The GST Implementation Committee exempted companies with up to 500 crore revenue from the mandatory GST e-invoicing, which was a huge relief. To businesses with up to Rs 100 crore revenue, relief was previously received. For impact from 1 October 2020, the threshold will, therefore, be raised five times higher. To record sales details, reduce errors, automate data entry, and improve compliance between tax officers and businesses, the e-invoicing process is being implemented.
The new feature of e-invoicing was also aimed to help auto-populate certain forms, which may reduce the efforts of businesses. Nonetheless, the recent decision on e-invoicing compliance to raise the threshold will allow smaller businesses more time to embrace this new method.
Yogendra Garg, principal commissioner, GST reform, said that the emphasis is on easing compliance burden and compliance cost and several such announcements can be made in the coming years. The electronic capturing of invoices leads to the feeding of data directly into a business accounts payable system without the chance of error, helping companies to be more productive and less prone to errors.
India has seen a dramatic leap in recent years from 50 lakhs to 1 crore in registered small and medium-sized enterprises (SMBs), and this figure is rising every day. Automating small and medium-sized businesses, as such, is not only a simple challenge, but e-invoicing can be a source of options for them.
E-invoicing will improve this, not only by helping businesses cut costs but also by ensuring that firms are paying easily and open new ways to fund, added Rajesh Gupta. Although several cases of tax evasion in the past have been reported by GST Intelligence, the government is intensifying attempts to omit the scope of these crimes. A positive move by all firms, as it will stop the tax manipulation process, is the latest GST e-invoice system whereby businesses with revenue of Rs 500 crore and more must submit all invoices on the consolidated government site from 1 October.
Garg said that GST is working on a proposal to provide companies with a system of how much input tax credit (ITC) a taxpayer can provide.
The vision of 4th year GST is a reduction in the compliance strain and e-invoice is going to help, “he said.” They aim to make life simpler for taxpayers.
Garg says that central tax officers have qualified state officials to perform audits, some of the states have strong approaches that we are implementing, concerning the GST audits.