Recently the Government has implemented new compliance changes for businesses regarding e-invoicing and GST, effective from 1^st October 2022. These changes will have a significant impact on businesses and it is important for them to stay informed and take necessary action to avoid penalties and fines.

In this blog post, we will cover the key changes in detail and guide what businesses need to know to stay compliant.

Notification 17/2022 – Central Tax dates 1^st August 2022: E-invoicing made mandatory

One of the key changes is the mandatory requirement for registered businesses with an aggregate turnover of more than Rs. 10 crores. E-invoicing is an electronic invoice that is generated, transmitted, and stored electronically. The government has been gradually decreasing the aggregate turnover limit for e-invoicing, making it applicable to more and more registered businesses. This move towards e-invoicing is aimed at improving the efficiency and transparency of the GST system, and reducing the compliance burden on businesses.

Businesses that fall under this threshold will be required to generate e-invoices using the Invoice Registration Portal (IRP) and transmit the invoices to the IRP in real time. They will also be required to store the e-invoices for a period of five years, and make them available for inspection by the tax authorities as and when required. Businesses must also obtain a unique invoice reference number (IRN) and digital signature certificate (DSC) for e-invoicing. The IRN will be generated by the IRP and will be used to uniquely identify each invoice. The DSC will be used to secure and authenticate the e-invoice.

This change may require businesses to invest in new technology and infrastructure to comply with the e-invoicing requirements. They will need to ensure that their systems and processes are capable of generating and transmitting e-invoices in real-time and storing e-invoices for five years. Businesses will also need to train their employees on how to use the e-invoicing system and ensure that they are aware of the compliance requirements.

Notification 18/2022 – Central Tax dated 28^th September 2022: Extension of Time Limits for GST Compliance Procedures

The second key change is the extension of time limits for various GST compliance procedures. These changes have been made effective from 1^st October 2022 and are aimed at providing relief to businesses during the ongoing pandemic. The following time limits have been extended:

The earlier provisions stated that businesses had to claim an input tax credit by the due date of furnishing return in form GSTR – 3B for September following the end of the respective financial year, or by the date of furnishing relevant annual net returns. The extensions will provide businesses with more time to claim the input tax credit and make necessary corrections.

The time limit for declaring the details of credit notes in the return: The earlier provisions stated that the businesses had to declare the details of credit notes in the return by September following the end of the respective financial year, or by the date of furnishing relevant annual returns. The new provisions extend this time limit to 30^th November following the end of the respective financial year, or by the date of furnishing relevant annual returns. This extension will provide businesses with more time to declare the details of credit notes and make necessary corrections.

The time limit for rectifying errors or omissions in GSTR-1 returns: The earlier provisions stated that businesses had to rectify errors or omissions in GSTR-1 returns by September following the end of the respective financial year or by the date of furnishing relevant annual returns. The new provisions extend this time limit to 30^th November following the end of the respective financial year, or by the date of furnishing relevant annual returns. This extension will provide businesses with more time to rectify errors or omissions in GSTR-1 returns and make necessary corrections.

The time limit for rectifying errors or omissions in GSTR – 3B returns: The earlier provisions stated that the businesses had to rectify errors or omissions in GSTR – 3B returns by September or the second quarter following the end of the respective financial year, or by the actual date of furnishing the return. The new provisions extend this time limit to 30^th November following the end of the respective financial year, or by the date of furnishing the return. This extension will provide businesses with more time to rectify errors or omissions in GSTR – 3B returns and make necessary corrections.

It’s important to note that the extended time limits are not blanket extensions for all compliance procedures. Businesses will still need to meet the original deadlines for certain compliance procedures, such as the deadline for filing annual returns. Therefore, it is important for businesses to stay informed about the specific deadlines for each compliance procedure and take necessary action to avoid penalties and fines.

In conclusion, the Indian Government’s recent changes to GST compliance requirements, including the mandatory requirement of e-invoicing for businesses with an aggregate turnover of more than Rs. 10 crores and extension of time limits for various GST compliance procedures are aimed at improving the efficiency and transparency of the GST system and reducing the compliance burden on businesses. Businesses should stay informed about these changes and take necessary action to avoid penalties and fines. They can consult their tax advisors or ofinlegal.com to ensure they meet all new compliance requirements and take advantage of extended time limits. Additionally, businesses should invest in the technology and infrastructure required to comply with the e-invoicing requirements, train their employees and be aware of the compliance requirements to ensure compliance with the GST regulations.