e-Way Bill Vs GSTR1: The Government is thinking of new measures every day to tighten its grip over Tax Stealing & frauds. The Tax revenue collection is severely hampered as a result of the tax evaded by Businesses & Taxpayers. To deal with the Tax related Felonies, the Government has taken various major steps to date, including e-Way Bill System, Reconciliation, New 10% Provisional ITC Rule and more.
All you need to know about e-Way Bill & GSTR-1 Reconciliation
e way bill generation & e-Way Bill was made a compulsory document by the Government for the transit of goods worth over Rs 50,000 both inter & intrastate as an anti-revenue-leakage measure in April 2018. Ever since its implementation, there have been cases of Cons trying to counter the rule & find the other way to steal taxes. Cases of Fake values & e-Way Bills became quite common over time. e-Way Bills were being masked from the Sales return or GSTR-1 to omit the tax liability.
This was a problem for the Buyer as well as for the Government, given that the Buyer could not claim any ITC for such hidden transactions. Hence a new step has been taken to Link e-Way Bills to the GST Return-1 filing.
E-Way Bill Vs GSTR 1
The Link is more of a comparison of both the reports & data, than an actual link. The GST Network has started unveiling the e-Way Bill details to the Tax officials to match with the Tax paid & Sales Returns filed in GSTR-1.
The matching of the details of e-Way Bills and the Tax paid in GSTR-1 brings clarity & increases the accuracy of the GSTR-1 filling, & consequently GSTR-3B & GSTR-9C. On unavailability of e-Way Bills against a certain or vice versa, a taxpayer shall have to clarify the valid reason for the mismatch, & on not being able to deliver proper reasoning, the Taxpayer shall be liable to Scrutiny & Notices regarding the same.
Either the missing information must be filled or the Taxpayer must pay penalties & fines levied. The Tax paid & the Tax liability revealed by the Tax officials must match to avoid these issues. The Matching of the two reports is also a kind of reconciliation, & is yet another example of why Reconciliation of various reports is essential for Compliance.
Report Matching- A Privilege, from the Government Perspective
The Report Matching is again an initiative by the Government to the all-time Bull’s Eye, Tax robbery. The tax-related frauds affect the Revenue collection directly & drastically. Multiple cases have popped up, of fake e-Way Bills, or false entries in the Outward Supply Book to dodge the Tax payment & to claim a higher amount of ITC than the actual liable amount.
The recent amount of Tax evaded through bogus e-Way Bill has risen to over 100 Crores & is increasing every day. Now with the changes in the market, Finance & Economy of the country, the Tax Revenue becomes an important asset & it is hence beneficial for the Government if the measures taken to curb the Tax theft are well in form & delivering results.
Examplar Case Study 1 – Mr. Lal had a total of 50,000 Sale Invoices for October, out of which 35,000 invoices were eligible for e-Way Bill by value, the total value of these Invoices was Rs 70 Lakhs. Out of the total value, Mr. Lal only had e-Way Bills for supply worth of Rs 55 Lakh. However, the balance Rs 15 Lakh was mentioned in their Outward supply return, GSTR-1 of October, but the e-Way Bills for the same were missing.
The Tax officials on Matching the two reports found the difference & Mr. Lal was sent a Notice demanding an explanation for the same. On not having a proper explanation for the occurred difference, Mr. Lal is liable to Penalties or the total amount of tax liability, whichever is higher. The goods may even be liable to be seized & in extreme cases even confiscation.
Examplar Case Study 2– Now let us reverse the situation. Mr. Anand had e-Way Bills worth of Rs 50 Lakh for January but he only reported the supply worth of Rs 45 Lakh in their GSTR-1 of January.
On reconciling the two reports, the difference was noticed & Mr. Anand had no explanation for the mismatch.
In such cases also, the Taxpayer, Mr. Anand is liable to scrutiny, notices & penalties.
No doubt it is an effective method to reconcile the e-Way Bill & GSTR-1 Reports, however, it is a bit vague. It may not be the most convenient for businesses, reckoning the loopholes present in the system which may be potential problems for the businesses.
The first loophole is the fact of possibilities. There may be other reasons for the mismatch in reconciliation, as the manual data entry errors, shortage of supplies, unexpected demand of supply, or expiration of the e-Way Bill, pre-delivery.
Also, reconciliation is only applicable to supplies. Tax evasion can also take place from the buyers’ end. The reconciliation does not have any solution for it.
The Reconciliation of e-Way Bill & GSTR-1 is only focused on consignments of value over Rs 50,000. If a consignment is valued less than Rs 50,000 and is being used for Tax Evasion, it shall not be traced in the mismatch report.
However, there are other measures taken by the Government to overcome these loopholes, such as other mismatch reports like GSTR-3B vs GSTR-1 & GSTR-3B vs GSTR-2A. Apart from the Mismatching Reports, initiatives are being taken by the government like E-Invoicing, Auto calculation of distance for e-Way Bill based on the Pin codes, Blocking of e-Way Bill generation, etc.
Compliance with the Reconciliation of the two reports is mandatory for a taxpayer if they wish to run their Business uninterrupted & loss-free. Inconsistency in the GSTR-1 & e-Way Bill matching can cost Businesses their peace & smoothness of the workflow.
Receiving Notices & Scrutiny aren’t just legal issues but also attract high amounts of penalties, taxes, and may even lead to seizure & confiscation of the goods. This can cause the business unnecessary outflow of cash; Loss.
However, GSTHero is a substantial solution to the problem. GSTHero’s Report Matching tool can solve the issues quick & easy. GSTHero is an authorized GST Suvidha Provider & is known for its high reliability, security, user-friendly tools, robust after-sale support & quality product service delivery.
GSTHero’s Report Matching Solutions, tallies- GSTR-3B vs GSTR-1, GSTR-1 vs e-Way Bill & GSTR-3B vs GSTR-2A. GSTHero is a trusted reconciliation partner & stands with the user in high data volume & offers top-notch services. Apart from the matching of reports, users can call action to the ‘call-to-action’ outputs from within the software, like notifying the defaulting supplier to file their GSTR-1, easy editing & uploading documents to the reports, & performing other mandatory actions instantly.
GSTHero makes GSTR filing simpler & less time-consuming, to increase the Business efficiency from all the aspect.
About the Author- GSTHero- Making Life Simple! GSTHero is the best GST filing, E-Way Bill Generation & E-Invoicing Software in India. GSTHero is a government authorized GST Suvidha Provider. Both Businesses and Tax Practitioners can file GSTR 1, GSTR 3B, GSTR 9 and GSTR 9C with all supporting reports. 1-Click Auto Reconciliation & report-matching feature helps you in claiming up to 100% ITC and finds your GST Defaulting Suppliers. GSTR2A vs GSTR-3B, GSTR-1 vs GSTR-3B, ‘GSTR-1, GSTR-2A & GSTR-3B’ annual report matching is also provided by GSTHero.
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