The Government recently had stated that e-invoicing or electronic invoicing in s going to be mandatory for any business that has a turnover of above Rs 10 crore. The limit was Rs 500 crore according to the previous regulations.
The small businesses previously who were not required to bother regarding e-invoicing under the Goods and Services Tax (GST) are now rushing towards upgrading their information technology (IT) systems in order to abide by the new regulations of the government.
It is speculated by the industry trackers that in most cases the businesses that are now needed to follow the regulations might find it difficult. This is mostly because of the investment required in the IT infrastructure and the limited time frame to do so.
Aligned towards the current communications by several Government officials, e-invoicing was now been notified for INR 100 crore and above businesses as well. With only nearly 50 more days, these mid-sized businesses would require to soon gear up their procedures/ IT systems in order to enable compliance with this present invoicing regulation.
Tax experts had said that the Government’s decision to lessen the threshold for e-invoice compliance from INR 500 Crores to INR 100 Crores is consistent with the original plan of the GST Implementation Committee.
However, the approach of introducing the requirement in a phased way was a good move, allowing the system towards stabilizing and giving the MSME’s an added period of 3 months to execute the changes to their IT systems.
Electronic invoicing is basically a form of electronic billing. According to the GST, framework invoices are an essential part of the system.
The larger businesses that have successfully applied and complied with the present requirement would now have to shift focus on their procurement procedures. Robust mechanisms and checks shall be required to be put in place to make certain that all vendors who are needed to fulfill based on the revised threshold from 1st January 2020 provide them with valid e-invoices.
The e-invoicing regulations also mean that the tax department shall be able towards tracking the issue of fake invoices as well as duplicitous credits taken by businesses more sternly.
The tax department had started blocking input tax credit of many businesses doubting that they were deceitfully availing it either through creating a false trail of shell corporations or through false invoices. Input tax credits are part of the tax paid by a business that could be used to set out the future tax liability
The Tax consultant had stated that there were many instances where persons and businesses are utilizing the GST system in order to manipulate and benefit themselves. In a leading newspaper report, a matter was stated that a chartered accountant (CA) student got arrested by the tax officials for committing fraud of Rs 50.24 crore by means of input tax credit manipulation.
Author:
Leave a Comment
Previous Comments