GST system depends upon online matching of supplier GST liabilities with relevant input GST credit claims by receivers of goods or services.
In my opinion, for having a seamless and easy system of matching credits, GSTN should provide for online generation of TAX INVOICES by suppliers, which will altogether eliminate need for data entry of purchases by receivers of the supplies received and hence no need for reconciliation/matching of output GST database with input credit claims database.
It should be optional for sellers to use Invoicing Software available on GSTN website, so that there will not be any resistance from trade and industry which would be there if such use is made mandatory. However if a seller chooses to use the GSTN software utility then it should not be open for him to use his own invoicing software for GST purposes. Any seller opting for use of GSTN Invoicing utility will be required to generate all his billing through that utility only. GSTN can offer facility of export of invoice database to Excel/Tally etc. so that same data is available to supplier for use in his accounting software, without duplication of data entry.
For a receiver of goods or services, any sales invoice generated by his supplier quoting GSTIN of such receiver, should be immediately available as GST credit under its applicable components of CGST/SGST or IGST. He will not be required to key in such receipts into GSTN.
Biggest benefit of such a taxpayer friendly system will be for the purchaser because he will be relieved not only of burden of data entry of supplier bills but of burden of following up with suppliers for unmatched credits. It is felt that customers will force their suppliers to use GSTN invoicing utility so that in due course of time most of the GST transactions will be documented through GSTN Invoicing system.
Receiver can simply add a check in his bill passing routine to ensure generation of tax invoice by supplier or more easily can make a rule to pass only Tax Invoices generated on GSTN for payments to be made to suppliers.
Seamless flow of credit shall then be available under GSTN and reduction from gross input credit made available by GSTN to a receiver for the reasons of retention and credit denial rules of GST law should be made a responsibility of receiver.
Maharashtra Government has announced bringing of such Invoicing Utility as a part of Automation of VAT Returns implemented from Apr 16, but it looks like that initiative has not progressed due to technical constraints.
GSTN however has good amount of resources to address all technical challenges for implementation of Invoicing Utility in terms of software and hardware part.
It is suggested therefore that before any GST implementation plan is chalked out this feature must be incorporated in that plan
CA Mukund Abhyankar