e-invoice is to be rolled out optional from 1st Jan 2020 and mandatory from 1st April 2020. It is already one month, and we need to work on the same if the same is not started as we are racing against time. The government has given access to the sandbox for the taxpayer to verify and test the same before rolling out to the production / actual use. E-invoice is being rolled as the Government has observed that there is a lot of tax evasion happening the system and tracking of the same is missing in the current system. Implementation of e-invoicing will provide tracking of the same, and at the same time, the Government will have a complete audit trail of the transactions, and evasion will be minimized. The benefits of e-invoicing are
Unlike the rollout of GST, where the taxpayers have to make a lot many changes to their business process as well as for their IT Systems, implementation of e-invoice is simple, less time consuming, and huge budgets are not required. The sandbox for the e-invoice is being made available for the taxpayers who are having a turnover above Rs 500 crores in the previous financial year and for above Rs 100 Crores it will be made available from 1st of Feb 2020.
The tax invoice is still required to be generated from the existing ERP/Accounting/Billing system, but the data has to be transmitted to the IRP (Invoice Registration Portal ) for the validation of the data and once it is validated, an IRN (Invoice Reference Number will be generated and sent back to the taxpayer.
The following are to be considered while implementing the e-invoice
1. Requirements – Functional
It is proposed to have e-invoice in the 35th GST Council Meeting, and the same is decided in the 37th GST Council meeting. The basis on this it is notified wide Notification No. 70/2019 – Central Tax dated 13th Dec 2019 that e-invoice will be mandatory for all the taxpayers who are having aggregate turnover above Rs 100 crores in a financial year.
registered person, whose aggregate turnover in a financial year exceeds one hundred crore rupees, as a class of registered person who shall prepare invoice in terms of sub-rule (4) of rule 48 of the said rules in respect of supply of goods or services or both to a registered person.
From the said notification, it is clear that e-invoice is required to be issued by all the taxpayers in case of B2B (Business to Business) transactions for either supply of goods or services or both.
Normally in all the GST provisions, it is worded that during the previous financial year but in this notification, it is used as “In a financial year.” This raises the question, what will happen if the turnover has crossed during the financial year. In such a case, does the taxpayer need to issue the same from the beginning of the year or from the date on which it has crossed or from the invoice which has triggered the threshold limit? The taxpayers have to take a judicious call on this and take it forward accordingly.
There is also a requirement to issue a QR code with a cross-reference to the payment to be made in case of B2C transactions for the taxpayers who are having a turnover of Rs 500 crores. The same is notified wide Notification No. 72/2019 – Central Tax dated 13th Dec 2019. This means for all the transactions related to B2C the invoice has to be issued with a QR code and this is an additional requirement.
hereby notifies that an invoice issued by a registered person, whose aggregate turnover in a financial year exceeds five hundred crore rupees, to an unregistered person (hereinafter referred to as B2C invoice), shall have Quick Response (QR)code:
Provided that where such registered person makes a Dynamic Quick Response (QR) code available to the recipient through a digital display, such B2C invoice issued by such registered person containing cross-reference of the payment using a Dynamic Quick Response (QR) code, shall be deemed to be having Quick Response (QR) code.
It means the existing retail billing solutions have to be modified for the same. This will impact all the franchise stores, retail supermarket chains etc., The existing Point of Sales devices may not be supporting the printing of the same or if also supported the changes in the billing software has to make. The impact on the same has to be considered as the QR code has to be generated from the ERP/Accounting/Billing solution directly or the invoice information has to be transmitted to the e-invoice portal and generated?