Month: September 2023

The tax systems in India depend heavily on tax deducted at source (TDS) and tax collected at source (TCS). These laws recently underwent some significant modifications from the government. We’ll discuss the significance of these adjustments and how they promote efficient economic cash flow in this blog.

Understanding TDS on Purchase & Sales

Increasing tax collection and preventing tax evasion are the goals of TDS on Goods Purchased (Section 194Q) and TCS on Goods Sold (Section 206C(1H)). Buyers and sellers are required by these regulations to withhold or collect a specific portion of the transaction’s value as tax. The increased tax rates, which took effect from July 1st, are intended to increase tax revenue.

Enhanced Tax Collection

The primary objective of TDS and TCS is to augment tax collection. By introducing these provisions, the government ensures that tax is collected at the source itself, leaving less room for individuals and businesses to evade taxes. This leads to a more robust revenue stream for the government.

Reduced Tax Evasion

One of the major challenges in the Indian tax system has been tax evasion. By implementing TDS and TCS on a wider scale, the government is taking proactive steps to reduce tax evasion. These provisions act as a deterrent and encourage compliance among taxpayers.

Interest-Free Money Flow

The key advantage of TDS and TCS is their role in ensuring an interest-free flow of money in the economy. When taxes are collected at the source, it ensures that the government receives its share upfront, without the need to rely on taxpayers to pay their dues later. This, in turn, has several positive impacts on businesses and the economy as a whole.

Impact on Businesses

Compliance

Businesses are required to be more diligent in their compliance efforts, ensuring that they deduct or collect the appropriate tax at the source. This, in turn, fosters better record-keeping and tax compliance, reducing the risk of penalties and legal hassles.

Improved Cash Flow

While TDS and TCS increase upfront tax deductions, they also lead to improved cash flow for the government. Businesses, on the other hand, might face temporary liquidity challenges, but they can plan and manage their cash flows more effectively.

Reduced Dependency on Credit

With the government receiving taxes upfront, businesses are less reliant on credit to meet their tax obligations. This, in turn, can reduce the financial strain on businesses and promote responsible financial management.

Streamlined Government Revenue

The steady influx of tax revenue allows the government to plan its budget more effectively and invest in various development projects. This stability in revenue is crucial for the overall economic growth of the country.

Reduced Administrative Burden

The burden of tax collection and enforcement is significantly reduced with TDS and TCS in place. This leads to cost savings for the government and frees up resources that can be utilized for other critical functions.

Minimized Tax Evasion

As businesses become more compliant and tax evasion decreases, the government can allocate fewer resources to pursuing tax evaders, further streamlining its operations.

Preparing for the Future

Enhanced Record-Keeping

To adapt to these changes, businesses need to invest in robust record-keeping systems. Modern accounting software for tax professionals can be a valuable asset in maintaining accurate financial records and ensuring compliance.

Compliance Training

Businesses must also provide their employees with the necessary training to understand and implement these new provisions effectively. This not only ensures compliance but also reduces the likelihood of errors.

Technology Adoption

Embracing technology is crucial in the face of these regulatory changes. The best tax software for accountants can automate tax calculations, making compliance more efficient and reducing the risk of errors.

TDS on Purchase of Goods Section 194Q

This provision requires the buyer to deduct tax at the prescribed rate when purchasing goods. It’s a proactive step to ensure that tax is collected on transactions involving goods.

TCS on Sale of Goods 206C(1H)

Under this provision, the seller collects tax at a specified rate while selling goods. This acts as an additional layer of tax collection to further strengthen government revenue.

New TDS Rate from 1st July

Effective from July 1st, the government introduced a new section, 194R, in the Income Tax Act during the Budget 2022-23. According to this amendment, a 10% TDS must be deducted by anyone providing benefits or perquisites exceeding Rs 20,000 annually to a resident. According to Kamlesh C Varshney, Joint Secretary in the Finance Ministry, any queries regarding the applicability of this new TDS on benefits and perks will be answered by the ministry.

Government’s Continued Support

It’s worth noting that the government has decided to extend the 50-year interest-free loan to state governments for an additional year, as stated by the finance minister Nirmala Sitharaman. This support aids in maintaining fiscal stability at the state level.

Conclusion

The government’s move to enhance TDS and TCS on purchase and sales is a significant step toward interest-free money flow in the Indian economy. While it may pose some initial challenges for businesses, it ultimately contributes to a more efficient tax collection system, reduced tax evasion, and a healthier economic ecosystem. As businesses adapt to these changes through better compliance, improved record-keeping, and technology adoption, they are not only contributing to the nation’s growth but also ensuring their own financial stability and resilience in the long run.

Tax laws play a significant role in determining a nation’s economic environment. Thus, it is important to consider how they will evolve in the future as technology develops and the world’s economic landscape changes. This article examines potential changes to tax regulations and foresees trends that will influence the future of income tax policy. The Indian government largely relies on tax collections and revenues. Thus, they can employ AI tools in the age of digitization and artificial intelligence to gather more precise and filtered data.

Rise Of Trends In Tax Laws

Filing Of Tax

Artificial intelligence (AI) will change tax laws, revolutionizing the filing and handling of income tax returns. While machine learning algorithms can decrease audits and fines by spotting potential errors and inconsistencies, the best tax software for accountants can enable faster and more precise filing.

Effective Risk Management

Many jurisdictions will require a tax control architecture. Companies will reconsider their tax choices as a result of increased stakeholder scrutiny and reputational risk. To manage the rising tax controversy brought on by transparency initiatives, a strategic focus on jurisdictional reporting and recording of corporate activities, including transfer pricing, is essential.

International Cooperation And Transparency

Tax authorities emphasize international cooperation and transparency to stop tax evasion and assure fair taxation of multinational firms in a global economy. Closing loopholes and preventing tax evasion are the goals of initiatives like Base Erosion and Profit Shifting (BEPS) and the Common Reporting Standard (CRS).

Improved Automation

Enterprise financial systems are replacing spreadsheets and other conventional tax technology solutions in a growing number of companies. Professional data analysis tools will replace traditional tax technology solutions in tax functions for risk detection, opportunity identification, predictions, scenario planning, and overall business support.

Digitalization

In order to ensure that online businesses are properly taxed, the expansion of e-commerce has brought new issues for international tax authorities. Countries already impose sales taxes on purchases made online and digital services, and it is expected that additional innovations in digital taxation will be required to adapt to the changing nature of the digital economy.

Increased Sustainability

Tax laws are expected to incorporate green taxation policies due to climate change and environmental sustainability concerns. Governments may use tax breaks and penalties for companies not adhering to sustainable standards to promote environmentally friendly business practices, aligning with the global movement towards a greener economy.

Change In Tax Structure And Rates

In order to solve economic issues, governments may change tax rates and structures as well as their fiscal policies. Future adjustments to tax rates, including those for personal and corporate income taxes, are to be expected. Governments may also review tax levels and thresholds to preserve justice and efficiency in the tax system.

Increased Awareness And Assistance

The complexity of tax regulations frequently causes taxpayers to become confused and make mistakes. Future tax legislation will prioritize programs that improve tax education, help people understand the tax system, and provide them with assistance to comply with their obligations.

Predictions For Future

With tax administrations growing into massive organizations in handling financial transactions between governments and residents, governments are prioritizing their people’s health and wellness. Tax incentives encourage the private sector to cover government services, training, and education shortfalls. Tax authorities use data to prevent errors and assure compliance, and corporations increasingly hold governments equally responsible as participants in the social contract.

Conclusion

Artificial intelligence can massively improve governmental policy by delivering data-driven insights, particularly in taxation. However, even the best tax preparation software can result in incorrect policy decisions without adequate data analysis. It’s important to remember that since AI relies on data and cannot reason like humans, its accuracy cannot be guaranteed. Therefore, expert assistance is required to guarantee the accuracy of AI-based policies.

Accounting software can save money and time for businesses, especially architects. It handles client information, income, and expense reports, informing you about your business through detailed financial reports. It also offers inventory management for the architecture industry, allowing you to focus on the creative aspect of your job. Some highly recommended accounting solutions and software are discussed here. By choosing the right accounting software, architects can streamline their focus on their core business operations and save time.

What Is Accounting Software?

Accounting software is a system that helps individuals and businesses manage financial data, track revenue and expenses, and generate financial reports. For streamlined and precise accounting, it works with existing payment processors and automates operations like recording transactions, computing taxes, and issuing invoices. Every type of business, from small proprietorships to large multinationals, can be customized.

Benefits Of Accounting Software For Architecture Firms

Automation

Accounting software automates repetitive operations such as data input, bookkeeping, payroll, financial reports, invoicing, and payment reminders to make them simpler and faster to perform and reduce the time spent on manual tasks.

Reduce cost

A focus on profitable business areas is made possible by minimizing labor, which also lowers the cost of production. Real-time financial data can spot possible errors, raise productivity, increase efficiency, cut wasteful spending, and increase profitability. This enables the rapid detection of potential errors and efficiency improvements, which eventually results in higher earnings.

Data security

Data encryption and regular automatic backups are features of cloud-based accounting software that adhere to GDPR and guarantee data protection. This offers assurance by preventing data loss despite technical difficulties. It is more dependable than desktop computers, which could be sluggish to update, and spreadsheets, which can crash.

Keep Track Of Tax Returns

Accounting software facilitates tax return filing, reducing the stress caused to business owners during tax season. It provides pre-installed tools and automatic functions, such as automatic record-keeping and tax-specific software like a tax planner and calculator. With this technology, businesses can forecast their tax obligations, file online, and keep track of their earnings, outgoings, and other financial operations. Accounting software helps companies comply with tax regulations by providing accurate financial records and warnings, helping them avoid late fees and fines associated with non-compliance. Accounting software could make filing taxes more efficient and convenient for businesses.

Best Accounting Software For Architects In 2023

Xero

Xero is an accounting software for small architecture firms or mid-sized companies. It offers automatic invoicing, billing, financial reporting, and payroll management. It saves time, money, and energy by supporting data sharing and integration with other apps like WorkflowMax, Lever, and Synergy Practice Management. Find the best Xero alternatives here.

Bonsai Tax

Bonsai Tax automates expenses, tracks invoices, and estimates taxes. The software offers estimated quarterly tax payments, a cost-effective solution for most users, and automated scanning for missed deductions. Pricing starts at $17/month, with professional plans at $32/month and business plans at $52/month. The software offers client portals, payment options, project management, expense tracking, and automatic deduction scanning. However, the Bonsai Tax has limited English support and geographically limited payment options.

Freshbooks

Freshbooks is designed for architectural firms and businesses of all sizes. It offers time tracking, invoicing, income and expense tracking, and more. Pricing starts at $22.00 monthly for Premium, $12.00 per month for Plus, and $6.80 for Lite. Freshbooks is simple to use, reasonably priced, and easy to stay organized.

NetSuite

NetSuite is a comprehensive architecture accounting software that offers a cloud-based enterprise resource planning solution for architects. It integrates various HR, PSA, ERP, CRM, inventory, and supply management systems. NetSuite provides precise data analysis and optimized business intelligence, helping designers and architects manage their financial situation.

Quickbooks

Startups and architectural firms often use QuickBooks. This accounting software includes tools for managing projects, keeping track of inventories, creating customized invoices, and setting payment reminders. It is appropriate for construction, retail, manufacturing, and nonprofit businesses, and it works on computers and mobile devices. Visit alternatives to QuickBooks for additional options.

Conclusion

Accounting software offers numerous benefits, including improved project planning, time savings, and protection of profit margins. They support various businesses, including architecture, accounting, design, writing, marketing, and photography. In today’s tax-conscious world, managing tax preparation is easier with the help of EFINs. To get an EFIN, one can have accounting software for architecture firms and explore the benefits of your architecture business.

GST was introduced in India half a decade ago, and e-invoicing was implemented two years ago. Since then, a lot has changed. While GST replaced all indirect taxes and paved the way for a number of digital reforms, e-invoicing has revolutionized the way businesses conduct business online. Both reforms have been incredibly beneficial and have sparked a shift in how India conducts business. Let’s understand how e-invoicing benefits businesses and the role of e-invoicing solution providers in this transition.

Understanding E-Invoicing

E-invoicing, also known as electronic invoicing, is a digital process wherein Business-to-Business (B2B) invoices are electronically submitted to a designated portal for verification by the Goods and Services Tax Network (GSTN). During this process, each e-invoice generates an Invoice Reference Number (IRN) and a distinct QR code for authentication purposes.

The Benefits of E-Invoicing

Saves Time: E-invoicing eliminates manual data entry and paperwork, making the invoicing process quicker.

Improved Accuracy: It reduces errors in accounting by minimizing manual data entry.

Cost-Effective: E-invoicing cuts down on expenses related to printing, storing, and transporting paper invoices.

Streamlined Financial Operations: Automation of tasks like invoice creation and data validation enhances efficiency in the finance department.

Data Security: E-invoicing systems are designed to keep financial data secure, reducing the risk of breaches.

Increased Productivity: Employees can focus on more valuable tasks as invoicing and data entry get automated.

Real-Time Tracking: Businesses can monitor invoice statuses in real-time, ensuring timely payments.

Benefits of E-Invoicing for Small Businesses

E-invoicing offers several advantages to Micro, Small, and Medium Enterprises (MSMEs).

Effortless Account Reconciliation: E-invoicing simplifies matching purchase and sales invoices, making account reconciliation easy.

Quick Access to Tax Credits: MSMEs can process tax credit claims faster, improving cash flow.

Reduced Compliance Burden: Compliance tasks become easier for MSMEs with e-invoicing.

Simplified Invoice Tracking: Tracking invoice statuses becomes simpler, helping manage cash flow.

Easier Loan Access: Accurate financial records, thanks to e-invoicing, make it easier for MSMEs to secure loans.

Preventing Fraud: E-invoicing enhances transparency, making it harder for fraudulent invoices to go unnoticed.

E-Invoicing with Ankpal

To make the most of e-invoicing, many businesses turn to solution providers like Ankpal. These providers offer software that seamlessly integrates with existing accounting systems. Ankpal provides a user-friendly platform simplifying the e-invoicing process, from creating invoices to GST compliance.

Embracing Digital Transformation

If there’s one thing in common that the deployment of GST and e-invoicing has is the digitization of processes. GST set the pace by bringing common tasks that were carried out offline, such as registration, return filing, etc., to now even carrying out assessments and entire refund procedures online.

e-Invoicing, as its name suggests, was brought in to digitize invoicing, the first step in record-keeping. Now, collectively, they have revolutionized invoicing, reconciliations, tax return filing, and the input tax credit claims processes. And it will only be a matter of time before e-invoicing will get extended to more businesses and more types of invoices in India.

The decision to digitize should now be made deliberately by Indian taxpayers. In order to find revenue leaks, the government took the initiative to introduce electronic invoicing and return filing. It also began utilizing data analytics and artificial intelligence (AI). Now is the moment for taxpayers to take similar action, but to prevent it.

Conclusion

E-invoicing is changing the face of accounting in India. Its advantages, such as time savings, increased accuracy, and reduced costs, are transforming how businesses manage their finances. For MSMEs, e-invoicing simplifies compliance, improves cash flow, and streamlines operations. With e-invoicing solution providers like Ankpal continuing to innovate, we can expect even greater efficiencies in the financial sector, ushering in a new era of accounting in India. Embracing e-invoicing isn’t just adopting technology; it’s a strategic step toward a more agile and competitive business environment.

The rise in technology has eased the way we work. In accounting, you can maintain the books efficiently and keep errors at bay with the help of the new software. However, one must be aware that it isn’t possible to completely eliminate all possibilities of errors. Therefore, check out 5 common mistakes that happen while using accounting software and tips on how to avoid those.

Accounting error in numbers

Numbers are going to make and break a lot of things in the business world. Numbers in accounting are just more important. The lack of proper data leads to heavy losses for companies and also affects the growth of the company. These errors also have a lasting impact in terms of how they alter the financial decisions that are taken for future projects and financial year planning.

Accounting errors and mistakes in taxes

Accounting errors in taxes could also affect the company. Whether you underreport or overreport, the company is going to be put in a difficult situation when there is an issue in tax filing. With proper focus and strategies, small but crucial errors can be easily avoided.

5 common accounting errors

1. Data entry errors

If you are someone who likes to do it the old way, there is no one who is going to complain about it…until there is no error. But manually entering data opens several weak areas where one could go wrong and the whole data process would then become useless. That is why you should use proper and reliable accounting software features that help you automatically record your income and expenses. It helps you monitor the data entry while also avoiding any manual error.

2. Failing to categorize income and expenses

Most often we focus on the bigger picture and fail to give importance to the little things that matter the most. What is the most basic thing in accounting? Or why do we need accounting? The answer to both of these questions is to calculate the income and expenses of a company and understand the profit and loss ratio based on that. Therefore, if you fail to categorize income and expenses, you’ll never get to the nitty gritty of what your business needs.

3. Not delegating enough

It is a wise move when most people shift to software to avoid human errors. However, several people also disrupt the whole plan by cutting down a lot on human resources. You need to understand that using more technological advancements is a method to cut down the workload of humans and help keep the errors to a minimum level. But if the owners do not have other professionals like a bookkeeper or an accountant to monitor and use the software, it could cost them badly.

4. Poor reconciliation between the books and bank accounts

Reconciliation is basically cross-checking the data entered with the bank accounts to know that there are no errors. It is essential to reconcile the accounts. But most owners ignore it because they are either over-confident that it will be all good or think it is a time-consuming process and do away with it. Such poor forms of reconciliation might hinder cash flow and also hamper the chances of rectifying accounting errors in the early stages.

5. Not paying enough attention to bookkeeping

Bookkeeping helps you keep track of every single transaction, small or big. If you don’t pay attention to that process, the whole accounting records could be damaged. So, it is important to always keep a record.

Conclusion

If you are wondering how to avoid these mistakes in your business accounting, the first step is to invest in buying proper technological devices with key features of accounting software. Once you are done with it, you have to manage human resource and software usage efficiently, while keeping an eye out for errors always.

Any industry will change over time. But earlier, the change used to happen at a very slow pace that a complete evolution in the system would take at least a decade. In today’s times though, the fields are rapidly changing as we speak. It is because anything and everything in this world is now at our fingertips; easily accessible through smartphones and computer systems. This innovation has also led to a drastic change in how the accounting field works. So, how does the future look?

Emerging Accounting Technologies

One thing that all of us can be sure of is that technologies and software are going to be a huge part of Accounting in the future. While we can’t entirely predict what kind of technology or what software will best fit our needs there, you must know about the many emerging trends that are going to alter the systems.

Cloud Computing

Cloud computing our data / Cloud accounting does not mean that accounting will be done automatically. However, under this process, accounting and bookkeeping can be done seamlessly. Instead of office premises, accounting can be done remotely from anywhere and anytime and all the data entered by all the people who are provided access is stored in the cloud. It gives a more transparent and centralized server to the entire team. It is one of the many accounting software for IT companies and is increasingly adopted by several firms across the globe.

Automated Accounting Tasks

Typing on never-ending Excel sheets or spending hours analyzing the pattern of our financial businesses is no longer needed. Such time-consuming work can now be quickly completed. Such taxing works include audits, payroll, finance management and more. The important part of data entry is using those to analyze how things have worked for a company. Automated tools like OneUp can be used for data entry. By using these automated tools, a company can reduce a lot of expenses, enjoy faster turnaround, data accuracy, better security and also get accurate and comprehensive analysis of trends.

Blockchain Technology

Accounting is all about financial communication. Blockchain technology offers an immutable ledger, thereby creating space for more transparent data where every transaction is recorded and audited. A lot of us might know blockchain in relation to cryptocurrency but its usage in accounting is increasingly attracting people. One can have a decentralized ledger that can be updated at any time and can’t be edited, altered or corrupted.

Required Skills for Future Accounting Professionals

Besides the basic requirement of accounting knowledge, the professionals of tomorrow should be well-versed in using technology and accounting software for IT firms. It is the basic skill companies might begin to look for. Some of these technologies would include cloud computing, blockchain, automated data entry and analysis, etc. Here are a few other necessary skills.

– Be flexible
– Understand data science

– Learn about Cybersecurity

– Can do certificate courses in fields like Digital Innovation for Finance

Demand for Accountants in the Future

The demand for accountants is never going to fade away. Most people might think that AI has replaced accountants but that is not entirely true. AI tools are used to lessen the burden on accountants and improve their work efficiency. So, they can never replace human resources. With increased importance on the economy, there will be only increased demand for accountants and other professionals in the finance field.

Conclusion – Discover Your Future in Accounting

If you want to make it big in the accounting field, you should know a lot more than basic accounting, analytical and communicative skills. You need to become tech-savvy and constantly keep tabs on the new technology in the market. You should also be agile. If there is one thing everyone is sure about the future, it is that there are going to be more changes and a flexible mindset is the right place to begin.

The Goods and Services Tax (GST) was introduced in India in July 2017 with the promise of revolutionizing the nation’s taxation system. Fast forward to today, and GST has indeed transformed the way taxes are levied, collected, and administered in the country. However, the GST story is far from over.

This blog aims to dive into the future of the tax system in India, exploring key areas of development and innovation. We will also understand how technology, including cloud accounting software, will play a pivotal role in shaping the next chapter of GST.

Making Taxation Transparent and Fair

One of the primary objectives of GST has always been to simplify the tax structure in India. GST has already introduced the concept of ‘One Nation, One Tax.’ This concept is expected to be reinforced, possibly with reduced tax slabs and reduced compliance burdens for small and medium-sized businesses. The government’s focus will likely be on enhancing the ease of doing business.

Leveraging Technology for Efficient Tax Administration

The future of the Indian tax system undoubtedly involves a heavy reliance on technology. As the tax base expands and more transactions come under the GST ambit, manual tax administration becomes impractical. This is where cloud accounting software and other technology solutions come into play.

An accounting software in India can automate various tax-related tasks, such as generating invoices, calculating tax liabilities, and facilitating the filing of returns. Moreover, these solutions can provide real-time insights into financial transactions, helping businesses make informed decisions.

The government, too, can benefit from technology. Using data analytics and artificial intelligence, tax authorities can better identify tax evaders and streamline the audit process. This not only ensures that businesses pay their fair share of taxes but also reduces the compliance burden for honest taxpayers.

GST on Petroleum & Alcohol

Currently, petroleum and alcohol are outside the purview of GST. This exclusion creates complexities in the tax structure and affects the competitiveness of various industries. Bringing petroleum and alcohol into the GST framework can lead to a more uniform tax structure and reduce price volatility. It will also enhance transparency and simplify compliance. However, this transition will require careful planning and coordination among states and the central government.

Expanding the Tax Base

One of the challenges GST has faced is the narrow tax base. The next chapter of GST will focus on widening the tax base. Identification of tax evaders and increased compliance can be achieved by implementing a complete e-invoicing system and real-time reporting tools. Additionally, efforts can be made to include more industries, such as energy and real estate, in the GST system, thereby expanding the tax base and easing the load on current taxpayers.

Dealing with the Issues of Input Tax Credits

The input tax credit (ITC) mechanism is a fundamental feature of GST, allowing businesses to claim credit for taxes paid on inputs. However, the ITC system has faced challenges, including issues related to fraudulent claims and delayed refunds.

In the future, we can expect improvements in the ITC system to ensure that legitimate claims are processed promptly, while fraudulent activities are curbed effectively. Technology, especially blockchain, can be used to create a transparent and tamper-proof ledger of transactions, enhancing the credibility of the ITC process.

Increasing Tax Rate Uniformity

Another aspect of GST’s evolution could involve a further harmonization of tax rates. Currently, GST has multiple tax slabs, with varying rates for different goods and services. While this was implemented to ensure that essential items remain affordable, it has led to complexities in classification and disputes.

In the future, the government may consider rationalizing tax rates, reducing the number of slabs, and moving towards a simpler, flatter rate structure. This would not only simplify compliance but also contribute to the ease of doing business.

Conclusion

The future of the tax system in India is poised for exciting developments. GST, which has already ushered in significant changes, is set to evolve further, with a focus on simplification, fairness, and efficiency. Leveraging advanced technology of the best accounting software in India will be a driving force behind this transformation.

The tax reforms of India were diversified and very complex, until 2017. On 1st July 2017, GST was introduced. The main objective of this was to implement a common and simple taxation policy and to eliminate different indirect taxes. Also a common rate of tax was implemented in the entire country. The introduction of GST brought many other factors with it. These factors were a necessity for the proper implementation and working of GST. One of those factors that is being used very commonly and eases the work of businessmen is the E-Way Bill.

The E-Way bill is no longer seen as a factor that complements GST. It has now become the soul component of many businesses that perform the movement of goods.

What is an Eway Bill?

E-Way bill also known as the Electronic-Way bill is a document that is now necessary for the movement of goods from one location to another. We can say that the concept of the E-Way bill has prevailed after the introduction of GST. The main objective of the E-Way bill under GST is to ensure fast movement of goods across different locations. It also ensures that the government gets all the information about the goods that are being moved.

The government still permits you to transport goods without an E-Way bill too. However, in that case, the value of goods should not be any more than 50,000 rupees. For those who are new to the business can rely on good cloud based accounting software for such information.

When to Generate?

Every business whether proprietorship, firm, or company, involved in the movement of goods should know this information. Most of us just assume that it’s mandatory to generate an E-Way bill whenever there is a movement of goods.

However, there are other conditions too, such as

1. The value of the goods they are being moved should be more than 50,000 rupees.

2. The movement should take place with the use of a vehicle.

3. The purpose of movement can be to make “supply” or “return of supply”

4. In case of inter-state movement, even if the value of goods is below 50,000 rupees.

5. Interstate supply of goods which are considered as “handicrafts.”

Who Should Generate?

The liability of generating an E-Way Bill may fall upon different persons under different situations. The major generators of an E-Way bill can be:-

1. Registered Person

The registered person becomes liable for generating an E-Way bill if the goods are being moved by him. Still, there are some cases in which this liability falls upon the transporter.

2. Unregistered Person

Even the unregistered persons are liable for generating an E-Way bill in case of supply of goods. In cases where the supplier is unregistered and the receiver is registered, the liability falls upon the receiver.

3. Transporter

The transporter may not be liable for generating an E-Way bill if it’s already been generated by the supplier.

Cases When E-Way Bill is Not Required

As it’s already been mentioned above there are some cases when the generation of an E-Way bill is not mandatory. The most common case is when the supply is in the same state and the value is below ₹50,000. The second case is when the goods are being moved without the use of a motor vehicle. The same would be applicable If the value of goods exceeds ₹50,000 but a vehicle is not being used.

There are some other cases too such as:-

1. When the movement takes place through custom ports or custom Airways.

2. Goods being transported under a custom seal.

3. For transportation of empty containers, etc.

Status of Implementation Across India

The law of GST is implemented all over the country. This was done to nullify the differences in tax rates in different parts of the country. It also helped to decrease the average transportation time for the supply of goods from one part of the state to another.

Along with GST the E-Way bill was also implemented in the entire country. A business has to undergo the rules of the E-Way bill if it wants to supply goods in different states. However, there are still some exemptions for the ease of citizens.

How to generate an E-way Bill

E-Way bill generation is not a big task. It can easily be done through the Common E-Way bill portal. The basic knowledge that you need to have is about your products, their quantity, and time of departure. After having all this information, you can proceed further and log in on the Common Portal. In some cases, only a single E-WAY bill is generated and in some cases, it’s generated in two parts. An E-Way bill can also be generated on a mobile phone through SMS.

Being a new businessman a person may lack information and need guidance. In that case, you can use a reliable Accounting Software for Small Business. Doing so will help you in each step of the process.

Validity of E-way Bill

Case 1- When over dimensional cargo is not used.

– If the distance is less than 200 Kilometers then the validity is for 1 Day. The validity will increase to 1 day with an increase in every 200 Kilometers.

Case 2- When over dimensional cargo is used.

– If the distance is below 20 Kilometers then the validity is for 1 day. There will be an increase of 1-day validity for every next 20 Kilometers.

Documents required

Some documents should be uploaded on the common portal for the successful generation of an E-Way bill. These documents are:-

1. Bill of Supply/ Invoice/Challan that is issued for supply.

2. Transporter ID and vehicle number in case of on-road transportation.

3. Transporter ID, and the documents of transport in case of transportation through railways, airways, and waterways

E-Way bill generation is not a big task, especially for those who have experience in the field. Also, an experienced individual can have much more knowledge about the laws and rules of the E-Way bill.

Conclusion

The E-Way bill plays a vital role in implementing the GST reforms. It’s a factor that is very necessary for national development. It has reduced the rate of illegal supply of goods. Also, it has helped the businesses by reducing the transport time.