The Year 2020 has not been an easy year. But looking at the silver lining, this has been a year that led us to embrace the digital means much faster than ever and never considered earlier in the areas.
After months of lockdown, our economy is gradually recovering from the slowdown. The increasing GST collection numbers do indicate that businesses are steadily standing back on their feet. From the compliance perspective, Government took measures to ease the burden, deferred roll-out of the new e-invoicing mandate, and support the MSME sector. While there are mixed opinions on these measures’ effectiveness and usefulness, let us hope things get better in 2021.
As we bid adieu to this challenging year 2020, here is a quick recap of the changes in GST compliance arena and how IRIS GST evolved and performed this year.
GST Changes in 2020
The year 2020 opened with entities preparing for the new e-invoicing mandate, which was all set to roll out from April 2020. In the 39th GST council meeting held in mid-March, deferred the implementation to 1st October 2020. While it could have dampened companies’ momentum and solution providers who were ready, a few days later, a nation-wide lockdown was announced. Nonetheless, the deferment gave businesses time to be prepared for this upcoming transformational technology-driven change in compliance.
During the lockdown, some relaxations such as extension of due dates, waiver of interest, late fees and penalty, extended validity for e-way bill etc. were provided to taxpayers.
During the second half of the year, more changes were announced. The New Returns, ANX 1 and ANX 2 which was expected from April 2020 was scrapped. Instead, the existing GST returns were enhanced and other steps to tightly link tax liability and ITC claim were implemented. Release of GSTR 2B, Import Data in GSTR 2A and auto-population of GSTR 3B are some such examples. E-invoicing was rolled out for taxpayers having turnover above ₹500 cr on the declared date of 1st October, albeit with relaxation of a month to comply with e-invoicing. From 1st January 2021, taxpayers with turnover above ₹100 cr will join the league.
The Government initiated a drive to unearth fake invoicing and ITC claims. As a result, many GSTINs were cancelled or suspended, and more stricter rules for claiming ITC, obtaining registration etc. have been introduced. Many of which will be effective from Jan 2021.
Quarterly filing scheme, QRMP, is announced for small taxpayers. This move perhaps, could reduce the compliance tasks for them. Before every quarter, taxpayers will have the option to change their filing frequency, if they so wish to. This scheme also is effective from Jan 2021.
As we see, many new rules and practices will start from Jan 2021, taxpayers need to analyse these changes and see how it impacts them. We at IRIS are also gearing up for these changes.
But that is the future road-map. This year 2020 has been an action-packed year for IRIS GST too. Key highlights of what we did in 2020:
1. One-stop-shop for all GST compliances
In the beginning it was GST, then came e-way bill and now e-invoicing. The compliances have not just increased but also converged. Hence quite natural for the products to also evolve in similar manner.
All compliances under one roof and accessible using single sign-in has been the core theme for us this year. Considering the inter-dependencies between various compliances and enabling a smooth transition for our users, the integrated modules were released in a staggered manner. We started with combining e-invoicing and e-way bill operations as these are more closely related and are transactional and then moved to GST Returns.
Along with integrating all our GST compliance modules, rationalisation of data fields was an underlying factor. For businesses, it should be one-time task of data extraction from internal systems and integration with IRIS. Once data is uploaded in IRIS GST platform, the following operations are seamless.
A standard organisation hierarchy across all compliances with the flexibility to define branches, departments or units as per operations gives the comfort of defining workflow as per own needs. Needless to state, with data views and actions will continue to be strictly governed by every user’s access rights.
While we have an integrated framework in place now, we have more plans for the future, which can help businesses to get consolidated views of all their compliances.
2. Complete solution for e-invoicing
E-invoicing is a new mandate having newer requirements, and that makes a new feather on our cap.
IRIS Onyx, as we have named it, can be used to manage the complete lifecycle for e-invoice. The integrated offering further helps to accomplish the subsequent tasks of e-way bill management and GST compliances. Preparing an E-invoice is the starting point of compliance. Once an invoice (or now an e-invoice) is generated, the goods can be shipped and the invoice can be reported in GST returns.
So, while the Government has defined about 140 data points to be collected for e-invoicing, we did not limit ourselves just to it. We have defined our input format (format for collecting data points from ERPs) to collect data for e-invoice, e-way bill and GST return simultaneously. The input format has additional fields that businesses often need for their internal tracking and MIS thus making it a comprehensive and future-proof format. Hence even though the e-invoice specification had quite a few revisions to include, exclude, and then re-include the data fields, we have remained stable.
Some additional features of our solution such as customize invoice template for printing, review data before generating e-invoice, verifying QR code, sending emails, etc. assist businesses in managing supporting processes around e-invoicing.
It is not directly related to e-invoicing, but another requirement that taxpayers with turnover above ₹500 cr need to comply with is having a dynamic QR code on the B2C transactions. The effective date for B2C QR Code is now pushed to April 2021, but we are already ready with UPI based QR code for B2C cases. Taxpayers who wish to have Bharat QR code should start discussing the process with their banks so as to be ready on time.
E-invoicing being of transactional nature, taxpayers who want a seamless workflow from their ERPs without disrupting their current processes can opt for Onyx APIs. Web interface for manual upload and SFTP approach where connecting to external systems is restricted at ERP levels are the other options available to get started with IRIS Onyx. Our data transformation utility, Garnet, was updated to support businesses to extract data in their own format and with one-time mapping, the data gets transformed into IRIS format. The transformation utility can be used as an embedded process in SFTP, thereby automating the entire chain from extraction of invoice data to getting e-invoice output.
In Jan 2021, the next batch of taxpayers will be live for e-invoice generation and can immediately integrate with IRIS Onyx. More features such as MIS reports, bulk e-sign etc. are in pipeline in the coming months.
3. More utilities to make your ITC computations easier
Towards the end of Nov 2019 cap on ITC reduced from 20% to 10 % and this December we saw the limit being further reduced to 5%. Last year, we added options to keep month-wise track of ITC taken on a provisional basis and a summarised view of ITC eligible based on conditions such as filing status of the vendor, reverse charge etc.
Additionally, this year we have added options which can
- further help to fine-tune the reconciliation results
- enable follow up with multiple counterparties via email
- allow to filter the results using more criteria and add standard comments to all reconciliation categories
- provide more insights to the reconciliation results and reports covering vendor wise summary and overall status
Inclusion of import details in GSTR 2A and a fixed statement on ITC, i.e., GSTR 2B were also introduced later during the year as a vanilla download. More to be expected in the coming year as we are in the process of including these details in the reconciliation module which can help to manage your ITC better.
Given this year’s adversities, the need to have better control over vendor compliance and resolve discrepancies was more critical than ever. Hence we extended offering also to include assisted services for reconciliation. Should you be interested, do reach out to our support team.
4. Assisting transporters for uninterrupted movement even during Covid times
For Topaz users-our e-way bill solution for taxpayers (primarily consigners), the main activity was integrating the workflow along with e-invoicing generation. E-invoicing system can be used to generate and cancel e-way bill. For the rest of the operations such as extension, update transporter, part B etc., the current e-way bill system needs to be used. Integrated offering of IRIS GST will enable to perform all e-invoice and e-way bill operations seamlessly.
Other updates include revamping E-way bill print based on the changes incorporated by e-way bill system and now in process for e-invoicing related information.
EasyWayBill, our mobile app targeted primarily towards transporters, had more movement, literally speaking!
Lockdown resulted in many of us working from home; however, the goods, especially the essential commodities, had to be transported. We express our heartfelt gratitude to the transporter community as they fulfilled their duty even if highly exposed to the risk of getting infected. We also sincerely hope, the options we added for transporters to manage their tasks such as auto-extension, bulk extension and tracking status of short-distance transport, made their jobs more manageable.
EasyWayBill was also enhanced to include dashboard and MIS reports which could help to highlight exceptions and anomalies and review e-way bill transactions the way Govt officials do.
With e-invoicing, the e-way bill operations have been impacted. Starting Jan 2021, for e-invoices (i.e. where IRN is generated) even the e-way bill has to be necessarily generated via e-invoicing system. Suppliers can only access e-invoicing system. So, if you are a consignor who has outsourced e-way bill generation to transporter OR in other words if you are transporter who is currently handling e-way bill generation for clients, life is to change from Jan 2021. Be ready for it.
5. A giant leap for Peridot
It’s been a super exciting year for Peridot, one of the most popular apps for verifying GSTIN. And now, the latest version of Peridot, can do a lot more.
While the upgrade for Peridot was on the cards, we decided to check with our users what they are looking for more from Peridot. The survey received an overwhelming response (and we hope we managed to give a small happiness to our lucky draw winners). We extend our sincere thanks to everyone who participated in the survey and also to those who reach out to us and endorse Peridot for the utility it serves. And not to forget, our Beta release participants who helped us to make the final version just better.
So, as it stands today, the latest version Peridot 4, is available on Google Playstore. With all-new Peridot you can
- Search for a business by its name or PAN
- Get a company-wide compliance status
- Verify QR code of an e-invoice or e-way bill
- Keep track of favourite GSTINs
- Bookmark and share the articles and GST updates
There is a lot more in the future. Watch out for Peridot and ensure you are always up-to-date with the new versions released. To get most out of Peridot, we encourage you to sign up and complete your profile.
Something more to share:
In addition to the above points, there have been other updates in line with the GST rule changes and feedback from our clients. Since we are summarising what we did this year, here are some updates to make note of
- The GST system finally was changed to remove linking between debit and credit notes and invoices. This change also implied additional data fields to be given for debit and credit notes. For our clients, this however was not a cause of concern as since the inception of GST our input format had these data points. The only change we made was to update the validation rule from mandatory to optional and vice versa.
- For ISD Return (GSTR 6), cross-utilization and fetch ITC from the GST system was enabled
- Apart from additional sections in GSTR 2A and new GSTR 2B, there were updates in other returns and APIs released by GSTN. These include Table 8A of Annual Return GSTR 9 and Auto-compute 3B from GSTR 1. Same was incorporated in Sapphire-our GST Software.
- ITC 04, the return for job work did have many issues on GST system. We had been following up with GST team for these and finally see that these are resolved. Filing your ITC 04 should now be smooth.
Credixo, our analytics solution for GST data users, also had some enhancements to include more insights and reports. With Account Aggregator Framework and Open Credit Enablement Network (OCEN), we see more happening for Credixo in the coming year.
And we too faced some hurdles.
As they say, rough seas make stronger sailors. For us, as individuals and as businesses, challenges help us to become more resilient. Likewise, it helps technology and solutions to become more robust and more innovative.
The initial days of lockdown were busy with organizations and people trying to get their remote working arrangements in place. And we were no exception. While the Government gave relaxation, we did observe many of our clients were continuing their compliance as usual. And we are glad that we were able to provide timely support to them. Should there have been any delays and gaps in communicating updates and changes from our side, we regret the inconvenience it would have caused. And we are thankful for your understanding and patience towards us.
After the initial hustle settled, things did come back to normal at least for compliance-related activities. However, the new mandate of e-invoicing caught up the pace. At the same time, GST rules were getting updated. And our internal target was to provide a seamless and one-stop platform for all compliances. These factors influenced our product road-map and priorities. As a result, in cases, the feature could have been released later than your expectations. We believe, the single sign-on and unified hierarchy for all your GST compliance will make it up.
And last but not least, we are much dependent on the Government releasing APIs for testing and providing test GSTINs to develop, test, and then release specific features. This has been a cause of concern lately as we see many features getting released on the Government portal however APIs for the same are not released in tandem and in sync with data on the GST portal. We have been in touch with the GST teams and hope such differences narrow down in future.
The Year 2020 has been eventful year and taught us many things. As your compliance solution partner, we have strived to provide you the uninterrupted service and support. The new year brings a lot more to deal with but also new hope and new strength.
We wish all our clients and patrons, a Happy and Prosperous New Year.