NEW DELHI :
A system of generating e-invoices in a standard format which makes it easier for the tax authorities access details of business-to-business transactions and pre-fill the Goods and Services Tax (GST) return forms of companies will become mandatory for all companies with ₹100 crore or more sales, from April 2020.
A government official said on Thursday that businesses having a turnover of Rs.500 crore or more would take up e-invoicing from 1 January 2020 on voluntary basis while businesses with turnover of Rs.100 crore or more will start the same voluntarily from 1 February. For both classes of companies, e-invoicing will become mandatory from 1 April. For smaller companies, it will remain voluntary although it will aid them in building their credit history, said the official who spoke on condition of anonymity.
“E-invoicing system will be a boon to MSMEs as it will open the facility of instant bank loans for MSMEs. With the new system of E-invoicing, banks may not require a plethora of physical documents and their validation processes. Rather, they can do MSMEs’ ratings for the loan on the basis of their e-invoicing," said the person. The tax authorities are now trying to leverage the full potential of the technology driven new indirect tax system to improve accountability and check tax evasion.