THIS IS HOW TECHNOLOGICAL CHANGES WILL IMPACT YOUR BUSINESS IN 2020
- Section 269SU of the Income-tax Act, 1961:
Applicability: February 01, 2020
Turnover Threshold: 50 crores
As per section 269SU of the Income-tax Act, 1961 (“the Act”),
“Every person, carrying on business, shall provide facility for accepting payment through prescribed electronic modes, in addition to the facility for other electronic modes, of payment, if any, being provided by such person, if his total sales, turnover or gross receipts, as the case may be, in business exceeds fifty crore rupees during the immediately preceding previous year.]”
As per section 269SU of the Act, every business with a turnover exceeding Rs. 50 crores, is required to provide a facility for accepting payments through such electronic modes, as may be prescribed by the Central Board of Direct Taxes (“CBDT”).
Consequently, Rule 119AA has been notified by the CBDT on December 30, 2019 which prescribes the following modes for acceptance of payment:
- Debit Card powered by RuPay;
- Unified Payments Interface (UPI) (BHIM-UPI); and
- Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code).
Thus, all businesses having turnover exceeding Rs. 50 crores shall have to provide facilities to accept payments by Debit Card powered by RuPay, UPI and UPI QR Code.
The applicability of section 269SU has been deferred to February 01, 2020. Hence, it is imperative for all businesses covered under the section 269SU to make appropriate technological arrangements to set up the above-mentioned electronic facilities.
- E-invoicing under Goods and Services Tax (“GST”):
Applicability: April 01, 2020
Turnover Threshold: 100 crores
The e-invoicing system under GST will require you to upload every issued invoice on the government portal and generate an Invoice Reference Number (“IRN”). The uploaded data shall then be sent to the GST portal and e-way bill portal for preparation of GST return and generation of e-way bills.
Cancellation of such invoice is allowed if done within 24 hours of its generation. Further, any amendments to such invoice can only be done through the GST portal at the time of filing GST return.
The new system shall bring complexity in a sense that any clerical mistake in preparation of an invoice will have to be resolved following a lengthy procedure, maintaining proper details of any such mistakes and preparing reconciliation statements to ensure that the GST return prepared on the basis of the uploaded invoices matches with the books of accounts.
The e-invoicing system, on the basis of reliable sources, shall be made mandatory with effect from April 01, 2020 for businesses having turnover exceeding Rs. 100 crores.
- New Returns under GST:
Applicability: April 01, 2020
Turnover Threshold: All
New GST returns are set to replace the current GST returns w.e.f. April 01, 2020. The new returns will require more details in respect of the following:
- Import of goods – Bill of entry-wise GST amount is required to be given instead of the aggregate amount;
- GST payable on Reverse Charge Mechanism (“RCM”) basis – Invoice-wise details for inward supplies liable to RCM are required to be given instead of the aggregate amount;
- All outward supplies as declared in the return shall be matched with the corresponding inward supplies of the counterparty to the transaction and modifications, if any, shall have to be made accordingly.
All these changes will make GST return filing process cumbersome and a time-consuming activity. Add to this, e-invoicing process and you will see an extended increase in time required to comply with the GST regulations.
We would love to help you out in any of these areas and make your tax compliance more user-friendly and less cumbersome.
Please feel free to contact us at raj.sheth@bhaskara.in/info@bhaskara.in
Research & Publishing Team:
CA Raj Sheth (Partner at BCG)
Kareena Jaisinghani (Intern at BCG)