Electronic invoicing is a process of validating all B2B & export invoices electronically through a designated portal. With e-invoicing, an invoice for supply has to be reported in real-time as opposed to the present regime where the details are uploaded next month at the time of filing of returns.
Given the current outbreak of the global pandemic, USISPF conducted a survey among its members to assess the preparedness of companies to comply with the mandatory October 1 2020 deadline. Approximately 100 large corporates and MNC’s were surveyed, and 62% of the respondents confirmed their companies are not prepared for the implementation date of 1st October 2020. 95% of the survey participants requested that the mandatory date of implementation be deferred to January 1 2021 or later.
The three most common reasons for requesting a deferment is the short time available to incorporate the changes needed as per the revised API’s on 27 August 2020, lack of clarity on specific issues still persisting, and the upcoming festive season.
Commenting on the larger industry, Dr Mukesh Aghi, CEO and President of USISPF said “ We are grateful for the transparent and consultative approach of the Finance Ministry on GST e-invoicing. This is a business process change and not just an additional tax compliance. Since updated Scheme was released early August 2020 and the revised APIs were released only recently, our member taxpayers are finding it difficult to test and implement the system before the due date i.e. 1 October 2020. We therefore have requested the Government to allow some flexibility on the implementation date - a voluntary application from Oct 1st would be welcome relief for the industry that is already suffering due to the impact of the pandemic. In the end, a smooth transition to an e-invoicing regime is in the benefit of all parties, including the Government”
Mahesh Jaising, National Indirect Tax Leader, Deloitte India and Chairman of the Indirect Tax Task Force of USISPF adds that “The new e-invoicing system is a move in the right direction as it will help resolve invoice mis-match and credit disputes too. Currently, companies invest considerable amounts of time and resources in vendor follow-ups and data reconciliation. With less than 13 days to go, companies are working towards completing their testing processes to ensure that they meet the deadline of 1 October 2020. The authorities could consider October 1, 2020 as a “voluntary” start date and this will encourage companies who are ready to go online. A mandatory start date in a few months can be considered, to allow additional time as the pandemic has caused severe disruptions to businesses and reduced support from staff. This is coupled with the fact that the reform start date is in the backdrop of the upcoming festive season, when sales are expected to increase significantly. Considering implementation in a phased approach may also be a good idea and provide both industry and the Government time to assess system stability issues as well as operational issues”.