E-Invoicing to come under GST

Last Updated at: Jan 15, 2021
E-Invoicing to come under GST
The government is considering deferring the implementation of e-invoicing under goods and services tax (GST) by three months to July 1, two officials aware of the development said, adding that the Goods and Services Tax Council may consider such a proposal at its meeting recently.


Ever since the advent of GST it has become a debatable topic among the various businessowners, media and political parties. However, it must be accepted that the changes brought about by it are largely positive. The changes made to it after implementation have ensured that it continues to function seamlessly without any significant glitches.

The goods and services taxes introduced in 2017 replacing a wide variety of indirect taxes have come to be a breakthrough in the taxing regime. The boon-bane debate, however, continues to still surround it. Since the introduction of the new reformed tax regime, it has undergone major as well as minor changes in order to adjust to the Indian economy. The regime is set to take up another major change head-on this year,  which has the potential effect on the entire taxing regime and functioning of business enterprises across the country.

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There has been news that the reformed tax regime of GST is set to include within its ambit electronic invoicing as well. Once the system is in place, it is very much probable that the business can directly draw invoices on the online GST Network. The network will offer a database for the authorities to directly access. This proposal is under consideration and the GST Council has set up a committee to look into the possibility and implications of such an initiative. The committee comprises of both central as well as state tax officials as well as the GST Network Chief Executive. The database has been made possible by the help of registering the electronic invoices under the GSTN number, thus not requiring separate registration for the same.

Make Your Business GST Ready

The need for the reform has grown out of the reported evasions under the reformed tax regime. In order to curb invasions, there have been some other initiatives by the council as well, as the introduction of electronic waybills (e-way bills).

Under the Indian taxation system, all the goods and services are categorized into 6 slabs. It is significant for all business people to know under which category their goods or services fall. The GST rate finder service is used to find the GST rates of all the goods and services. This service is also referred to as the HSN finder. By using the HSN finder, we can also find the HSN codes for goods and services.


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Taxation experts are of the opinion that the including of electronic invoicing will be a step ahead to curb potential tax evasions.  Pratik Jain, the national leader of indirect taxes PwC in an interview remarked that:

 “E-invoicing as a concept looks like a good mechanism to check tax evasion and also ease the compliance burden on businesses,” said Pratik Jain, national leader, indirect taxes, PwC.

The partner of AMRG and associates Rajat Mohan is of the opinion that in order incentivise businesses to adopt the new system, the tax department could limit the frequency of mandatory departmental audits in case procurements are made on basis of e-invoices. However, the success of the new entrant in the regime is entirely depended upon the effective implementation which can be done only when the technical and infrastructural aspects of the plan have been adequately addressed.

The tax officials, on explaining the new system have revealed that businesses beyond a turnover threshold would be provided with a software which will be linked to GST or a government portal for generating e-invoice.

The threshold can also be fixed on the basis of the value of the invoice. The current system in place requires an e-way bill for moving goods exceeding the threshold of 50,000 rupees. However, the proposal is to entirely replace any such requirement pertaining to the generation of the e-way bill as the e-invoices will be centrally generated through a government portal. The concerned officials are subjecting the proposal to worldwide research, comparing to the best international practices of other countries, following a similar system. In a PTI interview, one of the officials said:

“We will have to study global models followed by countries like Latin America, South Korea and Europe. We will also look at ways to incentivise businesses to adopt the method of e-invoice generation.”

The initiation of having such a mechanism in place is a clear indication of the government’s intention to grab evasions by the very root of it and eliminate all loopholes which are being taken advantage of. Though the act of evasion has also spread its ambit and is existing in different forms, this can be seen a positive step in the right direction which might be able to bring down the evasion substantially.

E-invoicing has become a norm with GST. The goods and service tax has made it easy for all businesses to carry on their major operations without focusing too much on unnecessary legal hurdles. It has been a positive change for the government because tax evasion has gone out of the equation with effective tracking measures for all.

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Visit to the following link to know about GST Invoice Format.

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