Hello friends, greetings for the day 35th GST Council Meeting was held on 21 June 2019 at New Delhi, after a long gap of more than three months. This was the first council meeting chaired by the re-elected government and India’s second woman Union Finance Minister, Mrs. Nirmala Sitharaman. This GST Council meeting was held when Union Budget is just less than a month away and there has been lot of expectations from the new Government formed with such a humongous mandate. There were lots of expectation from the GST Council meeting as well because it was held after the time period of 3 months there were numerous decision taken by the council but out of them the important in principal approved decision was the implementation of “E-Invoicing”.
The new system for raising all the tax invoices on the GST portal has received in-principle approval in the 35th Council meeting for implementation from 1 January 2020. This will apply only B2B invoicing. With the help of “E-Invoicing” no separate “E-Way bill” would be required to be generated. In simple terms E-Invoicing will also have “E-Way Bills”. Returns to be framed from these E-invoices. This new system requires a proper phased implementations otherwise there would be lots of confusion among business entities. Earlier, the government had fixed Rs 50 crore as the limit for the applicability of e-invoicing but there is no clarity from the 35th Council Meeting about the applicability however with the time to come committees formed for the recommendation, implementation of E-invoicing will provide the complete layout.
E-invoicing will allow all the transactions on real time basis and it will be auto populated in the returns so in the end there would be very few entries or fields which needs to be provided by the entity hence it will be beneficial for both government for curbing tax evasion as well as for the business entities.This system will also help to negate any gaps between GSTR-1 and GSTR-3B and ensures that the input tax credit does not get misused. The most important effect of E-invoicing would be simplified returns for those subject to e-invoicing on GSTN since the sales details are already uploaded at the time of invoicing. “E-Way bills” has been successfully implemented which in turn has given confidence to the authorities for the introduction of “E-Invoicing” which will help to curb tax evasion to its entirety.Large companies in the country may soon have to rely on a common goods and services tax portal to issue invoices to their customers but there can be some difficulties as well because a business entity has to generate multiple sets of invoice because first one would be on the GST Portal and a separate invoice for the books of accounts.
A committee was already being appointed by the GST Council that has examined issues connected to e-invoicing, including optional treatment of sectors such as banking and telecom as also tentative timeline for execution. This committee has made certain recommendations about business process, policy and legal aspects for generation of e-invoice,format for invoice, modification or cancellation of invoice, turnover threshold for invoice generation from the portal, immediate steps for B-B Supplies with a high threshold turnover and the format for exceptional circumstances.