigned to it in clause (c) of Rule 2 of the Lotteries (Regulation) Rules, 2010, made under the provisions of subsection 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).

GST Payable Under Reverse Charge for the following List of Services

Sl. No.	Service	Provider of service	Rate of Service tax  payable by the service provider	Rate of service tax payable by any person other than the service provider	Recipient of Service
1.	Taxable services agreed  to be provided or provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory other than the non-assessee online recipient (OIDAR)	Any person located in a non-taxable territory	Nil	100%	Any person from the taxable territory other than the non-assessee recipient of any business
2.	Services agreed to be provided or provided by a goods transport agency (GTA) to transport goods by road.	Goods Transport Agency (GTA)	Nil	100%	(a) Any factory governed by or registered under ‘The Factories Act, 1948’; (b)Any society registered under the ‘Societies Registration Act, 1860’ or under any other law for the time being in effect to any Indian part; (c) Any Co-Operative society established under or by any law (d)any person who is registered under the following Act: SGST/UTGST/CGST; (e) Any  corporate body established, under or by law; (f) Any partnership firm, including the association of persons whether registered or not under any law; (g) Person taxable naturally
3.	Services agreed to be provided or provided by an individual advocate or firm of advocates through legal services, directly or indirectly.	An individual advocate or firm of advocates	Nil	100%	Any Business institution.
4.	Services agreed to be provided or provided by an arbitral tribunal	An arbitral tribunal	Nil	100%	Any Business institution.
5.	Sponsorship services	Any person	Nil	100%	Any person
6.	Services agreed to be provided or provided by Government or local authority excluding (1) renting of fixed property, (2)Specified are as follows- (i)Services by the Department of Posts in the form of speed post, express parcel post, life insurance, and agency services provided to a person other than Government; (ii)Services concerning an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers	Government or local authority	Nil	100%	Any business entity.
7.	Services agreed to be provided or provided by an insurance agent to any person carrying on insurance business.	An insurance agent	Nil	100%	Any person carrying on insurance business.
8.	Services agreed to be provided or provided by a company director or corporate body to the said company or the corporate body;	A company director or a corporate body	Nil	100%	A company or a body corporate.
9.	Services in the form of goods transportation by a vessel from a place outside India up to the Indian customs clearance station	A person from a non-taxable territory to a person located in non-taxable territory	Nil	100%	Importer as defined under clause (26) of section 2 of the Customs Act, 1962.
10.	Services provided or agreed to be provided by a recovery agent to a financial institution, or a banking company, or a non-banking financial company	A recovery agent	Nil	100%	A financial institution, or banking company, or a non-banking financial company.
11.	Transfer or permitting the enjoyment or use of a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 concerning  dramatic, original literary, musical or artistic works	Author or music composer, photographer, artist, etc	Nil	100%	Publisher, Music company, Producer
12.	Radio taxi or Passenger Transport Services provided through electronic commerce operator.	A taxi driver or Rent a cab operator	Nil	100% by Electronic Commerce Operator	Any person