GST e-invoice system on govt portal to reduce tax evasion
Govt plans to launch GST e-invoices to curb tax evasion
In order to pull the plug on GST evasion, the government is working on a
mechanism wherein businesses with a turnover exceeding a particular amount will
have to generate electronic invoice either on a government portal or on the
Goods and Services Tax (GST) portal.
To start with, businesses above a specified
threshold will just get a unique number for every electronic invoice or
e-invoice generated. This number can be matched with the invoices reported in
the sales return and taxes paid
GST officers are working on a system where businesses
above a certain turnover threshold will have to generate ‘e-invoice’ on
government or GST portal for every sale, thereby effectively reducing the room
for tax evasion.
To start with, businesses
above a specified threshold will just get a unique number for every electronic
invoice or e-invoice generated. This number can be matched with the invoices
reported in the sales return and taxes paid, an official said.
Going forward, businesses will
be required to generate full electronic-tax invoice or e-invoice recording
entire value of sales.
The official said that
businesses beyond a turnover threshold would be provided software which will be
linked to GST or a government portal for generating e-invoice. The threshold
can also be fixed on the basis of the value of the invoice.
“The requirement of e-invoice
generation could be either on the basis of turnover of the registered person or
value of the invoice. The thinking is, ideally, it should be based on the
turnover threshold so as to avoid splitting of sales,” an official told PTI.
GST officers are working on a
system where businesses above a certain turnover threshold will have to
generate ‘e-invoice’ on government or GST portal for every sale, thereby
effectively reducing the room for tax evasion.
To start with, businesses
above a specified threshold will just get a unique number for every electronic
invoice or e-invoice generated. This number can be matched with the invoices reported
in the sales return and taxes paid, an official said.
Going forward, businesses will
be required to generate full electronic-tax invoice or e-invoice recording
entire value of sales.
The official said that
businesses beyond a turnover threshold would be provided software which will be
linked to GST or a government portal for generating e-invoice. The threshold
can also be fixed on the basis of the value of the invoice.
“The requirement of e-invoice
generation could be either on the basis of turnover of the registered person or
value of the invoice. The thinking is, ideally, it should be based on the
turnover threshold so as to avoid splitting of sales,” an official told PTI.
Giving example, the official
said that if the minimum invoice value is fixed at ₹1,000, there is a
possibility of businesses of splitting the bills to avoid the invoice-based
threshold cap.
E-invoice generation method
will be similar to the one being followed for e-way bill on the
‘ewaybill.nic.in’ portal or payment of Goods and Services Tax on the GSTN
portal.
The proposed system of
e-invoice will eventually replace the requirement of a generation of e-way bill
for movement of goods, as invoices would be generated through a centralised
government portal. Currently, the e-way bill is required for moving goods
exceeding ₹50,000.
The official further said that
once full e-tax invoice starts getting generated, it would significantly ease
the burden of return filing by businesses as invoice wise data would be
auto-populated in the return forms.
“We will have to study global
models followed by countries like Latin America, South Korea, and Europe. We
will also look at ways to incentivise businesses to adopt the method of
e-invoice generation,” the official said.
An officers committee, comprising
central, state tax officials and GST Network Chief Executive, has been set up
to look into the feasibility of introducing e-invoice system to streamline the
generation of invoices and easing compliance burden. The committee will
finalize an interim report next month.
The proposed ‘e-invoice’ is
part of the exercise to check GST evasion. With almost two years into GST
implementation, the government is now focussing on anti-evasion measures to
shore up revenue and increase compliance.
There are over 1.21 crore
registered businesses under the GST, of which 20 lakh are under composition
scheme.
AMRG & Associates Partner
Rajat Mohan said e-invoicing would help in avoiding duplication of efforts and
minimize manual intervention in filing and checking of tax returns.
“To incentivise businesses to
adopt a new system, the tax department could limit the frequency of mandatory
departmental audits in case procurements are made on basis of e-invoices,”
Mohan said.
Our View
In Few Days No
More Physical Invoice : Government likely to begin e-invoicing under GST
Making E Invoice Mandatory will surely increase compliance burden
for SMEs. Govt should make it mandatory for turnover of more than one crore and
exempt SMEs.
E Invoice will surely help to check Tax Evasion and bring in better
compliance.
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Thanks for sharing this content. Online Invoicing Application also provide feature to do single payment for multiple invoices, online payment, cross-platform synchronization etc.
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