Matching GSTR and e-way bill

Matching GSTR and E-Way-Bill

Government mulls matching GSTR-1 and e-way bills to prevent evasion of taxes.

The master plan by Government was always to match details that are provided in the Goods and Services Tax Return(GSTR1) with those that are furnished in the e-way bill. Such a measure is adopted to reduce tax evasion.

The Government of India introduced a massive tax reform in July 2017. The government introduced the Goods and Services Tax (GST) that brought the entire country under a unified tax regime. But with any new implementation, the GST has been subject to a fair bit of criticism. GST has overhauled the then existing tax structure in India. However, there are many businesses who are to come to terms with its provisions fully.

The GSTR-1 document is the basis on which the entire compliance structure of GST rests. The GSTR1 contains details of outbound supply of goods and services. The details of the supply along with the details of the recipient of the goods/services are to be entered in this document by the supplier. The recipient’s return for the inward supplies is thus auto-populated with the details that the supplier provides in his return for the outward supplies.

One of the most important facets that the GST has introduced is the e way bill for the transportation of goods from one place to another. The e-Way Bill is an electronic document that has to be generated for the transportation of goods. This bill has to be generated either for inter-state or for intra-state transportation of goods which have a value of more than Rs 50,000. The inter-state e-way bill has been implemented from the 1st of April, 2018.

E-Way bills have to be carried by the transporter of goods while the supplies are in transit. There are quite some provisions that guide the use and implementation of the e-way bill in different circumstances.

According to reports, the matching of the details of the GSTR1 and the e Way bill will be started with returns to be filed for April as it is the first month when data from both these sources will be available.

The GSTN is the IT backbone of the unified indirect tax system or the GST system. Its CEO, Prakash Kumar, has said,

“Matching process will ensure supply of goods have been done properly.”

This will overcome any loopholes in filing of tax returns as all GST assessees are required to file GSTR 1 on a monthly or quarterly basis. Furthermore, e-Way bill is mandatory for any movement of goods whose value exceeds Rs 50,000.

Rakesh Nangia, the Managing Partner at Nangia & Co LLP, believes that this matching of details will help to fight the menace of tax evasion that was rampant under the previous tax regime.

He also said,

“However, the said mechanism will be partly effective/beneficial since the matching concept can trace the only supply of goods. Further, e waybill is required on the movement of goods where consignment value exceeds Rs 50,000.” It will not be able to match the invoice for the supplies when the value of the goods is below Rs 50,000.

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