New Delhi: In a bid to control tax evasion, the government is thinking of introducing electronic generation of invoices for business transactions. Once the system is rolled out, it will become mandatory for businesses to generate electronic invoice, or e-invoice, through a government portal or the GST portal, for every sale made.
The e-invoice system will eventually replace the requirement of generation of e-way bill for movement of goods, as invoices would be generated through a centralised government portal. Currently, e-way bill is required for moving goods of transaction value exceeding Rs 50,000.
A finance ministry source said the GST officers are working on a system, in which businesses above a certain turnover threshold will have to generate the e-invoice. “The requirement of e-invoice generation could be either on the basis of turnover of the registered person or value of invoice. The thinking is, ideally, it should be based on a turnover threshold so as to avoid splitting of sales,” the source said.
An officers’ committee, comprising central and state tax officials and the GST Network Chief Executive, has been set up to look into the feasibility of introducing an e-invoice system to streamline generation of invoices and easing the compliance burden. The committee will finalise an interim report next month.
The modus operandi will be that businesses above a specified threshold will get a unique number for every electronic invoice or e-invoice generated. “This number can be matched with the invoices reported in the sales return and taxes paid,” the source said.
The e-invoice generation method will be similar to the one being followed for e-way bill on the ‘ewaybill.nic.in’ portal or payment of GST on the GSTN portal.
“We will have to study global models followed by countries like Latin America, South Korea and Europe. We will also look at ways to incentivise businesses to adopt the method of e-invoice generation,” the source said.
There are over 1.21 crore registered businesses under the GST, of which 20 lakh are under the composition scheme....