Doing your GST refunds as a business owner can feel like trying to solve a Rubik's Cube. The complicated forms, constant compliance checks, and fear of messing up and facing penalties can be overwhelming, not to mention the delays, cash flow issues, and even legal obstacles that can occur if you make one wrong move. Instead of spending time on growing your business, you're buried in paperwork and tax codes.&nbsp;

What if there's a way to make all these problems go away?&nbsp;

<a href="https://www.skydo.com/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=demo_click">Skydo</a> is an approved tool by chartered accountants that makes <a href="https://www.skydo.com/blog/how-to-claim-input-tax-credit-refund-in-india?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">GST refunds</a> easier than ever before. No longer will you need to stress over a long and tedious refund process, as Skydo makes the process accurate, quick, and hassle-free – so you can get back to what matters most: running your business.

Let’s learn how Skydo helps with GST Refunds.

Skydo is revolutionizing the current financial landscape with its advanced platform. With its cutting-edge technology and user-centric features, Skydo has quickly become the go-to platform for anyone needing help with GST-related compliances.

Key features that make Skydo a standout choice

1. Effortless Letter of Undertaking (LUT) Integration

An <a href="https://www.skydo.com/blog/everything-you-need-to-know-about-lut?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">LUT is vital for GST compliance</a>. To draft the LUT, you can simply log into the GST portal—an efficient digital platform. Go to the 'SERVICES' Tab &gt; 'User Services' &gt; Select 'Furnish Letter of Undertaking (LUT)'.

Select the financial year applicable for this LUT and fill in the necessary details on the Letter of Undertaking Form/GST RFD-11 that appears on the screen. Once you receive confirmation, you can capture the details of the LUT for further reference.

When creating your invoice on Skydo's platform, you'll find a dedicated section to include the LUT, accommodating up to 200 characters. This means that as you generate invoices for your international clients, you can effortlessly ensure tax efficiency.

You can seamlessly integrate the LUT into your invoice during its creation, avoiding delays and the hassle of jumping through multiple hoops for tax compliance.

2. FIRAs (Foreign Inward Remittance Advice)

Traditionally, you'd have to wait for days to receive a <a href="https://www.skydo.com/blog/all-you-need-to-know-about-FIRC-a-complete-guide?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Foreign Inward Remittance Advice (FIRA)</a> to confirm payment settlement. However, Skydo steps in to change the game. As soon as your client's payment is settled, you receive the FIRA instantly. This real-time availability doesn't just accelerate your financial processes; it's like having a financial assistant ensuring that you're always in the know.

When you <a href="https://www.skydo.com/blog/seamlessly-accept-international-payments-in-india?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">accept international payments</a> to your bank account, the bank requires you to specify the purpose code and provide supporting documents like FIRA against each inward receipt.

With Skydo, you no longer need to worry about remembering purpose codes or flipping through thick rulebooks when sending invoices. The system will automatically provide the correct purpose codes based on the code you provided before, eliminating the need to go to the bank to obtain new ones each time.&nbsp;

It's like having a built-in expert to handle the intricacies of compliance, making your life simpler and your business more efficient. 

As a business owner preparing for an upcoming audit, you need access to comprehensive transaction records. With Skydo receipts, you get a detailed breakdown of your transactions, serving as a reliable tax invoice. It's like having an accountant at your fingertips, simplifying accounting, record-keeping, and financial transparency.

Skydo's technology streamlines the process while adding layers of accuracy, transparency, and efficiency, not typically found in traditional methods.

Skydo is more than just a payment and refund system - it provides an all-in-one solution for managing your financial operations such as:

Skydo is the perfect partner for making your financial life easier.&nbsp;

With Skydo, you don't need to be an expert in tax law because the easy-to-navigate interface is designed for simplicity. In addition, automated processes ensure accuracy and financial compliance, saving time and effort.&nbsp;

The platform's transparency feature lets you track payments and refunds in real-time. With features like budgeting, bill payment, and account monitoring, you can easily streamline your financial processes. Make sure not to miss out on all that Skydo has to offer and<a href="https://www.skydo.com/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link"> book a demo today</a>.

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Cash flow problems. Poor investment decisions.&nbsp;

Unplanned levels of debt. Complex international tax laws.&nbsp;

Inefficient operations. And inadequate financial planning.&nbsp;

Such risks in a tech export business are not isolated - they're interconnected and often causative. However, they have a common solution: having a good chartered accountant on your side.&nbsp;

With their finance, taxation, and regulatory expertise, chartered accountants can help you navigate the choppy waters of international business and ensure your enterprise stays afloat. They can help you optimise your finances, reduce your tax burden, and make strategic decisions that position your business for success.

However, it's not just about avoiding pitfalls- a chartered accountant can also help you seize opportunities and chart a course for growth.&nbsp;

9 Ways a Chartered Accountant Can Help Your Tech Export Business

When managing finances, you may face several daunting challenges, especially if you are unfamiliar with the intricacies of international business. While not a miracle worker, a CA can help you with many aspects of financial management or, at the very least, give you sound advice upon which you can act.&nbsp;

CA Ravi Mamodiya, a seasoned chartered accountant professional, explains, “Understanding the numbers in your business is essential, but interpreting them is where the real value lies. From an economic perspective, pricing has a compounding effect on your margins, and distribution costs can impact your sales. Effective communication of these numbers is crucial, and your CA can help you identify areas where your business strategy may be falling short.”

Lean towards your CA when you need assistance in the following areas.

While operating internationally, your tech export business may have to deal with multiple currencies and their highly volatile exchange rates. These fluctuations can significantly impact your bottom line, making it difficult to plan and forecast finances accurately.

A CA can help you develop a realistic budget for your business, considering factors such as cash flow, revenue projections, and capital expenditures. They analyse your financial statements and identify areas to improve your profitability. This way, the right CA can help you develop a cash flow management plan, ensuring you have enough cash to meet your financial obligations and make strategic investments in your business.

Every country has its tax regulations which govern domestic transactions. These can be complex and dynamic. For example, if you provide consulting services in the US, you must comply with their tax regulations, <a href="https://www.skydo.com/blog/how-to-claim-input-tax-credit-refund-in-india?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">file tax returns</a>, and withhold taxes on payments made to the Indian business. However, keeping up with tax laws in different countries is time-consuming and costly.

A CA can help you understand these laws and <a href="https://www.skydo.com/blog/ensuring-financial-compliance-5-tips-to-safeguard-your-businesss-finances?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">ensure compliance</a>. They can help you understand the difference between withholding taxes for domestic and import/export transactions. They can also help businesses with the necessary documentation, such as <a href="https://www.skydo.com/blog/form-15ca-cb?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Form 15CA and Form 15CB</a>, which are required for making international payments.

Exporting your services to countries with unique financial requirements, such as different payment methods and invoicing practices, is challenging.&nbsp;

For example, a US-based client may prefer a specific payment method that is not common in India. You need to ensure they are set up to receive payment through the client's preferred method, whether it is a wire transfer, credit card, or another method. You must be aware of any charges involved when accepting payments through these avenues.

A CA can help you navigate the invoicing and payments process and ensure they comply with all regulatory requirements.

Concerning payment methods, Rohit Khurana, a Chartered Accountant professional and finance lead at Skydo, explained, “A CA can help you to understand the costs involved across the different payment methods. There are some costs that are visible and apparent, but there are some costs that are not apparent, like FX markup, etc. In payment methods, a CA can guide you to analyse regulatory mechanisms and cost comparisons.”

After making international payments, businesses need to comply with the Foreign Exchange Management Act (FEMA) regulations. One of the key requirements under FEMA is filing the <a href="https://www.skydo.com/blog/all-you-need-to-know-about-FIRC-a-complete-guide?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Foreign Inward Remittance Certificate (FIRC)</a> with the bank. A <a href="https://www.skydo.com/blog/chartered-accountants-approve-skydo-for-seamless-gst-refunds?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Chartered Accountant (CA)</a> can help you comply and avoid penalties.

Additionally, the Goods and Services Tax (GST) is a crucial part of business in India. All businesses, including tech export businesses, must comply with GST regulations. Although there is no GST payable on invoices denominated in foreign currency, a CA can help you understand the payments of reverse charges and how to claim refunds, among other regulations.

To avoid tax penalties, Rohit Khurana, a chartered accountant professional and finance lead at Skydo, suggests, “Any payment channel you are using needs to ensure that the channel provides you FIRC for all the foreign payments. If the Income Tax Department charges you for not paying the GST, you can provide FIRCs for all your foreign payments.”

5. Claiming Subsidies and Incentives Applicable

The Indian government offers various subsidies and incentives to promote exports. However, the challenge lies in the right way to claim them. A good CA can help you understand these and help you assert their benefits.

For example, the government offers various export promotion schemes, such as the Merchandise Exports from India Scheme (MEIS) and the Service Exports from India Scheme (SEIS).&nbsp;

Also known as the price that one company's subsidiary charges another subsidiary for goods or services, it can be complex, especially for tech export businesses operating in multiple countries. A CA can ensure that you follow the proper transfer pricing guidelines, which helps you avoid potential penalties and get a fair price for your goods or services.

This step is crucial in setting up a tech export business. A CA helps you choose among the various legal structures available, such as Limited Liability Partnership (LLP), Private Limited Company (PLC), Sole Proprietorship, and One Person Company (OPC).

CAs can help businesses develop Standard Operating Procedures (SOPs), which can help ensure that repetitive tasks are standardised, saving time and preventing human error.

CAs ensure that your financial records are accurate, up-to-date, and compliant with relevant laws and regulations. It helps eliminate the need for in-house high-cost resources until your business is large enough to support a full-time team.

“It's important to bring diverse perspectives and strategies to your business, including cross-border expertise and a global mindset. With this approach, you can navigate international tax laws and other challenges and stay competitive in a global marketplace,” states CA Ravi Mamodiya.

If you're running a business that deals with international transactions, we know how tough it can be to manage payments and currency exchange. That's where Skydo comes in.

We’re a payment partner that can help simplify things and save money.

One of the ways we can help you is by providing competitive FX rates for transactions. This means you won't have to worry about paying high conversion fees or dealing with unfavourable foreign exchange rates. We also eliminate the need for multiple bank accounts in different currencies, saving you time and hassle.

Skydo can help you streamline invoice payments and manage your cash flow so you can focus on growing your business.&nbsp;

With our user-friendly platform, you can track payments in real-time and stay on top of your finances.

International trade is a highly competitive arena where every opportunity counts. By working with a trusted chartered accountant, you can streamline your business’s financial operations, reduce costs, and improve profitability. Look for professionals with expertise in navigating complex financial regulations, optimising tax planning, and ensuring regulatory compliance.&nbsp;

Furthermore, with the right payment partner, you can automate your business’s payment processing, reduce errors and fraud, and improve cash flow. When choosing a payment partner, look for a provider offering flexible, scalable solutions tailored to your specific needs. The provider should have a proven track record of reliability and security, with robust fraud detection and prevention measures in place.&nbsp;

Q1. Why do I need a chartered accountant for my tech export business?

Ans: A chartered accountant brings expertise in financial management, compliance, and taxation, ensuring your tech export business adheres to regulations, maximises profits, and maintains financial health.

Q2. What specific services can a chartered accountant offer to my tech export business?

Ans: Chartered accountants can provide services such as tax planning, financial audits, risk management, and advice on international transactions. They play a crucial role in ensuring compliance with complex regulations in the tech export industry.

Q3. How can a chartered accountant assist in optimising tax liabilities for my tech export business?

Ans: Chartered accountants specialise in tax planning strategies, helping your tech export business minimise tax liabilities legally. They can identify tax incentives, credits, and deductions that apply to the tech industry, ensuring you retain more of your earnings.

Q4. How does a chartered accountant help in managing cross-border transactions for my tech exports?

Ans: Chartered accountants understand the intricacies of international finance and can guide your business through the complexities of cross-border transactions, ensuring compliance with regulations, mitigating risks, and maximising financial efficiency.

Q5. Can a chartered accountant help in budgeting and financial forecasting for my tech export business?

Ans: Yes, chartered accountants play a crucial role in budgeting and financial forecasting. They analyse historical data, market trends, and business goals to create realistic financial plans, helping your tech export business make informed decisions and achieve long-term success.

Q6. How can a chartered accountant assist in risk management for my tech export business?

Ans: Chartered accountants evaluate potential risks and implement strategies to mitigate them. Whether it's currency fluctuations, regulatory changes, or market uncertainties, they help your tech export business navigate challenges and maintain financial stability.

Q7. Will a chartered accountant help in preparing financial reports for stakeholders and investors?

Ans: Absolutely. Chartered accountants are skilled in preparing accurate and comprehensive financial reports. This is vital for gaining investor confidence, meeting regulatory requirements, and providing stakeholders with a clear picture of your tech export business's financial performance.

Q8. How can a chartered accountant contribute to the overall growth and strategy of my tech export business?

Ans: Chartered accountants act as financial advisors, helping your tech export business make strategic decisions based on sound financial analysis. Their insights into financial data and market trends contribute significantly to the overall growth and success of your business.

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When making payments to non-residents, you must deduct a certain tax percentage at the source as per Section 195 of the Income Tax Act.

Additionally, effective management of TDS is paramount for tech exporters to minimise its impact on the bottom line. By optimising tax planning strategies, such as leveraging double taxation avoidance agreements (DTAA), correctly utilising forms 15CA and 15CB, and exploring available exemptions or deductions, you can minimise TDS leakage and preserve their financial resources.

Proactive TDS management ensures compliance with tax regulations, reducing the risk of penalties or legal complications. By understanding the nuances of TDS on foreign payments and adopting effective management strategies, you can positively influence their cash flow, profitability, and overall financial stability in international transactions.



Minimising TDS on foreign payments is a key objective for tech exporters to optimise their financial outcomes. The following strategies can help reduce TDS on these transactions.

1. Double Taxation Avoidance Agreements (DTAA)&nbsp;

DTAA is a bilateral agreement or treaty between two countries to prevent taxpayers from being subject to taxation on the same income in both jurisdictions. DTAA reduces or eliminates taxes in one country for income already taxed in another country.&nbsp;

Leveraging such tax agreements is a paramount strategy for tech exporters aiming to minimise TDS on foreign payments. These international agreements often provide provisions to lower <a href="https://www.skydo.com/blog/decoding-withholding-tax-an-i-t-export-service-providers-toolkit-for-simplifying-international-payments?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">withholding tax</a> rates, optimising financial returns for businesses engaged in cross-border transactions.&nbsp;

By understanding and utilising the provisions of DTAA, tech exporters can minimise their TDS liability.

<a href="https://www.skydo.com/blog/form-15ca-cb/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Form 15CA</a> is a declaration form that provides information about the purpose and nature of the remittance. A qualified <a href="https://www.skydo.com/blog/how-can-the-right-chartered-accountant-help-your-tech-export-business?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">chartered accountant</a> issues Form 15CB certifying the transaction details.&nbsp;

As Section 195 of the Income Tax Act prescribes, these forms ensure the proper reporting of foreign remittances and help determine the applicable TDS rates. Tech exporters should ensure accurate and timely form filing to minimise potential TDS discrepancies.

Effective tax planning minimises TDS on foreign payments for tech exporters. By carefully structuring transactions, exploring available exemptions, and aligning business operations with tax regulations, exporters can strategically reduce the withholding tax burden.&nbsp;

Adopting a proactive and well-informed approach to tax planning ensures that tech exporters retain more of their earnings from international transactions, enhancing overall financial efficiency and competitiveness in the global market.

As of <a href="https://economictimes.indiatimes.com/wealth/tax/new-tcs-rule-to-come-into-effect-from-october-1-2023-finance-ministry/articleshow/101345956.cms">October 1, 2023</a>, a significant update has been implemented regarding Tax Deducted at Source (TDS) in India. The Ministry of Finance has introduced a notable change related to foreign remittances.&nbsp;

There will be no Tax Collection at Source (TCS) on foreign remittances of up to Rs 7 lakh per financial year. This update, outlined in a notification released on June 28, 2023, signifies a restoration of the Rs 7 lakh threshold per individual for TCS on all categories of <a href="https://www.skydo.com/blog/what-is-lrs?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Liberalised Remittance Scheme (LRS)</a> payments.&nbsp;

This threshold applies irrespective of the purpose and includes all modes of payment. Therefore, the first Rs 7 lakh remittance under LRS will not incur TCS, providing relief for individuals engaging in foreign transactions.

A practical guide below features a comprehensive checklist and step-by-step approach to minimise TDS leakage.

Minimising TDS on foreign payments requires careful consideration of legal requirements, proper documentation, and proactive tax planning. By following this practical guide and seeking professional assistance, tech exporters can effectively minimise TDS leakage, optimise their tax position, and enhance their profitability in international transactions.

Minimising Tax Deducted at Source (TDS) on foreign payments is a crucial aspect of financial management for individuals and businesses engaged in <a href="https://www.skydo.com/blog/the-pros-and-cons-of-cross-border-payment-solutions?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">cross-border transactions</a>. By understanding the intricacies of TDS regulations, exploring available exemptions and provisions, and leveraging tax treaties effectively, one can significantly reduce the impact of TDS on international payments.

Implementing proper documentation, ensuring compliance with relevant tax laws, and seeking professional advice when needed are essential steps in the journey to minimise TDS. It's not just about saving money; it's about optimising financial processes and fostering a smoother international business environment.

As the global economy continues to evolve, staying informed about changes in tax regulations and proactively adapting strategies will be key to successfully navigating the complexities of TDS on foreign payments. By adopting a proactive and informed approach, individuals and businesses can not only minimise TDS but also pave the way for more efficient and cost-effective cross-border financial transactions.

Q1. What are the penalties for non-compliance with TDS rules on foreign payments?

Ans. Non-compliance penalties may include interest charges on the unpaid tax amount, penalty levies, and disallowance of expenses. The penalties vary based on the nature and severity of the non-compliance, and it is essential to adhere to TDS rules to avoid these consequences.

Q2. How does the recent change in tax laws affect TDS on foreign payments for tech exporters?

Ans. The recent change in tax laws does not affect TDS on foreign payments for tech exporters. The recent amendment pertains to TCS applicability and has no bearing on TDS.&nbsp;

Q3. Can I claim a refund for TDS on foreign payments? If yes, what is the process?

Ans. Yes, it is possible to claim a refund for TDS on foreign payments if the taxpayer's total tax liability is lower than the TDS amount deducted. The process involves filing an income

Q4. Does the size or nature of my tech export business affect the TDS rules applicable to me?

Ans. The size or nature of your tech export business does not generally affect the TDS rules applicable to you. TDS rules depend on the nature of the payment and the provisions outlined in the Income Tax Act. However, certain requirements or thresholds may vary depending on specific circumstances.

Q5. Are any specific TDS rules for tech exporters that differ from general businesses?

Ans. Yes, certain specific TDS rules for tech exporters may differ from general businesses, such as provisions related to software royalty payments and technical services.

Q6. How to transfer money from the USA to India without paying taxes?

Ans: Transferring money from the USA to India without paying taxes is not advisable, as tax regulations apply. Utilising legal channels, like NRE or NRO accounts, can help manage tax implications.

Ans: LRS, or Liberalised Remittance Scheme, is significant as it allows Indian residents to freely remit a certain amount abroad for permissible transactions, promoting ease of foreign exchange management.

Q8. Are inward remittances taxable in India?

Ans: Inward remittances are generally not taxable in India, as they represent funds received from abroad. However, specific circumstances or types of income may have tax implications.

Q9. Who can receive tax-free foreign remittances in India?

Ans: Indian residents, such as non-resident Indians (NRIs) and those with specified exemptions, can receive tax-free foreign remittances in India, subject to certain conditions and limits.

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Income Tax, an unavoidable facet of your financial life, looms annually like clockwork. The tax filing process can be daunting, given the formidable 23 chapters and 298 sections of the Income Tax Act of 1961 that you must go through.&nbsp;

As a resident earning in India and making domestic transactions, it is relatively easier to comply with all the tax rules. But what if you are a resident with a global business presence and send international payments during the financial year? Tax compliance with regards to&nbsp;<a href="https://www.skydo.com/blog/how-do-you-receive-a-foreign-remittance-in-a-savings-account?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">foreign remittance</a>&nbsp;can get tricky. If you are a resident who has sent money to a non-resident, you must file Form 15CA and 15CB to ensure tax deduction at source. This blog explains both forms and how to ensure effective compliance for foreign remittances.

Form 15CA is a declaration by the remitter, a resident of India, making international transactions and remitting money to a non-resident. The Income Tax Department, under Section 195 of the Income Tax Act, 1961, requires you to collect <a href="https://www.skydo.com/blog/ways-to-ensure-zero-tds-leakage?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Tax Deductible at Source (TDS)</a> from the payments made to non-residents.&nbsp;

Form 15CA creates an effective information processing system for the Indian Tax Department to track foreign remittances and identify your tax liability to avoid withholding taxes.&nbsp;

In early 2023, the Income Tax Department recently revised Rule 37BB, which entails that the authorised dealers/banks should furnish Form 15CA (from the remitter) in case of foreign remittance, failing which the department levies a duty.&nbsp;

The entire list of payments where you do not require filing forms 15CA and 15CB are can be found this <a href="https://incometaxindia.gov.in/Rules/Income-Tax%20Rules/103120000000007406.htm">list</a>&nbsp;by the Income Tax Department.

The Income Tax Department has also created an online facility for remitters to file Form 15CA online and send the submitted form’s copy to the bank as proof of tax clearance from the tax department.

Form 15CA consists of the following four parts.

Part A: You must fill this part if the remittance is chargeable to tax and the aggregate of foreign remittance to non-resident(s) does not exceed Rs 5 lakhs during the financial year.&nbsp;

Part B: You must fill this section if the remittance is chargeable to tax and the aggregate of such foreign remittance to non-resident(s) exceeds Rs 5 lakhs during the financial year. Additionally, the remitter should have an order/certificate u/s 195(2)/195(3)/197 of the Income Tax Act from the Assessing Officer.&nbsp;

Part C: Part C applies if the remittance is chargeable to tax and the aggregate of such foreign remittance to non-resident(s) exceeds Rs 5 lakhs during the financial year, and the remitter has obtained the Form 15CB from a <a href="https://www.skydo.com/blog/how-can-the-right-chartered-accountant-help-your-tech-export-business?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Chartered Accountant</a>.&nbsp;

Part D: Part D applies if the remittance is not chargeable to tax under the provisions of the Income Tax Act.&nbsp;

Here are the steps to<a href="https://www.incometax.gov.in/iec/foportal/sites/default/files/2021-10/Process%20Document.pdf"> File Form 15CA of your income tax return online</a>:

Form 15CB is a certificate that the remitters must obtain from a licensed Chartered Accountant to certify the liability of withholding tax and the details of payments, such as rates with the Tax Deducted at Source (TDS). Form 15CB is mandatory for uploading the Part C of Form 15CA with the Income Tax Department.&nbsp;

The main aim of submitting Form 15CB is to seek help from a Chartered Accountant who certifies that the remitter has followed the provisions of the Income Tax Act and the Double Taxation Avoidance Agreement – DTAA concerning tax deductions while making international transactions with non-residents.

Form 15CB includes the following details:

Some foreign remittances do not require the remitter to submit Form 15CB if:

<a href="https://www.incometax.gov.in/iec/foportal/sites/default/files/2021-10/Process%20Document.pdf">The process of obtaining the 15CB form</a> is as follows:

Earlier, a person remitting money to a foreign national was required to furnish a certificate as specified by the RBI, but the process was cumbersome to manage and resulted in tax withholding. Now, with Forms 15CA and 15CB, the Income Tax Department can collect information about remittances chargeable and collect taxes when the resident makes foreign remittances.

The Tax Deducted At Source (TDS) through Form 15CA helps to curb illicit outflows and money laundering activities while strengthening the government’s efforts to track cross-border transactions. Consequently, Form 15CB allows certification for the remitter with adherence to the Foreign Exchange Management Act (FEMA) and the Double Taxation Avoidance Agreement – DTAA.&nbsp;

Details Required For Filing Form 15CA and 15CB&nbsp;

Filing Forms 15CA and 15CB require some information and documents on the part of the remitter for accurate filing. If you have made international transactions, you will require the following details to fill out both forms.

Revised Rules for Submitting Form 15CA and 15CB effective from April 1, 2016

To simplify filing both forms, we consulted with our Head of Finance and CA,<a href="https://www.linkedin.com/in/carohitkhurana/"> Rohit Khurana</a>, to answer all the burning questions. Here is what he had to say:&nbsp;

International transactions are vitally important for an individual doing business in foreign countries or a company with a global presence. However, with earnings comes the compliance aspect, which is an integral part of the Indian tax system.&nbsp;

Form 15CA and 15CB ensure that a resident remitter can comply with all the relevant tax laws and continue to remit internationally. Since the Indian Tax Department has created an online method to file both forms, it has become easier to adhere to the compliance aspect and certify the TDS through a licensed CA.

Q1. What types of documents are required while filing Form 15CA?

Ans: When filing Form 15CA for foreign remittances, you will need to provide the following details:

Q2. What will happen in case of non-compliance with Form 15CA and Form 15CB?

Ans: Non-compliance with Form No. 15CA and Form No. 15CB can lead to penalties. If the remitter fails to file the relevant forms, the assessing officer can levy a penalty of Rs 1 lakh.

Ans: Form 15CB is used by remitters who are making foreign remittances and are liable to pay Tax Deducted at Source (TDS). It is a certificate issued by a Chartered Accountant to certify the withholding tax liability and payment details.

Q4. Is it compulsory to file Form 15CB before filing Part C of Form 15CA?

Ans: Yes, it is compulsory to file Form 15CB before filing Part C of Form 15CA. Part C of Form 15CA requires the remitter to have obtained Form 15CB from a Chartered Accountant to certify the withholding tax liability, and this certificate is a prerequisite for completing Part C of Form 15CA.

Q5. How can Form 15CA and 15CB be revised or cancelled?

Ans. Form 15CA can be withdrawn within 7 days from submission, with the withdrawal link accessible on the Assessee's website.

Ans. Individuals or entities, except companies, responsible for payments to non-residents or foreign companies, must provide the necessary details in Form 15CA.

Q7. What scenarios do not require filing Form 15CA?

Ans. Exceptions for filing Form 15CA include individual remittances not needing RBI approval and transactions falling under RBI-specified purposes codes.

Q8. Is submission of Form 15CB compulsory?

Ans. Form 15CB is necessary only if remittances exceed Rs. 5 lakh annually, requiring an accountant certificate as per Section 288 of the Income Tax Act, 1961.

Ans. Chartered Accountants (CAs) registered on the e-filing portal handle Form 15CB, enabled by assigning Form 15CA from the taxpayer.

Ans. Form 15CB requires e-verification using the CA's Digital Signature Certificate (DSC) registered on the e-filing portal. There's no set timeframe, but it must precede the remittance.

What are Form 15CA and 15CB, and how do you file them Th

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Since the government introduced <a href="https://www.skydo.com/blog/gst-requirements-international-service-sales?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Goods and Services Tax (GST)</a>, all companies above a certain annual revenue threshold must apply for and obtain a unique GSTIN number. It is well known that GST has simplified transactions and taxation for businesses, especially those operating across multiple states. One of the primary reasons for this simplification is the concept of e-invoicing.&nbsp;

In simple terms, e-invoicing refers to transmitting your invoice data to the GST portal to record the transaction instantly in the GST system. Previously, transactions were recorded when the business filed its tax returns. This system ensures that data is transmitted to the GST department when you invoice customers.&nbsp;

Over the years, this threshold for mandatory e-invoicing has been consistently brought down from initially covering only companies above Rs. 500 crores of annual turnover to Rs. 10 crores. The government is further planning to reduce it to a threshold of Rs. 5 crores.

If your business is likely to cross this threshold this financial year, let's dive into the details of e-invoicing and prepare your organisation to get into the e-invoicing regime.

What is e-Invoicing Under GST, and Who Needs to Generate It?

E-invoicing refers to the electronic invoicing system mandated by the GST law for certain notified GST-registered businesses, where B2B invoices and a few other documents must be authenticated electronically by GSTN.

It's a system where B2B invoices and other relevant documents are attested electronically by <a href="https://www.skydo.com/blog/understanding-gstin-requirements-for-export-businesses-in-india?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">GSTN (Goods and Services Tax Network)</a> for further use on the common GST portal. Initially implemented for specific categories of persons, mostly large enterprises, e-invoicing has now been expanded to cover mid-sized and small businesses as well.

With e-Invoicing, you don't need to generate invoices on the GST portal. Instead, you submit an already generated standard invoice on a common e-invoice portal. This automates multi-purpose reporting with a one-time input of invoice details.

Under the electronic invoicing system, the government issues an identification number (IRN) against every invoice by the Invoice Registration Portal (IRP) managed by the GSTN. All invoice information gets transferred from this portal to the GST portal and the e-way bill portal in real-time.&nbsp;

Therefore, it eliminates the need for manual data entry while filing GSTR-1 returns and generating part A of the e-way bills. You paste the IRN on the invoice and issue it to your customers.

Update: Government notification from 10 May 2023&nbsp;

The Central Board of Indirect Taxes and Customs (CBIC) has recently announced a significant update to the e-invoicing regulations through Notification No.10/2023 - Central tax. They reduced the threshold to INR 5 crores with effect from 1st August 2023.&nbsp;

Those who understand e-invoicing will know that if your business had an aggregate turnover of Rs. 5 crores or more in the previous year, you’re now supposed to issue an e-invoice.

Let’s understand these new rules and the implications of e-invoice applicability regulation. We will delve into the changes, examine the reasons behind the government's implementation of e-invoicing, and explore the benefits and challenges you may encounter. Additionally, we will provide a recommended Standard Operating Procedure (SOP) to help you navigate the compliance process effectively.

This table provides an overview of the previous compliance thresholds and their respective effective dates. It helps visualise the progressive reduction in the compliance threshold leading to the upcoming change on 1 August 2023.

The progressive reduction in the compliance threshold highlights the government's commitment to expanding the adoption of e-invoicing across businesses of varying sizes.

Consider a manufacturing company with an aggregate turnover of INR 6 crores in the preceding financial year. Under the previous threshold of INR 10 crores, this company would not need to generate e-invoices. However, with the new threshold of INR 5 crores coming into effect from 1st August 2023, this company will now fall within the ambit of e-invoicing compliance.

Who Must Generate the E-invoice and When?

The e-invoice applicability depends on your turnover criteria. The table below summarises the different phases and their respective turnover criteria.

Note: If your previous year's annual turnover was below the latest threshold limit (currently Rs. 10 Cr) but increased beyond this limit in the current year, e-Invoicing would apply from the beginning of the next financial year.&nbsp;

However, if your previous year's turnover exceeds any newly announced threshold, then you must comply with the e-invoicing from the date of notification itself. To simplify it further, on the date of a particular notification, you have to check your previous year's turnover and assess if it falls under the threshold limit.&nbsp;

For instance, ABC Ltd has a turnover of Rs. 12 Cr in FY 21-22. Notification 1/2022 was announced on 01.04.2022, mentioning a threshold of Rs. 20 Cr. Since ABC LTD's turnover was less than 20 Cr in the previous year, they are not obliged to follow e-invoicing in FY 22-23.&nbsp;

After a few months, notification 17/2022 was announced on 01.10.2022, mentioning a threshold of Rs. 10 Cr. Here, irrespective of current year turnover, ABC LTD will have to follow e-invoicing with effect from 01.10.2022 as their previous year's turnover is more than the threshold limit of Rs. 10 Crs.&nbsp;

The reduced compliance threshold for e-invoicing will impact many businesses in India. To understand if it impacts you, it's important to understand the term "aggregate turnover."&nbsp;

Aggregate turnover refers to the total value of all taxable supplies (including exports) and exempt supplies a taxpayer makes. It includes both goods and services provided by the business.

For example, consider a SaaS company with 30%, global clients. If its total sales in the last financial year are above 5 scores (including zero-rated and exempt supplies), it will be subject to the e-invoicing requirement from 1 August 2023.

The reduction in the compliance threshold will result in a broader scope of businesses being impacted by e-invoicing. It will encompass many businesses with aggregate turnovers exceeding INR 5 crores, including many mid-sized enterprises and expanding small businesses. Understanding the e-invoice applicability is crucial for these businesses.

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