Electronic Records Potentially Made Easier by New Proposals in Union Budget 2015

Electronic records potentially made easier in Union Budget 2015

Guest Post by Aditya Kumar at Ashwani & Associates Chartered AccountantsAshwani Associates logo

Online shopping, have you ever tried it? In today’s scenario almost 90% of the Indians will answer this question with a Big Yes. Digitization – one of the most common things our generation is experiencing. Whether, we talk about the ever-changing trends of online shopping, examination portals, e-business or e-banking its all about digitization and e-commerce at the end of the day. Technology has shaped the lives of millions of people across the globe. In all this, even our government is getting modern by providing us with the facility of filing various returns and applying for different documents or follow-ups for the processing of legal documents online. No doubt they are trying to imitate the foreign laws, but it will take a long time to match their systems.

But we should not forget the phrase, “if we have started one day we will surely reach the end”. To be a ‘no paper economy’ may seem to be a dream, but there is hope. One day we will save thousands of trees, which are being cut for fulfilling the requirements of our Indian business or regulatory culture. We can go on and cooperate with our government. They are doing their best for comforting the needs of Indian population and not making them wait in queues for submitting any official documents or application for hours. Comparing India today with what it was around 15 years back; we have come a long way. Whether it was related to filing the Income tax return on the paper and submitting it to the department by standing in long queues or to visit a bank ten times for each consignment. Now all these tasks are just a click away. You can file your returns without having to visit the concerned department resulting in increased accountability.

Let’s have a brief of what online facilities the departments provides to its trading partners or assesses:

Applying for Registration

Whether it is registration of PAN for Income Tax, Service tax no., Excise Duty Registration no. or IE code for Excise and Custom we can easily apply online. One can even follow up the status of our application i.e. whether its processing or number has been issued or dispatched. However, there still exists a system, under most of these laws, where physically signed documents need to be sent by courier to the respective agencies. Measures to accept digitally signed documents online should be taken to make such process seamless and technologically friendly.

Online Filing of Documents / Returns

All the documents of the companies which are the required to for filing with the ROC can be filed online at Ministry of Company Affairs (MCA) online portal. There are online facilities for issuing of shares, appointment or resignation of directors, application or surrender of DIN, application for refund of fees paid, appointment or removal of auditors and many more. Similarly, the Central Board of Excise and Customs (CBEC) has different portals for service tax, Customs. ICEGATE provides e-filing services to the trade and cargo carriers and other clients of Customs Department. Income Tax department has its e-filing site for the e-filing of various forms or returns of income tax. Whether it is knowing your PAN or jurisdiction, filing the returns of legal heir, checking your refund status, rectifying your return, it can all now happen by visiting www.incometaxindia.gov.in.

Electronic Invoicing / Record Retention

Various laws require entities to retain records for a period of 6-7 years leading to a lot of physical storage and printing of paper. However, it is proposed in Budget 2015-16 that Electronic invoices are valid if they have a digital signature affixed and records can be maintained electronically in Service Tax and Excise. But still the physical copy of the invoice for the transporter has to be self-attested. If they are to be self-attested, then it does not matter that it is a single copy or in triplicate. While it is a good effort by the government, there are no such enabling provisions in other laws. Thus, record will still have to be maintained physically. We hope this to change soon.

Though, there are various companies these days such as Iron Mountain, EisenVault etc. that seek to provide record retention services physically/ digitally to meet the record retention statutory requirements. However, alignment with other laws still needs to be looked into by the Government.

Summary
ParticularsIncome taxExciseService TaxCo. law
E-paymentYes, of taxes, penalty, self assessment and advance taxYes, of various fees to the departmentYes, payment of tax and interestYes, of various fees paid to ROC.
Return Filinge-filing for every assessee but Mandatory for Companies and FirmsMandatory E-filing for assesses who are liable to pay the duty exceeding Rs. 10, 00,000.Mandatory for every assessee from 01.10.2011Various forms to be submitted to ROC and Central Government can be filed electronically
RegistrationOnline Registration of assessee available for record of various returns and forms submittedOnline registration of assessee for filing of documents to the governmentOnline Registration of assessee available for record of various returnssubmittedOnline portal of MCA for filing of various returns & forms
InvoicingElectronic invoicing not permittedElectronic invoicing permitted except the transporter copy of an invoiceElectronic invoicing proposed in Budget 2015-16Electronic invoicing not permitted
Record RetentionPhysical records are to be maintained for a period of 6 years.Electronic records can be maintained if they are digitally signed and preserved for a minimum period of 5 years.Maintenance of Electronic records proposed in Budget   2015-16 if they are digitally signed and preserved at least for a period of 5 years.Physical records are to be maintained for a period of 8 years.

On a review of the above summary, we can be proud to say that the Indian Economy has come a long way in this digital age. Quoting the Honb’le Prime Minister, Mr. Narendar Modi – in the past years a town used to develop where there are ‘high-ways’ but in coming times cities will grow where there are ‘i-ways’. We are hopeful that his administration will take plunging steps in this direction to make the country more Tech Savvy.

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