NEW DELHI: The government will introduce 'e-invoicing' system from January 1, 2020 in a phased manner for generating business-to-business (B2B) invoices on a voluntary basis and e-invoicing will become mandatory from April 1, 2020 for businesses with turnover above Rs 100 crore.
According to revenue department sources, businesses with a turnover of Rs 500 crore or more are supposed to start e-invoicing from January 1, 2020 on a voluntary and trial basis while businesses with a turnover of Rs 100 crore or more are required to do it from February 1, 2020.
“E-invoicing will become mandatory for both the categories starting April 1, 2020. However, it will remain voluntary and on trial basis even after April 1, 2020 for businesses having a turnover of less than Rs 100 crore,” said a source, revenue department. An e-invoice is generated on a portal and is verified by the government or a government agency.
Once the invoice is verified, a unique identity number is issued, which acts as the invoice number.
This invoice is then issued to buyers. An electronic invoice can do away with the need for both separate returns filed against the sale of goods and e-way bills issued for the transport of goods. With e-invoicing, the tax department can help businesses and taxpayers pre-populate the returns. This may also result in reducing reconciliation problems.
According to the revenue department, the aim behind the adoption of the e-invoice system is to make it convenient for taxpayers to file GST returns. To help small taxpayers adopt the e-invoice system in a smooth manner, GST Network, the entity that provides IT support to the GST system, has empanelled eight accounting and billing software.