Government may drop the idea of ​​e-invoicing for retail traders

A person familiar with the development said the government cannot extend e-invoicing to retailers as it is of the view that further expansion of the compliance requirement requires careful evaluation.

Currently, e-invoicing, or real-time reporting, of sales by businesses on the Goods and Services Tax (GST) portal is mandatory for business-to-business (B2B) transactions of companies with minimum turnover. 50 crores. It will be extended to salespeople of 20 crore or more from April 1, bringing a major chunk of economic activity under the regulatory ambit of the GST authorities.

The original plan was to make e-invoicing mandatory for all B2B transactions and eventually retail sales to improve tax compliance. However, policy makers now believe that The sales range of 20 crores is wide.

“There is a need to carefully evaluate its benefits to further reduce the turnover limit for e-invoicing. E-invoicing of business-to-consumer transactions can increase the reporting volume, but without real benefit,” said the person above, requesting anonymity.

While GST is collected on the basis of the extent of value addition at each level, at the retail level, the transaction volume will be huge but the amount of tax on individual invoices will be less. The person said tracking retail transactions may not yield much results and may not be useful for tax enforcement. An email query to the Finance Ministry on Tuesday remained unanswered till press time.

Experts say that the choice of policy is indeed the right one. “The The 200 million turnover limit for B2B transactions appears to be sufficient for tax enforcement to meaningfully monitor economic activity. Not bringing retail sales under e-invoicing is a good policy option, as the final retail consumer is not eligible for any input tax credit in the indirect tax system.”

Mint reported on February 28 that The limit of 20 crores will add around 180,000 GST Identification Numbers (GSTINs) under the real time e-invoicing system. A business can have more than one GSTIN depending on the number of states.