Challenges In E- Invoicing System Under GST

Challenges In E-Invoicing System Under GST

A new concept of e-invoicing has been introduced under GST. It has come into practice on a voluntary basis from 1 January 2020 for taxpayers with turnover over Rs 500 crore. It will be open to those taxpayers having more than Rs 100 crore turnover from 1 February 2020 onwards.

Finally, all taxpayers having an aggregate turnover of over Rs 100 crore must compulsorily begin generating e-invoices from 1 April 2020.

Key Points & Challenges-

Mandatory/Optional Fields:

There are multiple fields to be filled in for generation of E-invoices which are either mandatory or optional. No wonder, we can easily differentiate between them, but the key point to be noted is a minute difference between codes (referred to as cardinality in Schema) given for fields.

The registration of an e-invoice will only be possible once it has all the mandatory fields uploaded into the Invoice registration Portal (IRP). A mandatory field not having any value can be reported with NIL.

Reporting of B2G invoices:

The type of documents to be reported to the GST system includes B2B invoices, B2G invoices, Export invoices, Reverse charge invoices, credit notes, and debit notes. So, there arises a need for additional classification of invoices for reporting of Business to Government (B2G) invoices. Here, the government department or agency means registered TDS Authorities.

Availability of E-Invoices:

The most important point to be noted is that the e-invoice will be available for reference of the taxpayer only for 24 hours once the e-invoice system has validated and registered an invoice.

Cancellation and amendment of e-invoice:

An e-invoice cannot be partially canceled. Even for a small change, it needs to be entirely canceled. Cancellation of e-invoice is allowed on the IRP within 24 hours. After 24 hours, the cancellation cannot be made on the IRP; it needs to be manually done. A taxpayer will then have to revise the invoice number in addition to fixing the errors and raise an e-invoice on IRP.

Amendment of E-invoice is not possible in the E-invoice portal. However, the same can be amended in the GST portal. Since the e-invoices generated will get auto-populated in New returns ANX-1 & ANX-2, taxpayers have to carefully keep track of amended e-invoices separately and update the same in GST-portal to avoid erroneous reporting or mismatches while filing their monthly returns.

Concept of “Sub-users”:

To overcome the challenge of creating e-invoices using single login by businesses having multiple branches, option creating multiple sub-users has been introduced. A sub-user can use the same login credentials created originally and perform the actions as per the access that is given to them. However, there is a limit on the number of sub-users that can be created. A user can create a maximum of 10 sub-users for every principal/additional place of business.

Generation of Reports:

The reports can be generated only on a daily basis.  No cumulative or consolidated reports can be generated. However, the system allows users to change the date and generate a report of that particular date.

Workflow changes to process other types of documents:

As mentioned earlier, e-invoicing applies only to B2B invoices. Thus, a separate workflow must be in place for delivery challans, bill of supply, job work and other similar transactions. Creating a different workflow for various types of transactions requires a lot of time and effort.