e-invoicing implementation: Clarity from an interview with GSTN

GSTN is affirmative of implementing the e-invoicing system from the 1st of April 2020. As per the GSTN’s data, around 1,367 taxpayers and 40 GSPs have registered on IRP till the 18th of February 2020, with the generation of over 1,50,000 IRNs.

Mr Pankaj Dikshit, senior vice president-IT infrastructure at GSTN, was interviewed recently by the editorial team of ETCFO. He has reemphasised the readiness of GSTN systems and claims to not further extend the implementation date beyond the 1st of April 2020. Also, he has stated that the GSTN system is capable of scaling, and allows the generation of over one crore e-invoices in a day, expandable up to 10 crores if necessary. 

A ground reality shows that taxpayers are still struggling with complexities of multiple GST compliances. They are yet to align their IT systems for e-invoice generation, and there is 100% dependency on GSTN. However, the GSTN has advised CFOs of the applicable companies, especially companies with a turnover of over Rs 500 crore, to nudge its ERP software providers to adopt the changes quickly. An early transition would be ideal for effective change management.

The outcome of the interview is as follows:

1. GSTN claims to be prepared to address any capacity load of invoices, i.e. B2B invoices generated and reported by the GST registered taxpayers in their GSTR-1. The GST return statistics have helped in building a competent system for e-invoicing.
2. A staggered deployment for e-invoicing project will be carried out in the following phases:
   1. Business having annual turnover of more than Rs 500 crore: Trial phase from the 1st of January 2020 and mandatory from the 1st of April 2020.
   2. Business having annual turnover of more than Rs 100 crore: Trial phase begins from the 1st of February 2020 and mandatory from the 1st of April 2020.
3. Unlike the e-way bill website, taxpayers need not visit the Invoice Registration Portal (IRP). But they must generate JSON files of their invoices, upload them on IRP and get a signed e-invoice only via Application Programming Interface (APIs). The generation of IRN will be near-real-time (sub 100, milliseconds).
4. In addition to http://einvoice1-trial.nic.in/, another IRP is being planned for a launch soon.
5. The APIs are being developed and made available at https://einv-apisandbox.nic.in as and when they are ready. Meanwhile, large enterprises, GSP/ASPs and software providers are testing integration on the sandbox.

The e-invoicing system shall apply to all those companies having aggregate turnover above a specified amount. The limit is Rs 100 crore as calculated for the previous financial year, i.e. FY 2018-19 at a PAN-level. Applicable taxpayers must register on the IRP entering the GSTIN and captcha code. However, the existing users of e-way bill system may use their credentials to log in.

Also Read: GSTIN Must Be Mentioned in Export and Import Documents

While the new system is attractive due to perks attached to it, the implementation could have many bottlenecks. Taxpayers may find it challenging to ensure that their ERP systems are up-to-date and functional to address the e-invoicing requirements.

The new GST return system is also positively becoming mandatory up from April 2020 period onwards. A large chunk of taxpayers will surely be overwhelmed by the sudden shift. We can expect a further push in the new return implementation by a month or two. If not, then managing two new systems, parallelly is not less than a big compliance challenge for taxpayers.

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in