GST COMPLIANCE MEASURES

• It aims to enhance tax compliance, reduce manual intervention and increase tax administration efficiency by using data analytics.
• The Automated Return Scrutiny Module, integrated into the ACES-GST backend application, leverages data analytics to identify risks and discrepancies in GST returns.
• Tax officers can scrutinize GST returns of Centre Administered Taxpayers selected based on data analytics and risks detected by the system. The module automatically generates alerts in cases of non-compliance.
• The Automated Return Scrutiny Module’s implementation has begun with the scrutiny of GST returns for the financial year 2019-20
• It was implemented by The Central Board of Indirect Taxes and Customs (CBIC).

3. What are the changes for e-invoicing? 

• The government has also lowered the threshold for businesses to generate e-invoices for business-to-business (B2B) transactions to Rs 5 crore from Rs 10 crore under GST.
• The changes will come into effect from August 1.
• In a notification dated May 10, the Finance Ministry announced a lowering of the threshold for e-invoicing. At present, businesses with a turnover of Rs 10 crore and above are required to generate e-invoices for all B2B transactions. 

4. What does e-invoicing envisage?

• The GST Council in its 37th meeting in September 2019 approved the standard of e-invoice with the primary objective to enable interoperability across the entire GST ecosystem.
• Under this, a phased implementation was proposed to ensure a common standard for all invoices, that is, an e-invoice generated by one software should be capable of being read by any other software, and through machine readability, an invoice can then be uniformly interpreted.
• With a uniform invoicing system, the tax authorities can pre-populate the return and reduce reconciliation issues.
• With a high number of cases involving fake invoices and fraud availing of the input tax credit, GST authorities have pushed for the implementation of this e-invoicing system which is expected to help to curb the actions of tax evaders and reduce the number of frauds as the tax authorities will have access to data in real-time.
• E-invoicing was initially implemented for large companies with turnover of over Rs 500 crore, and within three years the threshold has now been lowered to Rs 5 crore. 
• E-invoicing for B2B transactions was made mandatory for businesses with a turnover of over Rs 500 crore from October 1, 2020.
• Then it was extended to businesses with a turnover of over Rs 100 crore from January 1, 2021, after which it was extended to businesses with a turnover of over Rs 50 crore from April 1, 2021, and then the threshold was lowered to Rs 20 crore from April 1, 2022.
• It was further reduced to Rs 10 crore from October 1, 2022.

5. Goods and Service Tax

• The GST aims to streamline the taxation structure in the country and replace a gamut of indirect taxes with a singular GST to simplify the taxation procedure.
• It has been established by the 101st Constitutional Amendment Act.
• It is an indirect tax for the whole country on the lines of "one nation one tax to make India a unified market.
• The Goods and service tax (GST), rolled out in July 2017, marked a major shift from the traditional production-linked tax to a consumption-based tax.
• The new regime subsumed state levies such as VAT, sales tax, and Octroi/entry tax together with central levies such as central excise and service tax.
• States gave up some of their taxation rights instead of the Centre passing on their revenue share under GST and also compensating them for potential revenue losses in the first five years.
• It is levied on the value addition and provides set-offs. As a result, it avoids the cascading effect of tax on tax which increases the tax burden on the end consumer.

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