The government can soon give big relief to crores of small businessmen and retail shopkeepers of the country. Sources close to the matter say that the government may refrain from implementing the plan to make GST e-invoicing mandatory for all. At present, e-invoicing is mandatory for annual turnover of more than Rs 50 crore.
An official related to the matter said that the government was preparing to introduce e-invoicing for all transactions in business to business (B2B) business. However, for the time being it is being considered to be abandoned. The official said experts and stakeholder groups have suggested to the government that it would be better to assess the pros and cons of e-invoicing before making it universal.
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At present, e-invoice generation is mandatory for businesses with annual turnover of up to 50 crores registered on the GST portal. There is a preparation to increase this limit to 20 crores from April 1 this year. In such a situation, due to coming under its purview, more and more merchants will have to generate e-invoice.
It is not beneficial to do necessary for everyone
The government is considering many things to implement it for all small businessmen by reducing the minimum limit of e-invoice from 20 crores. She is considering all the suggestions received for this. Experts have suggested to the Finance Ministry that the number of small businessmen is very high, but their share in terms of tax liability is very less. They say that in such a situation, if the government imposes unnecessary tax regulation on the shopkeepers, then it will hamper the business and affect the economy as well. Also, it will create a hindrance in the way of ease of doing business.
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Consumers need to keep in mind
Tax experts say that while fixing the minimum limit for e-invoicing by the government to 20 crores is logical, it is not right to bring all small transactions below it. Tax consultant K.C. Goduka says that the end consumer cannot claim input tax credit on any of his purchases or sales. In such a situation, it should not even be necessary for him to follow the e-invoice rule.
What is e-invoice
It is a compounding of a typical commercial invoice (bill) for any kind of supply of goods or services. It contains the data of every process from beginning to end. This can be achieved by enabling the receiving business to download signed invoices directly from the GST system. Its features include reporting of invoice details and generation of reference numbers on the notified portal.