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The Goods and Services Tax Network (GSTN) has sought stakeholders’ comments on the new e-invoice format, which will be effective January 2020, and will be mandatory for all dealers.
The GST Council in its 35th meeting on June 21 had decided to introduce electronic invoicing system in a phased manner for B2B (Business-to-Business) transactions. E-invoicing is a rapidly expanding technology which would help taxpayers in backward integration and automation of tax relevant processes. It would also help tax authorities in combating the menace of tax evasion and taking input tax credit (ITC) using fake invoices.
According to government data, 1,620 cases of fake invoice(s) involving fraudulent ITC worth ₹11,251 crore came into light during 2018-19. During the current fiscal, data up to June shows that Central GST authorities booked 535 cases of fake invoice(s) involving fraudulent ITC worth ₹2,565 crore. Considering this rising number, the prime motive of introduction of e-invoicing appears to be the curbing of fraudulent invoices and to ensure that the overall mechanism of GST is not deflated by such measures.
Further, the need for e-invoicing was also felt to ensure complete inter-operability of e-invoices across the entire GST eco-system so that e-invoices generated by an software can be read by any other software, thereby eliminating the need of fresh data entry. The system today is a pain point and also responsible for lot of transcription error related non-reconciliation.
The measure is also in line with the global practices as many countries across the world have adopted standards for e-invoice.
Now experts feel that there are certain key issues that need to be resolved by GSTN before finalising the format.
Harpreet Singh, Partner, at KPMG, welcomed the release of the draft e-invoice format for consultation. The aim should now be to provide as much inputs as possible, so that the final invoice format suffices for all sectors.
“Whether invoice number, date, invoice type code would be auto-populated, what details need to be entered under ‘transaction mode’, how would one enters e-waybill details on the invoice as generally e-waybill is generated post issuance of invoice etc. are some of the open questions emanating from the draft format,” said Singh.
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