Your cart is currently empty
E-invoicing was generally easy to set up in India. But some things about E-invoicing, like how to handle Freight, TCS, and Discounts, can still be a worry for many. Even more so now that the business size limit for e-invoicing has been lowered to small businesses. According to the GST Notification 17/2022, companies with an AATO of more than Rs. 10 Cr. are required to create an IRN for e-invoicing. It is said that this threshold will go down even more soon for businesses with an AATO of Rs. 5 Cr. or more.
In this article, we’ll talk about the most common questions taxpayers have about Freight, TCS, and Discounts when it comes to E-invoicing.
How to calculate GST on Insurance Charges and Freight?
If the other fees, like packaging, shipping, insurance, etc., are taxable, they will be charged at the regular GST rates. It is best to report each of these as a separate line item so that these amounts can be counted as taxable. In the future, there will be a new schema for these values that will make them easier to understand and report on.
If you are charging tax on freight, etc., and it is a composite supply, then you have to use the principal place HSN and the rate you have to provide for freight. There won’t be a specific freight HSN because you are charging the tax rate of the product being sold, which is also the freight and insurance rate for that product. So, according to the rules, you have to use the same HSN for a composite supply, no matter what it looks like. If it is a separate charge, it needs to be listed as a separate line item.
What is TCS on Sales as per Finance Act 2020?
TCS on things like cars, scrap metal, services, and so on has been a known thing. With the Finance Act of 2020, the provision has been changed to include the sale of goods as well.
Now, a lot of taxpayers put this TCS amount on their invoices and add it to the total value of the invoice. At the moment, there is no specific field for TCS in the e-invoicing schema. According to the NIC’s FAQs, this value can be reported under “Other Charges,” and in the “Invoice Remarks” field, it can be written “TCS is included in Other Charges.”
Who is liable to collect TCS under GST?
TCS must be collected from certain operators who own, run, and manage e-commerce platforms. TCS only applies when operators get money from customers on behalf of vendors or suppliers. In other words, when the e-commerce operators pay the money they’ve collected to the vendors, they have to take out an amount for TCS and pay the net amount.
Here are a few exceptions to the TCS rules that apply to e-commerce platform services:
- Hotel accommodation/clubs (unregistered suppliers)
- Transportation of passengers – radio taxi, motor cab or motorcycle
- Housekeeping services like plumbing, carpentry, etc. (unregistered suppliers)
Whether TCS is applicable to the sale of goods?
Yes, TCS will be used as of October 1, 2020, based on receipts.
In which cases is TCS not applicable?
- Goods are exported outside of India or brought into India from other countries;
- Buyer is required to deduct tax at source (TDS) on these goods;
- Buyer is Central Government, State Government, Embassy, High Commission, Legation, or trade representation of a foreign state;
- Buyer is a local authority as per section 10(20) of the Act;
- Goods are already covered by the existing TCS rules; (e.g. alcoholic liquor, scrap, motor vehicles, etc.)
How to handle discounts in e-invoicing?
Companies that meet the e-invoicing threshold need to keep track of discounts. It is when buyers pay invoices at discounted rates that have already been agreed upon. In version 1.1 of the E-invoicing Schema, which came out on July 30, 2020, the invoice level discount field was made optional. So, the official e-invoicing schema already has the discount fields at both the invoice and item levels.
If the seller gives a discount on any level of a product that changes the taxable value of that product, these discounts must be reported at the item level. And if there is a discount deal at the invoice level, such as a rebate or a reduction in the value of the invoice, that is considered a discount at the invoice level.
Contact Us for GST Filing & GST Registration
Call us on +91-8943229346
See GST Filing Packages on https://www.gstsuvidhakendras.org/gstmonthlyfiling/
See GST Registration Packages on https://www.gstsuvidhakendras.org/gst-registration-service/
WhatsApp us on : 8943229346
Click to Chat Now https://wa.me/918943229346
Tag : GST Filing, GST Registration, TDS Filing