Introducing massive change for business on aggregate across India, the GST Council is all set to talk about the expansion of e-invoicing norms to business-to-consumer (B2C) sales in the GST Council meeting on Monday. For now, e-invoicing is optional but prescribed for B2B means where contraction and supply are made between different organizations having a turnover of ₹5 crore and above.
The new change, when implemented, is expected to promote better transparency, reduce tax avoidance, and simplify compliance in consumer deals. As suggested in the sources, a pilot project might be launched on the basis of voluntary acceptance of e-invoicing by a number of sectors along with participating states. This initiative shall be important in helping realize the prospects of and also the effects of implementing this e-invoicing in B2C transactions.
A government official said, "The pilot would enable assessment of the value and issues related to expanding the policy of e-invoicing to consumers, which is expected to increase tax compliance, decrease paper consumption, and lessen business transaction costs."
Eventually, the formal proposal should be submitted for the approval of the GST Council. Given the proposed changes to the tax system, it will be up to the GST Network to include this new feature. It will also be pertinent to ensure that an appropriate commercial model is developed as well. This is likely to ease the process of checking bills by consumers, while the ministry believes that tourists will easily get refunds on GST.
The B2B e-invoicing mandate has been introduced gradually since October of 2020, and the change of parameters to 100 percent mandatory use of e-invoicing has been made gradually. The present benchmark of ₹5 crore from August 1, 2023 only serves as a check and measure for the continuous endeavor to bring in more and more measures for compliance at different capacities in the organizations.
The new e-invoicing requirements for B2C transactions will be voluntary at first, starting next fiscal year; however, any changes in the threshold or further specifics will be reviewed after the outcomes of the pilot program. This has been attributed by the officials as meaning that the problems are still observed in organizations with turnover in the range of ₹5-10 crore with continued enforcement crusade.
The expected expansion of e-invoicing to B2C operations also holds the promise of continuing the overhauling of India's tax regime and improving the GST system's functioning.
CAclubindia
