To Curb Tax Evasion and Integrate Data, E-Invoicing to be Mandatory in GST Regime

In a move to combat under-reporting or misreporting tax invoices and integrate data, Electronic Invoice System will be implemented for invoicing under the Goods and Service Tax (GST) regime. From the new fiscal year, i.e. April 1, 2020, for businesses having a turnover of more than Rs. 100 crore, e-invoice system may become compulsory to implement for B2B transactions.

Crux of the Matter

1. Since the implementation of GST in 2017, tax authorities have detected tax fraud cases worth Rs. 45,682.86 crores. Around 1000 cases were booked for tax evasion.

2. Owing to the small quantum of collection of GST as compared to the predictions, the e-invoice system can be seen as a way to curb tax evasion and misreporting of GST bills, and to effectively integrate GST data. E-invoice system is also aimed at integrating the e-way bill system.

3. Businesses having a turnover of more than Rs. 500 crore can become a part of the trial run of the e-invoice system from January 1, 2020. Businesses with a turnover of more than Rs. 100 crore can voluntarily opt for e-invoicing from February 1, 2020.

4. For businesses issuing B2C invoices and with more than Rs. 500 crore turnover will be required to install a Quick Response Code (QR) scanner from April 1, 2020.

5. Central Board of Indirect Taxes and Customs (CBIC) has laid out guidelines on how to use the new system. Frequently Asked Questions (FAQs) have been updated on the GST Network website for the reference of businesses, tax consultants, and software developers.

6. Given the troubles faced by small businesses in effectively implementing nuances of GST, the technological hassle that e-invoicing may bring to such small businesses needs to be catered with utmost care.

Curiopedia

GST Implementation in India – Technicalities of GST implementation in India have been criticized by global financial institutions/industries, sections of Indian media and opposition political parties in India. World Bank’s 2018 version of India Development Update described India’s version of GST as too complex, noticing various flaws compared to GST systems prevalent in other countries; most significantly, the second-highest tax rate among a sample of 115 countries at 28%. GST’s implementation in India has been further criticized by Indian businessmen for problems including tax refund delays and too much documentation and administrative effort needed. More Info

Curated Coverage

1. Indian Express – GST e-invoice system to be rolled out from April 1 next year

2. Business Line – Coming from January 1, machine-readable GST e-invoices

#Economy #GST