The government has notified an e-invoicing system under the goods and services tax (GST) regime which makes it mandatory for large businesses with turnover of over Rs 500 crore to submit sales invoices electronically.
The notification comes as a relief for small businesses as the turnover threshold has been hiked from the earlier proposed Rs 100 crore and above for mandatory e-invoicing. The system is expected to be rolled out from October 1, leaving barely a couple of months for businesses to modify their systems.
The e-invoicing mechanism would also help business and taxpayers by pre-populating the returns, resulting in reducing reconciliation problems.
There are about 7,500 GST identification numbers for businesses with a turnover of Rs 500 crore and above.
M S Mani, partner, Deloitte India, said modifying systems to support e-invoicing in the prevailing working-from-home environment could be challenging for some businesses and hence there was a need to prepare early.
Abhishek Jain, tax partner, EY, said with this release, the government reimposes its objective of implementing e-invoicing from October 1 for large businesses. “With only 60 days left for this compliance, businesses would need to quickly evaluate the ERP changes needed and plan implementation well to ensure compliance from October 1,” said Jain.
The government plans to roll out e-invoicing in phases. It had earlier planned to make it mandatory from April 1 for businesses with a turnover of Rs 100 crore and above, but the decision was deferred due to lack of IT preparedness.
“We will not do it for (businesses with) Rs 100 crore sales but will start with Rs 500 crore and as it stabilises, we will do it for (businesses with) Rs 100 crore sales and more,” Yogendra Garg, principal commissioner, GST policy at the Central Board of Indirect Taxes and Customs, had said last week.
The government had said the basic aim behind adopting the system is to facilitate convenience to the taxpayers by further simplifying the GST return system.
“E-way bills were implemented to track movement of goods and catch hold of any clandestine movement. Similarly e-invoice would track flow of transactions and identification of revenue leakages on real time basis,” said Rajat Mohan, partner, AMRG Associates.