NEW GST COMPLIANCE MEASURES

NEW GST COMPLIANCE MEASURES

• The government has decided to lower the threshold for businesses to generate e-invoice for business-to-business (B2B) transactions, from Rs 10 crore to Rs 5 crore, and has rolled out the automated return scrutiny module for GST returns in a backend application for central tax officers.

Goods and Service Tax:

• The GST aims to streamline the taxation structurein the country and replace a gamut of indirect taxes with a singular GST to simplify the taxation procedure.
• It has been established by the 101st Constitutional Amendment Act.
• It is an indirect tax for the whole country on the lines of “One Nation One Tax” to make India a unified market.
• The Goods and Services Tax (GST), rolled out in July 2017, marked a major shift from the traditional production-linked tax to a consumption-based tax.
• The new regime subsumed state leviessuch as VAT, sales tax, octroi/entry tax together with central levies such as central excise and service tax.
• States gave up some of their taxation rights in lieu of the Centrepassing on their revenue share under GST and also compensating them for potential revenue losses in the first five years.
• It is levied on the value addition and provides set offs. As a result, it avoids the cascading effect or tax on tax which increases the tax burden on the end consumer.

What is the automated return scrutiny module?

• It aims to enhance tax compliance, reduce manual intervention and increase tax administration efficiency by using data analytics.
• The Automated Return Scrutiny Module, integrated into the ACES-GST backend application, leverages data analytics to identify risks and discrepancies in GST returns.
• Tax officers can scrutinize GST returns of Centre Administered Taxpayers selected based on data analytics and risks detected by the system. The module automatically generates alerts in cases of non-compliance.
• The Automated Return Scrutiny Module’s implementation has begun with the scrutiny of GST returns for the financial year 2019-20
• It was implemented by The Central Board of Indirect Taxes and Customs (CBIC)

What are the recent changes for e-invoicing?

• The government has also lowered the threshold for businesses to generate e-invoice for business-to-business (B2B) transactions to Rs 5 crore from Rs 10 crore under GST.
• The changes will come into effect from August 1.
• At present, businesses with turnover of Rs 10 crore and above are required to generate einvoice for all B2B transactions
• Reduction in the e-invoicing threshold helps to boosting GST revenue collections and checking frauds, it will also increase compliance requirements for smaller businesses
• For companies, e-invoicing-compliant result in proper flow of input tax credit and reduce the credit issues.

Practice Questions for Prelims

Which of the following is an indirect tax in India?
a) Goods and Services Tax
b) Corporation Tax
c) Income Tax
d) Capital Gains Tax

Ans. a)

Mains Practice Question

What are the key achievements of the Goods and Services Act (GST) in the last five years and highlight the major challenges with the GST System. Discuss.

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