Govt may drop the idea of e-invoicing for retail businesses

The authorities may not lengthen e-invoicing to retailers as it’s of the view {that a} additional growth of compliance requirement wants cautious analysis, stated an individual accustomed to the growth.

Currently, e-invoicing, or real-time reporting of gross sales by businesses on the items and providers tax (GST) portal, is necessary for business-to-business (B2B) transactions of firms with a turnover of not less than 50 crore. It will probably be prolonged to these with gross sales of 20 crore or extra from 1 April, bringing a giant chunk of financial exercise beneath the regulatory ambit of GST authorities.

The authentic plan was to make e-invoicing necessary for all B2B transactions and finally for retail gross sales, in an effort to enhance tax compliance. However, policymakers are actually of the view that the 20 crore gross sales threshold is complete.

“Further decreasing of the turnover threshold for e-invoicing wants cautious evaluation of its advantages. E-invoicing of business-to-consumer transactions may add to the volumes of reporting, however with out precise advantages,” the particular person cited above stated requesting anonymity.

While GST is collected at each stage based mostly on the extent of worth addition, at the retail degree, the transaction quantity will probably be big however the tax quantity can be small on particular person invoices. Tracking retail transactions may not yield a lot outcomes and may not be helpful for tax enforcement, the particular person stated. An e-mail question to the finance ministry on Tuesday remained unanswered until press time.

Experts stated the coverage selection makes excellent sense. “The 20 crore turnover threshold for B2B transactions seems enough for significant oversight of financial exercise for tax enforcement. Not bringing retail gross sales beneath e-invoicing is an effective coverage selection provided that the ultimate retail client isn’t eligible for any enter tax credit score in the oblique tax system,” stated Rajat Mohan, senior companion, AMRG and Associates, an accounting agency.

Mint reported on 28 February that the 20 crore threshold will add near 180,000 GST identification numbers (GSTINs) beneath the real-time e-invoicing system. One enterprise can have multiple GSTIN relying on the quantity of states it operates in.

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