IRN is good news for GST

It has been contested by the big players that E-permits for entering into the states shall be a bane under a GST Regime. What if the Invoice Reference Numbers (IRN) work like Fast tag at the toll plazas. The concept of the Invoice Reference Number has been brought since the discussions about GST Implementation had started.

As per sub-rule (4) of rule (2) of the Draft Invoice Rules had already prescribed the Invoice Reference Number which shall be generated online after uploading the relevant Invoice. The IRN will work as the smart number which shall be presented by the transporter at the barriers and the through online verification such transporter shall be given the green signal to move ahead. Most of us are comparing it with the traditional inspector raj, where the transport vehicles used to remain stuck for hours and hours. But this would not be the scenario in case of IRN. Practically it takes only few seconds for crossing a toll/barrier provided you have proper documents with you. More so GST Law provides that where the transporter is carrying the goods exceeding the value of Rs. 50,000/- without IRN, he shall be personally liable for the same. Even the transport vehicle can be impounded and all the goods be confiscated. In such a scenario even the transport unions will abstain from carrying the goods without the IRN. The end to end control will plug the leakages and the flaws present in the earlier Tax Regime. We had discussed about IRN in our earlier blog dated 13.11.2016. http://mygstmytax.blogspot.in/2016/11/transportation-of-goods-under-gst-regime.html

For practically implementing the concept of IRN the department needs to have robust infrastructures in order to monitor the movement of transport vehicles. The draconian provisions of GST will certainly hamper the way we have been doing businesses right now, but once the trust is developed between the taxpayer and taxation authorities, at that point of time we can actually expect free flow of goods. It is most likely that a stage would come where the online system would be verifying the vehicles and there would be no need to deploy the tax authority at such barriers.

Keshav R Garg

(B.Com, FCA, CS, ISA (ICAI))

Author: Bharat’s Analytical study of Revised GST

    Bharat's GST Ready Reckoner

                A Handbook on GST

Member: Indirect Tax Committee of CII, PHDCCI, MyGst.MyTax Foundation

Advisor – Industries Association of Chandigarh

Address: 3328, Sector 27 D, Chandigarh, India - 160 019

Phones: +91-172-461-3328, +91-98880-90008

Mail: keshavgarg@kdai.in