Standardisation and inter-operability to reduce disputes, cut processing costs
The threshold of issuing GST e-invoice (electronic invoice) has been lowered to Rs. 20-crore turnover from Rs. 50 crore earlier by the Central Board of Indirect Taxes and Custom (CBIC) .
By the new rule, which is to kick in from April 1, businesses with turnover of Rs. 20 crore or more will have to issue e-invoices. If the invoice is not valid, not only the recipeint cannot claim Input Tax Credit (ITC) but will also face a penalty.
Simplifying norms
Experts say this amendment seems to be to dovetailed to the government’s digital economy agenda. Bipin Sapra, Tax Partner with EY India, said: “By making it mandatory for all assesses whose turnover is more than Rs. 20 crore to issue e-invoices, the government has expanded the compliance automation to a larger set of taxpayers, which will not only simplify compliance but also plug revenue leakages on account of input tax credit frauds.”
E-invoices are formatted to be machine-readable, with B2B invoices authenticated electronically by the Goods & Services Tax Network for further use on the common GST portal. Under the electronic invoicing system, an identification number is issued against every invoice by the Invoice Registration Portal (IRP) managed by the GSTN.
Standardised format
The government has already made it clear that the new mandate will not add financial burden on businesses as GSTN has empanelled seven accounting and billing software products that provide basic accounting and billing system free-of-cost to small taxpayers.
Several advantages
Tax officials say e-invoice has advantages such as auto-reporting of invoices into GST return and auto-generation of e-way bill. E-invoicing will also facilitate standardisation and inter-operability leading to reduction in disputes, improve payment cycles, reduction of processing costs and thereby improving overall business efficiency.
Businesses use various accounting/billing software generating and storing invoices in their own electronic formats. E-invoicing aims at machine-readability and uniform interpretation. To ensure inter-operability of e-invoices across the GST eco-system, an invoice standard is a must. By this, e-invoices generated by one software can be read by any other software, thereby eliminating the need of fresh/manual data entry.
aniltikotekar4sme.com 