The e-invoicing system under the goods and services tax (GST) regime got off to a smooth start, overcoming initial apprehensions, with invoice generation per day rising threefold within a month of its roll-out.
About 2.4 million invoice reference numbers (IRNS), or e-invoices, are being generated daily now, compared with 800,000 on October 1, when it was made mandatory for entities with turnover of 500 crore or more.
Encouraged by this, the government is likely to begin e-invoicing testing for all entities with a turnover of 50 crore or more from November 15, as it plans to make it mandatory for them in a phased manner.
About 18,111 GST identification numbers (GST INS) used e-invoicing as of Thursday, compared with 8,000 on the first day. While 48,000 GST INS are above the 500-crore turnover threshold, sectors like transportation, insurance, and banking have been exempted from this. Units in special economic zones, too, have been exempted from complying with the rule.
“We have got a very good response as far as e-invoicing is concerned. Largely, all eligible entities have come on board as some sectors, including banking and transportation, are exempt. There have been no major complaints or glitches in the first month. This is also because these are large companies with sound technological systems in place,” said a government official.
Under e-invoicing, companies have to generate IRNS from a government portal and these have to be shown to authorities while moving goods. E-invoicing has been introduced to bring in more transparency in reporting sales, minimising errors and mismatches, automating data entry work, apart from improving compliance. It will help prevent tax evasion once it is made mandatory for small and medium firms.
While e-invoicing was made mandatory for companies with annual turnover of over 500 crore in any one of the preceding three years, the government said no penalty would be imposed on companies that take IRN within a month of transporting goods. The government plans to roll it out for entities with turnover of 100 crore and above from January 1, 2021, and to all firms from the April 1, 2021, for business-to-business (B2B) transactions.
“We will open testing for companies with 50 crore and above turnover from November 15 to give them enough time to prepare,” said a government official. In the medium term, this mechanism will replace the existing e-way bill system and eventually the government hopes to dispense with the current system of filing GST returns for micro, small and medium enterprises (MSMEs).
Source: Business Standard
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