Auditors/Consultants view on GST Regn.

With its eyes firmly set on the GST goal, the Ministry of Finance on Monday released draft rules and formats on payment, registration, and invoice. The rules have been released ahead of the GST Council meet scheduled on September 30. The Ministry has sought feedback on the draft rules by September 28.

After the release of the draft rules, Revenue Secretary Hasmukh Adhia tweeted, “We intend to have these rules approved by GST Council in its meeting on 30th September. So that business systems can be modified by all.”

Here are the quick highlights of the draft rules:

Draft Rules On Registration

Even before applying for registration, Part A of the new form seeks to verify PAN through Income Tax Portal and mobile number and email id through OTP.
Application for registration is to be made online either directly on the GSTN Portal or through Facilitation Centres (these will be notified separately)
26 forms have been floated including forms for showcause notice for cancellation of registration, order for amending registration, application for revocation of cancelled registration etc.
Application seeks details of estimated GST liability – IGST, CGST, SGST.
No fee is payable for filing application for registration.

Draft Rules On Invoice

The draft format for Electronic Reference Number of Invoice has been provided.There’s a 30-day time limit for raising invoice from the date of supply of services but no time limit provided for supply of goods.Bill of Supply will be issued by suppliers when non-taxable goods or services are supplied or by supplies under Composition Scheme.Certain essential details for supplementary invoice, debit note, credit note, ISD invoice are also provided.

Draft Rules On Payment

Electronic Tax Liability Register, E-Register for Cash Payments, E-Register for Credits.Tax can be paid through net banking, credit or debit card, NEFT/RTGS, Over the Counter (only upto Rs. 10,000).Generation of unique ID for every transaction – to be correlated with Tax Liability Register.

Pratik Jain, a partner at PwC said that the speed at which the government has progressed on GST front has caught the industry by surprise and they would now need to step up their pace in terms of preparation.

The good news for the industry is that they can now start preparing a blueprint of the changes required in their IT systems.


Pratik Jain, Partner, PwC

“At a headline level, the rules contemplate more of electronic interactions between the tax authorities and businesses, with only need-based physical intervention (like verification of premises on the application filed for registration).

Further, all the PAN details are to be verified online with the CBDT database, which is not the case currently. Integration of GST and CBDT databases would mean that GST authorities could have access to income tax filings of businesses and vice versa. This should help in minimising the leakage of tax, both income tax and GST.

There is also a provision that the transporter of goods need not carry the copy of the invoice, if an invoice reference number has been obtained by the supplier upon uploading the invoice details on the government portal. This would reduce the paper work for the transporters and help in smooth movement of goods.

There is also a provision that the transporter of goods need not carry the copy of the invoice, if an invoice reference number has been obtained by the supplier upon uploading the invoice details on the government portal. This would reduce the paper work for the transporters and help in smooth movement of goods.”


L Badrinarayanan, partner at Lakshmikumaran & Sreedharan said that the entire process is set on the IT highway right from word ‘go’. It is easy, seamless and minimises human interaction, though digital literacy and connectivity in parts of India will be a drawback, he added.

“There are more than 26 forms prescribed in the draft rules for all sorts of situations such as assessment, notices, etc. There seems to be a move towards an exhaustive GST regime to minimise State intervention that usually distorts uniformity. Today the problem with the state VAT laws is the variation across states, which requires businesses to learn and re-learn constantly. 

The rules requires that a Bill of Supplies be provided if the supplies are non-taxable or under special schemes such as composition levy. This will not have tax implications but is probably important for statistical and internal data purposes.

The rules provide for everything electronic from payments registers, credit registers, etc. This puts a lot of emphasis on digital data and electronic money. It is again a welcome change but may be challenge, given the large population outside the cities and towns that may not have access.”


Divyesh Lapsiwala, partner at EY India said that the release of draft regulations continues the process of sharing detailed operating rules with trade and industry.

The framework seems to be fairly close to the current state VAT regulations. The invoicing and registration related provisions clarify the manner in which key processes will have to be undertaken by a taxpayer. While the window provided to give feedback is only two days, industry bodies are aligning themselves to highlight key aspects that need to be discussed in the context of these documents.


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