The Centre may soon launch an electronic invoice system mechanism under Goods and Services Tax (GST) for companies, but it will only be applicable to big firms in the initial stages, sources told The Economic Times.
By way of this system, every transaction will automatically be registered on the GST Network. "It is being examined. We are seeing if bigger companies could be brought in to begin with," a government official told the paper.
Moneycontrol could not independently verify the story.
The government is optimistic about e-invoicing after the successful launch of the e-way bill system in 2018. This process will help the government capture transactions instantly on their network and help in curbing tax evasion. Companies will also be able to earn tax credits and compliance will also be easier.
The GST Council formed a committee which has a sub-group specifically to take care of issues related to e-invoicing. This group will look into the business processes and legal aspects of e-invoice generation. It will take care of invoice formats and any modifications required therein, cancellation and other such issues.
Industry experts suggest that e-invoicing will make things easier for businesses but it still needs time to be developed. "To the extent of e-invoices, data should be automatically populated in the GST returns and hence, compliance would be simplified. However, the industry needs to be given adequate time to prepare for this significant change," Pratik Jain at PwC.
He added that technology would be a major part of business in the near future and the government had already set the ball rolling with the e-way bill. "Through the e-way bill system, we already have a real-time authentication mechanism for manufacturers and traders, which essentially needs to be extended for the service sector as well," he added.
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