19 December 2019

E-invoicing mandatory from 1 April 2020 for businesses with turnover above INR 1 billion

The government has notified the implementation of e-invoicing under the GST law to specified class of persons with effect form 1 April 2020.

Persons with turnover above INR 1 billion to undertake e-invoicing
Registered persons with aggregate turnover in a financial year exceeding INR 1 billion must undertake e-invoicing with respect to supply of goods or services or both to a registered person (i.e. B2B supplies) from 1 April 2020.

Quick Response code on B2C invoices
?Registered persons with aggregate turnover in a financial year exceeding INR 5 billion are required to have a Quick Response (QR) code on their invoices issued to an unregistered person i.e. (B2C invoices) with effect from 1 April 2020.
 
However, a registered person can make available a dynamic QR code through digital display by cross-referencing the payment made by the recipient. In such a case, the corresponding B2C invoice containing such cross-referencing shall be deemed to be having a QR code.
SKP's Comments

The primary intention behind the introduction of e-invoicing is to end GST credit frauds by eliminating fake invoicing. However, this can truly succeed only once all taxpayers are covered under the e-invoicing mechanism. Businesses will also benefit from e-invoicing as the invoice data will automatically reflect in FORM GST ANX-1 under the new return filing system, and in Part A of the e-way bill. This will reduce duplication of compliance work.

Businesses should undertake the following activities to ensure that they are ready for e-invoicing on the go-live date i.e. 1 April 2020:
  • Change in business processes to ensure timely and effective compliance with the e-invoicing procedure;
  • Changes in ERP system to be implemented in the required technology for e-invoicing;
  • Business evaluation to understand the impact - e.g. Identifying vendors who would issue e-invoice with effect from 1 April 2020 to ensure corresponding input tax credit is not affected;
  • Employee training and customer/vendor communications to keep them abreast of the impact on the entire business cycle due to these changes.?
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