GST was implemented with several unique provisions which intended to reduce the complexities of pre-GST era. One of such provision stated in rule 46 of CGST rules, 2017 which conferences about unique series of invoice under GST.

As per law,a valid invoice is required to claim ITC absence of which results is inadmissibility of credit. As GST evolved, misuse of input tax credit is a serious concern for tax authorities as it seems to have created a hole in the system that the enforcement agencies are struggling to fix. As quoted by The Financial Express in a publication in May 2018, GST-Intelligence Unit has unearthed a racket which used fake bills to claim input tax credit worth Rs 450 crore.

To curb the evasion through issue of fake invoices to make the returns filing process simpler for businesses, the revenue secretary is closely monitoring the progress of implementation of electronic or e-invoice project for which an officers’ committee has already been set up.All invoices for business-to-business sales by entities beyond a specified turnover threshold will be generated on a centralised government portal by September, 2019, an official stated.

“Once rolled out, the e-invoice project will allow businesses to simultaneously generate e-way bill, if needed,” the official added. E-way bill is required for movement of goods exceeding value of Rs 50,000.

Depending on the success of the project in the B2B segment, the revenue department would be looking at extending it to business-to-consumer (B2C) sales, especially in sectors where the probability of tax evasion is high.

GST officers are working on a system where businesses above a certain turnover threshold will have to generate ‘e-invoice’ on government or GST portal for every sale, thereby effectively reducing the room for tax evasion.

The official further said that once full e-tax invoice starts getting generated, it would significantly ease burden of return filing by businesses as invoice wise data would be auto-populated in the return forms.

Preparing invoices online will provide ease of doing business as –

• Government can quickly change and implement mandatory data inputs for an invoice to be generated
• Flow of invoice information to the e-way bill portal will become automatic
• Data will be available with the government for posterity for long time analysis
• Stability of systems and govt portal will be critical for implementation and compliance.

As a new thing takes time to settle in. Such a change will perhaps require some settling in for taxpayers. For ensuring a smooth transition, guidance of a GST consultant could be sought.

This content is meant for information only and should not be considered as an advice or opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.

Posted by:

CA Tarun Kapoor

AKGVG & Associates