Tally ERP 9

Recovery of Tax under GST

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Recovery-of-Tax-under-GST

When to initiate proceedings for Recovery of Tax?

As per the recovery provisions under GST, if the amount payable by a taxable person, remains unpaid, even after 3 months from the date of issuing the Order for demand of tax, then the recovery of tax under GST will be initiated. However, if the proper officer considers it urgent in the interest of revenue, he may state reasons recording in writing, and direct the concerned taxpayer to make payment in a reduced period as well. In any case, if the demand is not paid in the time specified, then the department will initiate proceedings for tax recovery under GST.

What are the modes of recovery of tax?

The proper officer may recover the tax due in the following tax recovery modes:

  • Deduction of due amount from the tax amount payable to such person by the department
  • Recovery of tax by way of detaining and selling any goods belonging to such person
  • Recovery of tax from another person, from whom money is either due or may become due to such person
  • Recovery of tax from another person, who holds or may subsequently hold money for or on account of such person, to pay to the credit of the Central or a State Government
  • Detention of any movable or immovable property belonging to such person, until the amount payable is paid. If the dues are not paid within 30 days, the said property is to be sold and with the proceeds of such sale the amount payable and cost of sale is to be recovered
  • Recovery of tax through the collector of the district, in which such person owns any property or resides or carries on his business, as if it were an arrear of land revenue. The proper officer will need to prepare a certificate specifying the amount due from such person and hand it over to the concerned collector, for this purpose
  • Recovery of tax by way of application to the appropriate magistrate, who in turn shall proceed to recover the amount as if it were a fine imposed by him
  • Recovery of tax via enforcing the bond or instrument executed under the Act or any rules or regulations made under the Act
  • Recovery of tax done by the proper officer of the State Government or Union Territory Government, wherein, any CGST arrears will be recovered as if it were an SGST / UTGST arrear. Such an amount will be recovered, and then later credited to the account of the Central Government. In case the amount recovered by this means, is less than the amount due, then the amount will be apportioned among the Central Government and State / UT Government in proportion to the amount due to each authority

Provision for paying taxes in Instalments

If the taxpayer cannot pay all the GST dues i.e. tax, interest and penalty, in a lump sum or within the stipulated date, then he can file an application to the Commissioner requesting to pay in instalments. Basis this application, the commissioner can either extend the due date of payment, or, allow the taxpayer to pay the amount in instalments. In either case, the reasons for accepting and rejecting this request, have to be provided in writing.

When paying taxes in instalments however, the taxpayer has to remember the following conditions:

  • Instalments are payable every month
  • A maximum of 24 instalments are allowed i.e., the time of payment can be extended for a maximum of 2 years
  • Interest at 18% must be paid along with the instalment
  • All instalments must be paid on time. A single default will cause the instalments to cease and the entire outstanding balance will become due on that date, and will be recoverable, without any notice

However, please note that this option of paying in instalments is not available for dues under self-assessment. Any tax under self-assessment must be paid in one go.

Determination of Tax Liability under Demand Provisions

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Determination-of-tax-liability

In this blog, we will understand the rules laid down for determination of tax liability for calculation of penalty under the demand provisions of GST.

General Provisions for Determination of Tax Liability

The general provisions for determination of tax liability are as follows:

  • If the service of the Show Cause Notice (SCN) or the issue of the Order, both of which are important notifications for a defaulting tax payer, have been stayed by a Tribunal or Court order, then the stay period will be excluded from the maximum time limits specified i.e. 3 years in the case of non-fraud cases and 5 years in the case of fraud cases
  • If the Appellate Authority or Tribunal or Court decides that charges of fraud are not sustainable i.e. the case cannot be labelled as a fraud case, then the case will be handled as a non-fraud one and the SCN issued earlier will be assumed to be a SCN for a non-fraud case. The tax officer will calculate the tax accordingly
  • If the Tribunal or Court directs that an order has to be passed, then it will be issued within two years from the date of the direction
  • An opportunity of a personal hearing will be granted to the taxpayer if they request it in writing, or, if a penalty or any adverse decision is proposed against such person
  • The proper officer can adjourn the personal hearing if the concerned person provides sufficient cause in writing, but, such an adjournment will be allowed for a maximum of 3 times
  • While issuing an order, the proper officer, shall set out the relevant facts and the basis of his decision, in the order itself
  • The amount of tax, interest and penalty demanded in the order will not exceed the amount specified in the notice. All demands will be made, only on the grounds specified in the notice
  • The Appellate Authority or Tribunal or Court can modify the amount of tax determined by the proper officer
  • Interest on tax which is unpaid or short paid, will have to be paid whether or not specified in the order
  • If the order is not issued within 3 years (in case of non-fraud cases) or 5 years (in case of fraud cases), then it is assumed that the adjudication proceedings are completed, and no further orders will be issued afterwards
  • All pending cases, where the decision was against the interest of revenue, might be appealed to a higher authority. For such cases, the period between the date of the original decision and the date of the revised decision of the higher authority, will be excluded from the period of 3 years or 5 years, as applicable
  • Recovery provisions for unpaid or short paid tax and interest levied on the same, is applicable irrespective of the demand provisions
  • Once a penalty is imposed on a taxpayer under the demand provisions specified for fraud and non-fraud cases, no other penalty under any of the GST sections will be applicable

Tax collected but not paid to Government

The following provisions have been specified to handle the scenario of a person collecting tax from another person, but not depositing the same with the Government, i.e. tax collected but not deposited to the Government:

  • The defaulter will have to mandatorily pay the said amount to the Government, irrespective of whether the supplies, for which the amount was collected, are taxable or not
  • If the amount is not paid in time, a proper officer may issue a SCN immediately, for recovery of the amount and penalty equivalent to the amount. There will be no specified time limit for issuing such a SCN
  • The proper officer, will then after considering all the facts, determine the amount finally due from the defaulter. The defaulter will be liable to pay not only the amount, but also the interest at the rate specified, from the date the said amount was collected by him to the date the said amount is paid by him to the Government
  • The proper officer shall issue an order within one year from the date of issue of the notice, post which the amount shall be collected and adjusted against the relevant tax ledgers

Tax wrongfully collected and paid to Central Government or State Government

One of the most common mistakes which can happen for any business is the payment of tax under the incorrect head i.e. CGST + SGST / UTGST being paid in place of IGST or vice versa. The following provisions have been specified to handle tax wrongfully collected:

  • A registered person who has paid CGST + SGST / UTGST on a transaction considered by him to be an intra-State supply, but which was actually an inter-State supply, shall be refunded the amount of taxes so paid in such manner and subject to such conditions as may be prescribed.
  • A registered person who has paid IGST on a transaction considered by him to be an inter-State supply, but which was actually an intra-State supply, shall not be required to pay any interest on the amount of CGST and SGST / UTGST, which is payable.

Demand under GST

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Demand-Provisions-under-GST

As you must be aware, the Goods and Service Tax is largely payable on a self-assessment basis. If the assessee pays the right amount of tax, there is no problem. However, if there is any short payment or wrong utilisation of input credit, then the GST authorities will initiate demand and recovery of tax under GST provisions, against that particular assessee. Under the GST Act, provisions relating to demand and recovery are quite similar to the provisions under the erstwhile Service Tax and Central Excise Act norms. In this blog, we will understand the provisions of demand under GST in detail.

When can a demand under GST be raised?

The GST Act contains elaborate demand provisions under GST as well as provisions for recovery of tax under various situations, which can be broadly classified as follows:

  • Tax is unpaid or short paid
  • Refund is wrongly made
  • Input Tax Credit is wrongly availed or utilised

Now, these situations can happen, either because of an inadvertent bona fide mistake (normal case) or because of a deliberate attempt to evade tax (fraud case). Since the nature of offences is totally different in both the cases, separate recovery and demand provisions under GST have been laid down for each type of case. These provisions attempt to encourage voluntary compliance, under certain specific timelines, which are discussed below.

Demand of tax when there is no fraud

As per the rules of demand in GST, when there is no fraud, no wilful misstatement or no suppression of facts – in other words, no motive to evade tax, the demand of tax provisions are comparatively more lenient.

Time Limit to issue Show Cause Notice & Order

As per the provisions of demand under GST, the proper officer i.e. the concerned GST authority is required to primarily issue 2 notifications, which serve as opportunities to the defaulter – Show Cause Notice (SCN) & Order.

  • Order – 3 years from the due date of filing Annual Return for Financial Year, to which the amount relates
  • Show Cause Notice (SCN) – 3 months before the date of issue of the Order, i.e. 2 years and 9 months from the due date of filing Annual Return for the Financial Year, to which the amount relates.

Once the above notice has been issued, the proper officer can then serve a statement, with details of any unpaid tax / wrong refund etc., for other periods which are not covered in the notice. This means, that a separate notice does not have to be issued for each tax period, which the concerned authority wants to highlight, as per the provisions of demand under GST.

Penalty Scenarios

  • Before SCN – If the taxpayer pays the tax along with interest, based on his own calculations, or the officer’s calculations, and informs the same to the officer in writing, before the SCN is issued, then the officer will not issue any notice, nor charge any penalty. However, if the officer finds that there is a short payment, they can issue a notice for the balance amount.
  • Within 30 days of SCN – If the taxpayer pays all his dues within 30 days from the date of issue of the SCN, then the penalty will not be applicable, and all proceedings and prosecution regarding the notice will be closed.
  • Within 30 days of Order – If the taxpayer pays all his dues within 30 days from the date of issue of the Order, then penalty will be charged at 10% of tax subject to a minimum of INR 10,000.
  • After 30 days of Order – If the taxpayer pays all his dues after 30 days from the date of issue of the Order, then penalty will be charged at 10% of tax subject to a minimum of INR 10,000.

To sum up,

Due Payment Date Penalty
Before SCN No penalty
Within 30 days of SCN No penalty
Within 30 days of Order 10% subject to a minimum of INR 10,000
After 30 days of Order 10% subject to a minimum of INR 10,000

Demand of tax when there is fraud

As per the demand rules in GST, such provisions arise, when there is unpaid or short paid tax, wrong refund or wrong utilisation of ITC, under the following situations:

  • Fraud
  • Wilful misstatement
  • Suppression of facts

Time Limit to issue Show Cause Notice & Order

As per the provisions of demand under GST, even in the case of fraud, the proper officer i.e. the concerned GST authority is required to primarily issue 2 notifications, which serve as opportunities to the defaulter – Show Cause Notice (SCN) & Order. However, the timelines are different as follows:

  • Order – 5 years from the due date of filing Annual Return for Financial Year, to which the amount relates
  • Show Cause Notice (SCN) – 6 months before the date of issue of the Order, i.e. 4 years and 6 months from the due date of filing Annual Return for the Financial Year, to which the amount relates.

Once the above notice has been issued, the proper officer can then serve a statement, with details of any unpaid tax / wrong refund etc., for other periods which are not covered in the notice. Similar to the previous scenario, a separate notice does not have to be issued for each tax period, which the concerned authority wants to highlight, as per the provisions of demand under GST.

Penalty Scenarios

  • Before SCN – If the taxpayer pays the tax along with interest, based on his own calculations, or the officer’s calculations, and informs the same to the officer in writing, before the SCN is issued, then the officer will not issue any notice, but a penalty of 15% will be charged. However, if the officer finds that there is a short payment, they can issue a notice for the balance amount.
  • Within 30 days of SCN – If the taxpayer pays all his dues within 30 days from the date of issue of the SCN, then a penalty of 25% will be applicable, and all proceedings regarding the notice will be closed.
  • Within 30 days of Order – If the taxpayer pays all his dues within 30 days from the date of issue of the Order, then a penalty of 50% will be applicable, and all proceedings regarding the notice will be closed.
  • After 30 days of Order – If the taxpayer pays all his dues after 30 days from the date of issue of the Order, then penalty will be charged at 100% of the tax amount.

To sum up,

Due Payment Date Penalty
Before SCN 15%
Within 30 days of SCN 25%
Within 30 days of Order 50%
After 30 days of Order 100%

Note: However, as per the latest demand rules in GST, with respect to self-assessed tax and / or any amount collected as tax, a penalty of 10% will still be payable where payment has not happened within 30 days from the due date of payment of the tax. In these cases, penalty will be applicable irrespective of whether or not the taxpayer pays before or after SCN i.e. the due date of payment will be considered more important than date of issue of SCN, over-riding all the rules stated above.

The GST Act also ensures timely disposal of cases by further providing that if the Order is not issued within the stipulated time limit of 3 years or 5 years, as the case may be, the adjudication proceedings shall be deemed to be concluded. This has ensured a strong mechanism for recovery and demand in GST, which will hopefully go a long way to wipe out tax evasion across the nation.

Transaction Sub-Types in E-way Bill

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Transaction-Sub-Types-in-E-way-Bill

In this blog, we will go through the various transaction sub-types in e-way bill, which are available as options, and what each sub-type represents.

Transaction types in e-way bill

On the e-way bill portal, once you start to fill up the form to generate a new e-way bill, you will come across a section called “Transaction Details”. The first field within this section is “Transaction Type”.

Now, if we recall the e-way bill rules, they state that an e-way bill is liable to be raised for primarily the following reasons –

  • In relation to a supply
    • Supply made for a consideration (payment) in the course of business
    • Supply made for a consideration (payment) which may not be in the course of business
    • Supply without consideration (without payment)
  • For reasons other than supply – which includes job work, removal for testing purpose, send on approval basis etc.
  • Due to inward supply from an unregistered person

Based on the above mention e-way bill rules, the options are available in the e-way bill portal. In the “Transaction Type” field, you will need to select either “Outward” or “Inward”. You need to select the option as “Outward”, if you are supplying goods and select “Inward”, if you are receiving goods.

Based on what you select, the relevant options will show up for the “Transaction Sub-Type” field, which are as follows:

  • Outward
    transaction outward

    • Supply
    • Export
    • Job Work
    • SKD / CKD
    • Recipient Not Known
    • For Own Use
    • Exhibitions or Fairs
    • Line Sales
    • Others
  • Inward
    transaction inward

    • Supply
    • Import
    • SKD / CKD
    • Job Work Returns
    • Sales Return
    • Exhibition or Fairs
    • For Own Use
    • Others

Various transaction sub-types in e-way bill portal

Let us understand the various special kinds of transaction sub-types in e-way bill, which we can see above:

Supply – As discussed above, it will cover supplies made for a consideration in the course of business, supply made for a consideration which may not be in the course of business and supply without consideration. This will cover Inward Supply, Outward Supply, Sales Returns etc.

Export / Import – Inward supplies and outward supplies across country borders

Job Work / Job Work Returns – As discussed above, job work is included under “Reasons other than supply”. In addition to the normal job work scenarios, you need to be aware of the inter-State job work scenario, wherein an e-way bill is mandatory, irrespective of the value of the consignment. Also, as per the recent changes in e-way bill rules, when goods are sent by a principal located in one State or Union territory to a job worker located in any other State or Union territory, the e-way bill can be generated either by the principal or the registered job worker as well.

SKD / CKD – SKD stands for “Semi Knocked Down” and CKD stands for “Completely Knocked Down’ which indicates the condition of goods while in transit. An example could be, movement of fan in different parts, which will be assembled later. Depending on whether a consignment is semi knocked down or completely knocked down, the e-way bill needs to be generated.

Recipient Not Known – If we study the e-way rules, especially pertaining to unregistered dealers, we will understand that the recipient may be deemed as known or unknown, based on the knowledge available to the supplier at the time of commencement of movement of goods. In certain business models, unregistered suppliers manufacture goods at their place, and then bring the goods for sale to a common market, where lot of buyers are available. In such a situation, the unregistered supplier will obviously not know at the time of movement of goods, who he is ultimately going to sell the goods to. In such a situation, the e-way bill is not mandatory. However, the unregistered supplier will still have an option to generate the e-way bill. Thus, in case the unregistered dealer chooses to generate an e-way bill under such a scenario, the option “Recipient Not Known” in e-way bill generation screen, will be chosen.

For Own Use – This will be applicable for branch transfers or stock transfers etc.

Exhibition or Fairs – Applicable for Casual Taxable Persons who cause movement of goods for display and sale at exhibitions or fairs at a place, where he does not have a permanent establishment.

Line Sales – Line sales in GST basically imply vertical sales which are made from one unit / department / division of an organisation to another unit / department / division, which is next in the production line. This basically holds true for goods which are output for one process being transported as input for the subsequent process. Line sales in GST is thus an important transaction sub-type to be considered, as “line sales” in e-way bill generation screen will need to be selected.

In conclusion, it is important for businesses to know which transaction sub-type to choose for which business scenario, so that the e-way bill can be generated smoothly and with the right information.

Generate E-way Bill via SMS mode for Businesses

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Generate-e-way-bill-via-SMS

Generate e-way bill via SMS mode – For Businesses

In case you are a registered business who wants to generate e-way bill via SMS mode, you will need to send the following SMS request:

EWBG / TranType / RecGSTIN/ DelPinCode / InvNo / InvDate / TotalValue / HSNCode / ApprDist / Vehicle

Note: There should be one space gap between every two parameters in the SMS, represented above with “/”

Before we proceed, let us understand, what each of these parameters stand for, along with the values that are permitted for each parameter (specified in brackets):

  • EWBG – E-way bill Generation for Registered Businesses (Fixed value)
  • TranType – Transaction Type (Value will depend on the type of transaction as listed below)
    • OSUP – Outward Supply
    • OEXP – Outward Export
    • OJOB – Outward Job Work
    • OSCD – Outward SKD / CKD
    • ORNK – Outward Recipient Not Known
    • OFOU – Outward For Own Use
    • OEOF – Outward Exhibitions & Fairs
    • OLNS – Outward Line Sales
    • OOTH – Outward Others
    • ISUP – Inward Supply
    • IIMP – Inward Import
    • ISCD – Inward SKD/CKD
    • IJWR – Inward Job Work Returns
    • ISLR – Inward Sales Returns
    • IEOF – Inward Exhibitions & Fairs
    • IOTH – Inward Others
  • RecGSTIN – Recipient’s GSTIN or URP if he/she is an unregistered person (15 digits or URP)
  • DelPinCode – PIN Code of the place of delivery as per the invoice (6 digits)
  • InvNo – Invoice / Bill number (Maximum of 15 characters which may be alphanumeric with “-“ and “/” being the only permitted special characters)
  • InvDate – Invoice / Bill date (In DD/MM/YYYY format)
  • TotalValue – Total Invoice / Bill value (Maximum of 15 digits with 2 decimal places)
  • HSN Code – HSN Code (At least 2 digits)
  • ApprDist – Approximate Distance in KMs (Numeric)
  • Vehicle – Vehicle number which will carry the goods (AB12AB1234 / AB12A1234 / AB121234 / ABC1234 format)

The SMS will need to be sent to the registered mobile number of the State from which you are operating. For instance, all taxpayers in Karnataka will be sending the SMS to 97319 79899. Similarly, each State will have a specified contact number for SMS mode.

Let us complete our understanding by means of an example:

Prabhas Traders of Bangalore, Karnataka wants to deliver goods worth INR 75,000, bearing HSN Code 1001, against an invoice no. 546, dated 1st April, 2018 to Shiva & Co. at Nanjangud, Karnataka (GSTIN; 29AABCX0892K1ZK), via vehicle number KA 12 AB 1234 covering a distance of 170 KM.

The SMS to be typed in by Mr. Prabhas will be:

“EWBG OSUP 29AABCX0892K1ZK 571301 546 01/04/2018 75000.00 1001 170 KA12AB1234”

He will send this SMS to 97319 79899, as specified for Karnataka. If all is in order, he will receive the following a confirmation message:

“E-way bill generated successfully. E-Way Bill No: 171000000144 and date is 01/04/2018.”

How to Update and Cancel E-way Bill via SMS

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Update-and-Cancel-E-way-Bills-via-SMS

How to update e-way bill with vehicle number

In case you want to update e-way bill with the new vehicle number, using the SMS mode, you will need to send the following SMS request:

EWBV / EWB_NO / Vehicle / ReasCode

Before we proceed, let us understand, what each of these parameters stand for, along with the values that are permitted for each parameter (specified in brackets):

  • EWBV – E-way bill Vehicle Updation (Fixed value)
  • EWB_NO – E-way bill Number (12 digits)
  • Vehicle – Vehicle number which will carry the goods (AB12AB1234 / AB12A1234 / AB121234 / ABC1234 format)
  • ReasCode – Reason for changing the vehicle (Value will depend on the reasons as listed below)
    • FST – First Vehicle
    • BRK – Break Down
    • TRS – Transhipment
    • OTH – Others

The SMS to change e-way bill, will need to be sent to the registered mobile number of the State from which you are operating. For instance, all users in Karnataka will be sending the SMS to 97319 79899. Similarly, each State will have a specified contact number for SMS mode.

Let us complete our understanding by means of an example:

Manjunatha Transports of Bangalore, Karnataka, is delivering goods worth INR 75,000, on behalf of the supplier Prabhas Traders of Bangalore, Karnataka (GSTIN: 29AXYCX0892K1ZK), bearing HSN Code 1001, against an invoice no. 546, dated 1st April, 2018 to Shiva & Co. at Nanjangud, Karnataka (GSTIN: 29AABCX0892K1ZK), via vehicle number KA 12 AB 1234 covering a distance of 170 KM. The e-way bill number generated for the same is 171000000144 and it is dated 01/04/2018.

Now, the vehicle breaks down during the journey on 15/04/2018 afternoon and Manjunatha Transports arranges an alternate vehicle bearing registration number KA 12 XY 1234 for the delivery of the consignment to the destination.

The SMS to be typed in by Manjunatha Transports in order to update e-way bill will be:

“EWBV 171000000144 KA12XY1234 BRK”

He will send this SMS to 97319 79899, as specified for Karnataka. If all is in order, he will receive the following a confirmation message:

“Vehicle details updated successfully and date is 15/04/2018”

However, let us assume that Manjunatha Transporters is now delivering goods to Shaktivel Inc. at Hosur, Tamil Nadu, and the vehicle breaks down in Tamil Nadu. Understandably, the new vehicle may have a TN registration, but the SMS to change e-way bill, will still need to be sent to the Karnataka number i.e. 97319 79899, as Manjunatha Transporters is operating out of Karnataka.

Note: A few points which you need to keep in mind, with regards to updating the e-way bill via SMS Mode are as follows:

  • Vehicle updating is allowed only for the tax payer who has generated or the transporter who has been authorized while generating the e-way bill
  • Vehicle updating will not be allowed, if the validity period as per the distance mentioned in e-way bill expires

How to cancel e-way bill using SMS Mode

In case you want to cancel e-way bill, using the SMS mode, you will need to send the following SMS request:

EWBC / EWB_NO

Before we proceed, let us understand, what each of these parameters stand for, along with the values that are permitted for each parameter (specified in brackets):

  • EWBC – E-way bill Cancellation (Fixed value)
  • EWB_NO – E-way bill Number (12 digits)

The SMS will need to be sent to the registered mobile number of the State from which you are operating. For instance, all users in Karnataka will be sending the SMS to 97319 79899. Similarly, each State will have a specified contact number for SMS mode.

Let us complete our understanding by means of an example:

Prabhas Traders of Bangalore, Karnataka wants to cancel e-way bill generated by him bearing the number 171000000144.

The SMS to be typed in by Prabhas Traders will be:

“EWBC 171000000144”

He will send this SMS to 97319 79899, as specified for Karnataka. If all is in order, he will receive the following a confirmation message:

“E-way bill is cancelled successfully.”

Note: A few points which you need to keep in mind, with regards to cancelling the e-way bill via SMS Mode are as follows:

  • Cancellation is allowed only for the generator of the e-way bill
  • Cancellation is allowed only within 24 hours of generation of the e-way bill
  • Verified e-way bill cannot be cancelled

When is E-way Bill Not Required?

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When-is-E-way-Bill-Not-Required

Ever since December 2017, when the e-way bill came back into the scheme of things under GST, businesses and transporters have been proactively equipping themselves for a smooth e-way bill implementation. Trial runs of the same started in January and a full-fledged roll-out was attempted in February, which unfortunately was deferred due to technical glitches in the portal. However, at the 26th GST Council meet, a new date for e-way implementation has been set as the 1st of April, 2018 with 1st June, 2018 being the target date for a nation-wide roll-out completion. While businesses need to be aware about the e-way bill rules in great detail, they also need to be aware about when is e-way bill not required, which is bound to save time and effort. In this blog, we will understand all those cases, where the movement of goods does not warrant the generation of an e-way bill irrespective of the value of movement of goods, as well as the e-way bill exemption list for all goods for which e-way bill is not mandatory.

When is e-way bill not required

If you want to know when is EWB not required, here are the following scenarios:

  • Where goods are being transported by a non-motorised conveyance
  • Where goods are being transported from the customs port, airport, air cargo complex and land customs station to an Inland Container Depot (ICD) or a Container Freight Station (CFS) for clearance by customs
  • Where goods are being transported under customs bond from an Inland Container Depot (ICD) or a Container Freight Station (CFS) to a customs port, airport, air cargo complex and land customs station
  • Where goods are being transported under customs supervision or under customs seal
  • Where goods are being transported from one customs station or port to another customs station or port
  • Where goods are being transported as transit cargo from or to Nepal or Bhutan
  • Where goods are being transported up to a distance of 20 KMs from the place of the business of the consignor to a weigh-bridge for weighing or from the weigh-bridge back to the place of the business of the said consignor. However, in this case, the movement of goods has to be accompanied by a delivery challan
  • Where goods are being transported by rail and the consignor of goods is the Central Government, State Governments or a local authority
  • Where empty cargo containers are being transported
  • Where movement of goods is being caused by defence formation under the Ministry of Defence as a consignor or a consignee
  • E-way bill not required, where the following goods are transported, which are goods exempted from e-way bill:
    • Alcoholic liquor for human consumption
    • Petroleum crude
    • High speed diesel
    • Motor spirit (commonly known as petrol)
    • Natural gas
    • Aviation turbine fuel
    • Liquefied petroleum gas for supply to household and non-domestic exempted category (NDEC) customers
    • Kerosene oil sold under public distribution system (PDS)
    • Postal baggage transported by Department of Posts
    • Natural or cultured pearls and precious or semi-precious stones
    • Precious metals and metals clad with precious metal
    • Jewellery, goldsmiths’ and silversmiths’ wares and other articles
    • Currency
    • Used personal and household effects
    • Coral, unworked and worked coral
    • Goods, apart from de-oiled cake, which are exempt from tax under notification no. 7/2017 and notification no. 26/2017 under Central Tax, which are subject to amendment from time to time
    • E-way bill not required for goods which are treated as no supply under Schedule III of the CGST Act
    • Goods exempted from e-way bill under Rule 138 (14) in the respective State / Union Territory GST rules – i.e. list of 153 items exempt from e-way bill, including most items for household and daily use

Businesses and transporters will thus need to keep this e-way bill exemption list in mind, so that they are aware about when to generate, and when not to generate the e-way bill for movement of goods.

When is E-way Bill Mandatory

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when-E-way-Bill-is-Mandatory

As per the e-way bill rules, there are certain scenarios, where e-way bill requirement is mandatory, irrespective of the value of the consignment. In other words, even if the value of the consignment is less than INR 50,000, such scenarios warrant an e-way bill to be raised, and thus businesses should be aware about when is e-way bill mandatory.

In this blog, we will understand about the 2 major scenarios, when e-way bill is required mandatorily, irrespective of the value of the consignment of goods, which are:

  • Inter-State movement of goods by the Principal to Job Worker by Principal / Registered Job Worker
  • Inter-State movement of handicraft goods from person exempted from registration i.e. from an unregistered dealer

When is e-way bill mandatory?

Inter-State movement of goods by the principal to the job worker by principal / job worker

Let us begin by revisiting our understanding of job work under GST. Job work primarily means the undertaking of any treatment or process by a person on goods belonging to another registered taxable person. It can be undertaken for the initial process, intermediate process, assembly, packing or any other completion process in the manufacturing cycle. Any such person who undertakes the job work is referred to as the job worker.

Now, as per the CGST rules, information with regards to the e-way bill is to be furnished prior to the commencement of the movement of goods, and also, the e-way bill is to be issued whether the movement is in relation to a supply or for a reason other than supply. The reason “other than supply” includes Job Work, removal for testing purpose, send on approval basis, non-taxable supply etc.

Thus, in keeping with the above, the provisions when is e-way bill needed are as follows:

  • When goods are sent by a principal located in one State to a job worker in any other State, the e-way bill shall be generated by the principal, irrespective of the value of the consignment, i.e. e-way bill requirement is mandatory
  • The principal is liable to generate the e-way bill before commencement of such movement of goods
  • If the job worker who causes movement of goods is registered, the job worker has to generate the e-way bill, otherwise the principal has to generate the e-way bill
  • If the job worker is registered and goods are returned back to the principal then, the job worker has to generate the e-way bill, since the movement is caused by the job worker
  • If the job worker is unregistered, then either the principal or the transporter may generate the e-way bill

Inter-State movement of handicraft goods from person exempted from registration i.e. from an unregistered dealer

When handicraft goods are transported from one State or Union territory to another State or Union territory by a person who has been exempted from the requirement of obtaining registration, i.e. someone who is an unregistered person, the e-way bill shall be generated by the said person irrespective of the value of the consignment. In other words, if such a person dealing in handicraft goods wants to understand when is e-way bill mandatory, the answer is yes, there is a mandatory e-way bill requirement.

The following are the list of handicraft goods for which e-way bill requirement is mandatory, as specified under the e-way bill rules:

  • Leather articles (including bags, purses, saddlery, harness, garments)
  • Carved wood products (including boxes, inlay work, cases, casks)
  • Carved wood products (including table and kitchenware)
  • Carved wood products
  • Wood turning and lacquer ware
  • Bamboo products (decorative and utility items)
  • Grass, leaf and reed and fibre products, mats, pouches, wallets
  • Paper mache articles
  • Textile (handloom products)
  • Textiles hand printing
  • Zari thread 5605
  • Carpet, rugs and durries
  • Textiles hand embroidery
  • Theatre costumes
  • Coir products (including mats, mattresses)
  • Leather footwear
  • Carved stone products (including statues, statuettes, figures of animals, writing sets, ashtray, candle stand)
  • Stones inlay work
  • Pottery and clay products, including terracotta
  • Metal table and kitchen ware (copper, brass ware)
  • Metal statues, images/statues vases, urns and crosses of the type used for decoration of metals
  • Metal bidriware
  • Musical instruments
  • Horn and bone products
  • Conch shell crafts
  • Bamboo furniture, cane/Rattan furniture
  • Dolls and toys
  • Folk paintings, madhubani, patchitra, Rajasthani miniature

In conclusion, principal businesses and job workers, as well as unregistered dealers dealing in handicrafts, who are dealing in inter-State supplies, need to be aware about when is e-way bill mandatory and should be equipped to raise an e-way bill irrespective of the value of the transactions.

Update your Tally.ERP 9 to Release 6.4 for latest enhancements

Posted on by Tally Academy

Tally.ERP 9 Release 6.4 is our latest product for businesses, launched on 23rd Feb. 2018.

If you are a business owner, do you need to upgrade to this release? If you are a tax consultant, must you ask your clients to upgrade?  These are some obvious questions in your minds.

In this blogpost, we will take you through the benefits of using Release 6.4. We are confident that by the time you have finished reading this blogpost, you will have all your doubts cleared.

Release 6.4 addresses two important needs of our customers. E-Way Bill management and GST compliance for composite dealers.

Enhancements in Tally.ERP 9 Release 6.4

1. e-Way Bill Management

If you are a business owner, e-Way Bills are going to become bigger part of your daily life sooner than you expect. If you are transporting goods worth Rs. 50,000 or more and beyond the distance of 10 kms or more, you can do so only with an e-Way Bill.

As enablers of GST compliance for businesses, we have introduced e-Way Bill Management in Tally.ERP 9. Let’s walk through the important benefits of using Tally.ERP 9 for managing your e-Way Bills.

Generate e-Way Bills quickly

Tally.ERP 9 makes your life simpler! While creating an invoice, as soon as you start keying in the details, Release 6.4 allows you to capture additional transportation related details at the same time. You can export the invoice in a JSON file and upload it on the e-Way Bill portal to generate the e-Way Bill. The e-Way Bill Number (EBN) appears on the e-Way Bill along with other details.

You can enter the EBN against the corresponding invoice in Tally.ERP 9, take a print and hand it over to your transporter.

With Tally.ERP 9, you don’t have to re-enter all the invoice details again on the e-Way Bill portal for the purpose of generating e-Way Bill and save valuable time while reducing operational effort.

Create e-Way Bills for single or multiple invoices

Let’s take a case where you have received multiple orders and prefer to dispatch them together. Tally.ERP 9 allows you to easily generate e-way bills for all these invoices in one go. With latest version of Tally.ERP 9, you can export for all these invoices together at one go, rather than generating individual JSON files for each single invoice.

Tally.ERP 9 gives you the flexibility to generate e-Way Bills as per your business behaviour.

Create e-Way bills for different business scenarios

As a business, you come across different scenarios on a day-to-day basis. Sometimes, your supplier may not be able to generate an e-Way Bill. You might have made a purchase from an unregistered dealer who is unable to generate the e-Way Bill. If you are returning back some goods to your supplier, then you must have an e-Way Bill. Tally.ERP 9 gives you the flexibility to deal with all such scenarios and generate e-Way Bills under any circumstances.

You can also export JSON files of purchases, credit notes, delivery notes and receipt notes to generate e-Way Bills.
Track and manage transactions which need e-Way Bills
If you have hundreds of transactions, it can be difficult to keep a track of all those which qualify for e-Way Bills. No more worries! Tally.ERP 9 identifies transactions for which e-Way Bills are yet to be generated.

You can also find out invoices with missing information from the e-Way Bill Report and fill in the necessary information. You can update transactions with missing EBNs under Update e-Way Bill Information tab.

Generate Consolidated e-Way Bill

The e-Way Bill portal allow you to generate a consolidated e-Way Bill if the place of supply, State, mode of transport and vehicle number are the same. You can group invoices accordingly in Tally.ERP 9, generate a consolidated JSON and upload the same to the portal for generating a consolidated e-Way Bill. However, before doing this, ensure that you have generated e-Way Bills for each invoice individually which is a prerequisite.

Another important need that we addressed in latest version of Tally.ERP 9 is GST compliance for Composite Dealers.

2. GST Compliance for Composite Dealers

If your business turnover is equal to or less than Rs.1.5 crores, then you can opt for the Composition Scheme. Although the burden of tax compliance is lesser if you are a composite dealer, you still have to file GSTR-4 on a quarterly basis and follow some simple steps for compliance.

Tally.ERP Release 6.4 is a seamless GST solution for composite dealers. You can maintain books, configure tax rates, generate Bill of Supply, manage reverse charge transactions and generate GSTR-4 in JSON for filing. Below are the business benefits of using Tally.ERP 9 Release 6.4 for Composite dealers.

Configure tax rate in a single step

A flat tax rate of 1% is applicable for manufacturers and traders under the Composition Scheme. It takes just a step to configure the tax rate in your Tally.ERP 9 at the company level. Tally.ERP 9 calculates tax liability on your total taxable turnover.

We all know that tax rates can change under the GST regime. In such cases, you can apply the new applicable tax rate and maintain earlier transactions with their tax history in Tally.ERP 9. Let us understand this better by way of an example.

Assume that a tax rate of 2% is applicable from 1st April to 20th May, while 1% tax rate will be applicable from 21st May to 30th June. Tally.ERP 9 will automatically consider both the tax rates along with their applicable dates in your GSTR-4.

Segregate taxable, nil rated and exempted sales

As per the latest notification of CBEC (Central Board of Excise & Customs), composite dealers have to pay tax on their taxable turnover. To arrive at the right amount of taxable turnover, as a composite dealer, you must segregate the sales into taxable, nil rated and exempted sales. Tally.ERP 9 takes care of this when calculating tax liability on taxable turnover.

Record your purchases in the right manner

As a composite dealer you cannot claim any Input Tax Credit on purchases, yet have to pay taxes. Now these taxes have to be factored in under purchase cost.

With Tally.ERP 9 Release 6.4, firstly you can define the amount of tax in the Item Master. Secondly, this tax amount gets allocated to your purchase cost. This reflects in your Stock Summary Cost under the Stock Summary Report. Although the tax rates are configured for each item, Tally.ERP 9 ensures that the rates get applied only when you make purchases and not when you engage in any sales.

Manage reverse charge transactions

A composite dealer is liable to pay reverse charges in case of specified purchases and import of services. With Tally.ERP 9 Release 6.4, you can record such transactions easily and their impact reflects in your GSTR-4, provided you raise tax liability using the Stat Adjustment feature.

Generate and print Bill of Supply

Composite dealers have to issue Bill of Supply instead of invoices for all their sales.  With Tally.ERP 9 latest version, you can prepare Bill of Supply as per GST defined format and issue them for sales.

File GSTR-4 using Tally.ERP 9

Composite dealers have to file GSTR-4 on a quarterly basis. If there are any errors in transactions, Tally.ERP 9 detects and helps you to correct them while you prepare the data for GSTR-4. You can easily generate GSTR-4 in a JSON format, which can be uploaded on GST Portal to file the returns.
Release 6.4 has many more rich capabilities to help you manage your GST compliance better. We would like to hear from you, especially your experience of this release. Do upgrade, use the latest version and also share with your business colleagues so that everyone is able to make use of the benefits of our latest Tally.ERP 9 Release 6.4.

Click here for release notes

Click here for download