Another official said e-invoicing would help to generate invoice in a standard format, which can be read by any system and reporting of e-invoice to a central system becomes possible.
The proposed e-invoicing system under the goods and services tax (GST) would help small businesses secure instant loans without furnishing a plethora of documents as banks can rate them on the basis of these invoices, said officials working on the system. Further, they added that the compliance burden, which is often most arduous for MSMEs, will reduce as the GST system would pre-populate the returns on the basis of information received from e-invoices.
Under the system, the GST taxpayers would report their invoices to Invoice Registration Portal (IRP). This portal will generate a unique Invoice Reference Number (IRN) and digitally sign the e-invoice while generating QR code. The IRP will also send the signed e-invoice to the recipient of the document on the email provided in the e-invoice.
The government would roll out the e-invoicing system on a trial basis from January 1, 2020, for businesses with turnover of more than Rs 500 crore, and the same facility would be made available for taxpayers with a turnover of more than Rs 100 crore from the subsequent month. However, e-invoicing will be mandatory for both these taxpayer categories from April 1. For businesses having a turnover less than Rs 100 crore, it would remain voluntary from April 1, 2020.
“The tax department would help the taxpayers in preparing pre-populated returns through e-invoicing, which would also reduce reconciliation problems,” an official said.
Another official said e-invoicing would help to generate invoice in a standard format, which can be read by any system and reporting of e-invoice to a central system becomes possible. The adoption of these standards would not impact the users of invoice but all the accounting software would adopt the new e-invoice standard wherein they would realign their data access and retrieval in the standard format, he added.