In pursuance of its decision to form committee to explore introduction of electronic invoices (e-invoices) through Goods and Services Tax (GST) portal, the GST Council has set up two sub-groups to look into the policy and technical aspects, such as turnover threshold and mode of generation, for e-invoice generation by businesses.
One sub-group will examine the business process, policy and legal aspects for generation of e-invoice and the other sub-group will recommend technical aspects for its roll-out. The sub-group on policy issues would also suggest some “immediate steps” to check fake invoices in case of business-to-business (B2B) supplies with a high threshold turnover and also recommend a carve-out for sectors like banking and telecom.
The e-invoice if implemented will help streamline the indirect tax system and ensure better compliance by keeping a check on tax evasion. A 13-member committee having representatives from GST Network (GSTN), central and state governments was formed in April to examine the electronic tax invoice system of South Korea, Latin America and other countries and suggest a model for India.
The sub-group on policy issues for e-invoice would recommend legal aspects including invoice format, threshold turnover for invoice generation from the portal and immediate steps for ‘B2B’ supplies with a high threshold turnover. It would also suggest optional treatment for some sectors such as banking, telecom, tentative timeline for execution and phase-wise implementation.
The sub-group on technical issues would suggest mode of generation, like app-based or mobile or SMS or offline and online, data security and system integration. Depending on the success of the project in the B2B segment, the revenue department would look at extending it to business-to-consumer (B2C) sales, especially in sectors where the probability of tax evasion is high.
The sub-group on policy issues has five members including officials from Revenue Department, CBIC officials, GST Council, whole the sub-group on technical issues includes three members from GSTN, NIC and UIDAI.