E-invoicing system kicks in from 7 January 2020 for a specific set of taxpayers as the GSTN has released the APIs for integration. Those taxpayers who earn an annual turnover of over Rs 500 crore have an option to generate an e-invoice through system integration with Invoice Registration Portal (IRP).
GSTN is regularly holding seminars in various cities to handholding the stakeholders about the functioning of the big system across India. The recent one was held on 8 January 2020 at Mumbai in association with Confederation of Indian Industry (CII). There were certain clarifications given therein.
An important update that GSTN has given is that specific sectors will be kept out of the e-invoice purview. Banks, telecom companies, insurance companies, airlines and armed forces are likely to be exempt from e-invoice requirement, thus saving substantial compliance costs for them.
These entities have a firsthand customer interaction on a broad scale across India. The exemption shall be soon notified for the sake of avoiding complexities in the billing and business process flow for these entities. The banks and insurance companies are currently issuing consolidated GST invoices usually monthly.
From 1 April 2020, companies with an annual aggregate turnover of over Rs 100 crore must mandatorily issue e-invoices. The government is adopting the digital means of filing of invoices under goods and services tax (GST) regime to curb tax evasion and fraudulent GST credit claims besides increasing GST revenue collection.
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The GSTN’s conference organised on 8 January 2020 also threw some light upon the functioning of e-invoicing and the uses of the same.
The e-invoice format earlier did not have a place for reporting the Part-B details of the e-way bill of the vehicle details for transportation. The GSTN has clarified to issue new schema that will consist of this information too. Further, GSTN promises to generate the invoice reference number along with the e-invoice in TAT of milli-seconds.
Moreover, during the first phase of e-invoicing implementation, the e-invoice will not be sent via email to the corresponding buyers. GSTN has clarified the invoice reporting month for e-invoice reporting in the new returns. Where the invoice of a particular month is uploaded in a different month, then the ANX-1 will bear the invoice detail in the month of upload and not the month related to the invoice date.
All said, there are specific issues about the e-invoice system that still needs to be addressed. They include the treatment of delivery challans under the e-invoicing system, the period available for cancellation, currently of 24 hours requires to be relooked.
There are inherent complexities in tuning the ERP systems to identify and push B2B and B2C invoices for different process flow. Since B2C invoices currently do not require the e-invoice generation, it is pertinent to customise the ERP system for this aspect. It ultimately leads to additional compliance costs for businesses who own ERP systems rather than hiring one from Application service providers (ASP).
For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in
Annapoorna, popularly known as Anna, is an aspiring Chartered Accountant with a flair for GST. She spends most of her day Singing hymns to the tune of jee-es-tee! Well, not most of her day, just now and then.
