GST e-invoicing: Gradual roll-out will ease the pain

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The Goods and Services Tax regime, which was launched in July 2017, seemed to be settling down when the Covid-19 pandemic dealt a blow to the economy, bringing businesses to a standstill in April and May.

GST compliance also dipped in April and May, as seen in the adjacent graph, less than 10 percent of GSTR 3B returns for March, April and May were filed until June.

Of the GSTR 1 returns due for March, only around 50 lakh returns were filed up to June, compared with over 80 lakh returns filed at the end of every quarter.

It is quite clear that GST compliance has taken a knock during the lockdown as the movement restriction along with funds crunch made payment of tax difficult. The leeway given to businesses in tax filing also contributed to the lowered compliance.

Amidst all this businesses are questioning the need for the introduction of e-invoicing regime from October 1, 2020. E-invoicing involves reporting details about GST invoices, credit notes, debit notes for all B2B supplies and exports on a special government notified portal. This upload is besides the regular invoices created on their own accounting/billing/ERP systems.

That said, smaller businesses are unlikely to be hurt since only taxpayers with aggregate turnover exceeding 500 crore in a financial year have to generate e-invoices. There are almost 11 lakh entities with annual turnover under 5 lakh, that generate an average of just one invoice per day. At the other end of the spectrum are a handful of companies with turnover exceeding 500 crore, that generate over 5,000 invoices every day; these larger companies are the most affected as of now.

E-invoicing could, however, be introduced to all businesses, in a phased manner.

Read More at: https://www.thehindubusinessline.com/economy/gst-e-invoicing-gradual-rollout-will-ease-the-pain/article32725747.ece

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