The E-invoicing of sales transactions made by the vendors who have a turnover higher than Rs.500 Crores becomes compulsory as notified by CBIC and also providing relief to the Small Scale Companies by increasing the threshold limit from Rs.100 Crore to Rs.500 Crore.
The Government has provided relief to the businesses in the Special Economic Zones (SEZ) by relieving them to obey this notification dated 29th July. From 1st October 2020, this notification will become applicable for business to business (B2B) transactions.
The Dynamic Quick Response (QR) Codes is also mandated by CBIC to be present on E-invoices that starts from 1st October, but according to 29th July notification, the QR addition was not made compulsory. A QR Code comprises of invoice details like GST identification numbers (GSTIN) of suppliers, receiver and invoice numbers, that could get verified without any internet access. The new notification also carries information about schemas or formats for the execution of E-Invoicing.
The Banking and Insurance Companies, Non-Banking Financial Company (NBFC), financial institutions, Goods Transport Agencies (GTA) and passenger transportation services are going to have an exemption from E-invoicing and QR Codes.
Government’s main intention behind the implementation of E-invoicing of sales transactions is to bring up more transparency in the system of sales reporting and to reduce the chances of mismatch and errors by automating the whole data entry process. It also wants to capture the sales details instantly which can improve the compliance process and the tax evasion practices followed in many foreign markets could get stopped that in turn will reduce the chance of audits and surveys.
Last week Yogendra Garg principal commissioner GST policy at CBIC said in a webinar, “We will not implement e-invoicing for the businesses which have Rs.100 Crore sales but will implement it for businesses which have sales more than Rs.500 Crores and as it stabilizes, we will do it for (businesses with) Rs.100 Crore sales and more”.
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