TReDS AND GST PORTAL

GST portal has come a long way from a fledgling,fumbling and faltering days to its better days.However it has go a long way to evolve into a mature and more user-friendly phase. Now Central Govt is introducing e Invoicing with unique Invoice Reference Number (IRN) for traceability and matching concept introduction. This IRN will be given by Govt and this is to identify whether it is a valid e Invoice .

This numbering system will be similar to cheque MICR no. for the purpose of verifying the genuineness and also for the use in matching it for clearing mechanism. This IRN will also serve similar purposes.More than bigger companies this system will help MSMEs in the longer run.

For MSME bill discounting some of the banks like Axis Bank have introduced a digital platform called TREds so that MSMEs can access cheaper bank finance against their supply invoices. Ministry of Corporate Affairs have also made it mandatory for all Corporates with a turnover of Rs.500 cr and above to register under this for all their MSME suppliers to take advantage of this bill financing platform which will help them in working capital.My suggestion is that TREdS ,which is a standalone platform of the Axis bank, may be linked and integrated with the GST portal so that ,MSMEs need not have to again look for another software to do E invoicing and generating Eway bill through GST portal. If this linking is done ,as and when Eway bill/E invoicing is done in GST portal/software, it is enough to take it to TREds platform and any duplication and time loss can be totally avoided. This will also be a great marketing tool for quicker Adoption of TREds as mandated by MCA.RBI and MCA, MOF and MSME ministries will have to work together to do this immediately which will be a great boon for MSMEs making it easy for them to do business.

Today there is a heartening news that Cabinet  has approved the budget decision to amend Factor Regulation Act 2011 to allow non-banking finance companies(NBFCs) to extend invoice financing to the MSMEs through TReDS, an electronic platform  for facilitating discounting of trade receivables. 

Now Govt should also takeup this digital linking of TReDS and GST portal softwares for MSMEs to really usher in ease of doing business and paying GST .This will also indirectly help Central Govt garnering higher GST revenues through widening of tax base

VUCA 2.0 and Board evaluation of Strategy.

VUCA 1.0 talked about Volatility, Uncertainty, Complexity and Ambiguity in the countries around the world and how this VUCA gets multiplied over the years with a purposeful push towards chaos.

The laws of thermodynamics are called into play to describe what was chaos yesterday which has moved into the chaos of today and which will move into the chaos of tomorrow, with entropy increase.

But to tackle VUCA 1.0 , I prescribed the following:

 In a VUCA WORLD

    -Volatile environment requires Vision to look beyond the immediate and prioritise

    -Uncertainty  needs calm Understanding of the situation to be purpose driven

     -Complexity  demands Capability of mind to look at locks & keys

     -Ambiguity  calls  for  Agility in the workplace to innovate, grow and excel.

In VUCA 2.0 Bill George in his HBS article gives out a solution model instead of a fearful premise.

 He elaborates that Vision, Understanding, Courage and Adaptability are the main constructs over which the Strategy can be raised.

When it comes to Adaptability, I am reminded of Charles Darwin, who famously said

that  "it is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change."

If you want to swim against the tide and come out surviving, you will have to have the adaptability to change according to the demands of the circumstances.

A Board of Directors while looking at the Sustainability Goals of an Organisation will have to keep the above in mind while chalking out the Strategy. Whenever the Board faces a challenge in evaluating the goals vs the actual performance of the Co, they should remember the following as the compass for them to proceed.

“I can’t change the direction of the wind

but

I can adjust my sails to always reach my destination”

-Anonymous Sailor

" IT Harassments"- no euphemism pl!!

Pl. see the below page from the Central Govt published data.link

Regular IT assessments done by Dept is yielding only 7 to 8% of total Gross Direct tax collected where as Adv. Tax, TDS and SA Tax is 92% i.e the voluntary compliance .

Is there not a strong case for abolishing Assts for atleast individuals who have good track record of say 10 continuous years and have limited scrutiny assessments only for Corporates/Companies with incentives for exemption from assessments if they remit Tax at least 15% more year on year.This will take care of tax buoyancy ratio and reduce assessment costs drastically.

Mr.Sunil Jain of FE recently sent a tweet to FM saying that IT dept is following up with him on some assessment notice despite complying with it and paying tax. Everyone of us have similar experiences on IT assessments despite computerisation. Straightaway all these scrutiny assessments can be called " IT Harassments "-no euphemism.

But it should also be emphasized that the scale of high pitched assessments has substantially come down over the last one/2 years but still more needs to be done in order to totally move away from Tax Terrorism to augment direct tax revenue. I am not making a case for tax evaders or dodgers who r small percentage and who will anyway continue to do so.

My firm conviction is ,if assessments are done away with , then more small businessmen will voluntarily pay under presumptive tax, file return and forget.Another indicator is the difference between how many assessees have paid tax/TDS and the no. who have filed returns.Almost 2 crore nos.!! Is it not sounding another loud bell for doing away with Assessments /Scrutiny assessments but with safeguards  like good track record or yoy 15% inc. in tax remittance etc.

 One last point. Out of such Tax assessed and  shown collected by the Dept how much is contested in appeals before CITs, Tribunals , HCs and SCs.Huge burden on these Courts will also come down and unnecessary litigation is avoided. Lots of multiplier effects can be seen if assessments are abolished.

For encouraging people to file their Income Tax return, Govt can run a lottery or even give atleast  health insurance policy under Ayushman Bharat free of cost.  

 Page 7 reproduced below:

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