Implementation of GST e-Invoicing With New Threshold of Rs.500 crore

The government is planning to make the GST e-invoicing mandatory for entities with more than Rs.500 crore turnover from 01 October 2020. Mr Yogendra Garg, principal commissioner, GST policy, at the Central Board of Indirect Taxes and Customs (CBIC) said that the threshold for mandatory e-invoicing planned earlier was Rs.100 crore.

Mr Garg, at a virtual conference, spoke on ‘Three Years of GST’ – whether there is a need for further streamlining of the new indirect tax system. He said that the government will not implement the e-invoicing for entities with Rs.100 crore turnover but will commence it with entities with Rs.500 crore and as it stabilises, they will do it for entities with turnover of Rs.100 crore or more. He added that the details of the changes would be notified in a week.

In case of urgent situations, the GST implementation committee can take decisions on behalf of the Council, and the committee has recommended that the indirect tax authority could go ahead with the 01 October 2020 deadline for rolling out e-invoicing but with a higher turnover threshold.

Mr Garg said that the focus of the authorities in the fourth year of GST would be on easing the compliance burden. He added that the vision for the fourth year is to make compliance burden and the compliance cost lower. Also, stated that there would be a lot of announcements regarding this.

Also Read: Govt. plans to drop new GST return system & improve present returns

E-invoicing is a portal designated by GSTN, which will automate a lot of data entry, reduce mismatches and errors, instantaneously captures sales details in the system and improves the compliance. The e-invoicing also improves the tax officials’ trust in the compliance of entities and reduces chances of audits or surveys. It would also help in auto-populating few forms which play a crucial role in the submission of GST returns. The GST authorities planned e-invoicing only for Business to Business (B2B) transactions.

Initially, the government interlinked the e-invoicing and the new GST return system, and it has earlier issued the API’s for the same. However, due to the prevailing economic situation in the country, the government decided to improve the existing return system instead of implementing the new return system. Now, the government has to revise the API’s and provide it to the concerned entities at the earliest for smooth implementation of the e-invoicing.

The increase in the turnover threshold will enable large entities to proceed with adopting the new e-invoicing system while it gives ample time for the small entities. The CBIC should continuously monitor the e-invoicing system once it is implemented. Also, it should provide continuous support to the entities in the process of adopting the e-invoicing system.

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