In a major relief to businesses with up to Rs 500 crore turnover, the GST implementation committee has excluded them from compulsory e-invoicing of GST.
In a major relief to businesses with up to Rs 500 crore turnover, the GST implementation committee has excluded them from compulsory e-invoicing of GST. Earlier the relaxation was for firms with up to Rs 100 crore turnover. However, the threshold will be raised five times higher with effect from 1 October 2020. The e-invoicing process was brought in to record sales details, reduce errors, automate data entry, and improve compliance and trust between tax officials and companies. The new feature of e-invoicing was also aimed to help auto-populate certain forms, which may reduce the efforts of businesses. However, the latest announcement on raising the threshold of e-invoicing compliance is expected to give smaller companies more time to adopt the new system.
Yogendra Garg, principal commissioner, GST policy, said that the focus is on easing compliance burden and compliance cost and many such announcements can be made in the near future. The electronic capturing of invoices leads to the feeding of data directly into a business accounts payable system without room for error, helping businesses to be more productive and less prone to errors.
“Over the last few years, India has witnessed a drastic jump in registered small and medium businesses (SMB) from 50 lakhs to 1 Crore, and the number is growing every day. Automating SMBs, as such, is not a small task, but e-Invoicing can be a pool of solutions for them,” said Rajesh Gupta, Co-founder and Director, BUSY Accounting Software. E-Invoicing can modify that by not only helping businesses to cut costs but also ensuring companies are paid faster and open up new financing options, Rajesh Gupta added.
While the GST Intelligence has spotted many incidents of tax evasion in the recent past, the government is stepping up efforts to omit the possibilities of such crimes. The new GST e-invoice scheme under which businesses with a turnover of Rs 500 crore and above will generate all invoices on a centralised government portal starting October 1 is a welcoming decision by all the businesses because it will stop the process of tax manipulation, Rajesh Gupta further said.