From April 1 next year, electronic invoicing (e-invoicing) will be mandatory for businesses with a turnover of Rs 100 crore, the government said on Thursday. This will help curb goods and services tax (GST) evasion and make compliance easier. The e-invoicing system will be rolled out in a phased manner from January 1 on a voluntary and trial basis, beginning with rms with a turnover of Rs 500 crore, while businesses with a turnover of Rs 100 crore or more will be required to do it from February 1. “The basic aim behind the adoption of the e-invoice system is to facilitate convenience to the taxpayers by further simplifying the GST return system. Though e-invoicing the tax department would help businesses and taxpayers by pre-populating the returns, resulting in reducing reconciliation problems,” a government release said.
There are about 7,500 GST identication numbers (GSTIN) for businesses with a turnover of Rs 500 crore and above. From April 1, it will be voluntary for businesses with a turnover of less than Rs 100 crore. The e-invoicing system will allow small and medium enterprises to take instant loans from banks. “With the e-invoicing system, banks may not require a plethora of physical documents and their validation. Rather, they could do MSMEs ratings for the loan on the basis of their e-invoicing,” the government release said. The move comes at a time when the GST collections have been dismal and government is looking for ways to plug evasion. GST collection plummeted to a 19-month low in September at Rs 91,916 crore, and remained well under the Rs 1 trillion mark for the third straight month in October at Rs 95,380 crore, 5.3 per cent lower than the corresponding month last year.