Soon after the introduction of e-Invoicing from October 2020, the GSTN had begun auto-populating the GSTR-1 returns with the details from e-Invoices generated by the taxpayers to facilitate compliance and provide pre-filled returns.
Once generated, the e-Invoices can be cancelled within 24 hours. After this period, the IRP moves the data to GSTN for auto-population in GSTR-1 returns. Such auto-population of the data is intended to avoid the duplicity of the data and the efforts in compliance in the form of e-Invoices and subsequently in the form of GSTR-1 returns.
Advisory on auto-population of e-Invoice details into GSTR-1
The GSTN had issued an advisory concerning auto-population of the e-Invoice details in GSTR-1. Its objective was to facilitate return filing by providing pre-filed details of B2B supplies, supplies to SEZ, and exports.
Upon generation of IRN, the details of such invoices are populated in GSTR-1 (on a T+2 days basis) based on the document date. For all such auto-populated invoices, the source would appear as an e-Invoice, and IRN along with its date and acknowledgment number will be populated in GSTR-1. However, if such auto-populated details are edited manually, at a later stage, the source, IRN, date, and the acknowledgment number will be reset and such document will be treated as if the same was manually uploaded by the taxpayer.
In case the return for the relevant period has already been filed, the data would not get populated.
Treatment of TCS (Collected under the Income Tax Act)
Currently, most of the companies are including the TCS (Collected under the Income Tax Act) in the e-invoices to streamline the invoices issued with the account receivables. However, for the purpose of GSTR-1, in absence of any specific guidance from the CBIC, the companies are following different approaches as mentioned below with regard to the inclusion of TCS ( Collected under the Income Tax Act, 1961) component in document value:
- The document value for the purpose of GSTR-1 is considered as inclusive of TCS (Collected under the Income Tax Act, 1961) amount and hence in such cases, auto-populated details can be used for GSTR-1 filing.
- Alternatively, for the purpose of GST returns, most of the companies do not wish to include the TCS component in document value as it does not match with the sum of taxable value and tax and hence are required to delete the auto-populated data and replace the same.
Such practice also leads to discrepancies between the document values as reported at the time of IRN generation, e-Way bills, and the ones disclosed in GST returns.
Illustration:
| Scenario |
Taxable value |
Tax amount |
TCS |
Document value (e-Invoice) |
Document value (GSTR-1) |
| INV-001(TCS included) |
10,000 |
1200 |
10 |
11,210 |
11,210 |
| INV-002(TCS excluded) |
10,000 |
1200 |
10 |
11,210 |
11,200 |
Legal position: TCS collected under the Income Tax Act is not considered for valuation under GST or as a part of aggregate turnover under the Goods and Services Tax Act. The corrigendum to Circular 76/50/2018-GST had clarified that TCS under the provisions of the Income Tax Act being an interim levy not having the character of tax, is not includible in taxable value.
However, there has not been any specific guidance in law on the inclusion of such amounts as a part of document value in GSTR-1 or the need to reconcile the document value between e-Invoices and GSTR-1.
Clarifications provided by the GSTN prior to implementation & via FAQs (dated 30th March 2021)
During the orientation webinar in August 2020 prior to the implementation of e-Invoicing, it was clarified by the GSTN officials that TCS (collected under the Income Tax Act, 1961) amount can be disclosed as ‘OTHERCHARGES’ at the invoice level or alternatively the business may add such charges that not relevant to GST in the invoice copies after obtaining IRN.
In the recent set of FAQs released on 30 March 2021, the GSTN has reiterated that while a separate placeholder for TCS may be examined at the time of revision of the schema, the same may be furnished at the invoice level or the business can also add additional details in the invoice after generation of IRN.
The way forward
While we wait for suitable clarifications from the GST policy wing with regard to the matching of document values as per e-Invoice / GSTR-1 as far as non-taxable components such as TCS are concerned, the companies need to consistently follow the practices adopted by them.
Komal Vithalani
Content Writer
Komal Vithalani, a Chartered Accountant and Commerce graduate, is a dedicated professional committed to delivering value with years of expertise in navigating the complexities of indirect tax laws. Her practical excellence includes managing perplexed litigations, dispensing tactical tax advice, conducting thorough compliance checks, supervising audits, and crafting articulate and insightful content. At Cygnet, Komal seamlessly blends her profound understanding of tax regulations with cutting-edge tax technology. Leveraging her competence, she adeptly transforms complex tax tech jargon into concise, impactful, and engaging content. This not only aids readers in comprehending tax-related topics with enlightening clarity but also ensures the delivery of narratives that resonate broadly.
