From this year, the Central Board of Indirect Taxes & Customs (CBIC) has made Electronic invoicing mandatory for all tax-paying businesses with an aggregate turnover exceeding one billion rupees. The same rule was passed on October 1, 2020 for businesses with an annual turnover of 5 billion rupees. An announcement of this kind opens up multiple opportunities and challenges as the taxpayers need to be updated about the tax and technology that they are going to use in a precise & simpler manner.
The integration of the new rule also means that the e-invoicing system will be able to incorporate a larger group of taxpayers into the system. It will result in small businesses becoming a part of the digital economy by imbibing the accounting software required for e-invoicing. This will also help businesses to manage their accounts efficiently as invoices are processed digitally and speedily and will lead to making the administrative process much simpler.
Sharing his views on the development, Mr. Rajesh Gupta, Co-founder & Director of BUSY Infotech Pvt. Ltd says “This move by the CBIC will give a boost to the ecosystem of digital accounting software within the country as the number of micro, small and medium enterprises will grow. E-invoicing is a fast & cost-effective way to file your GST returns and it also helps in curbing manual errors and glitches. The digital route also helps in providing a sense of security and transparency for the businesses and will help them in joining the mainstream of the booming digital economy of India”
Taxpayers can generate E-invoices through modes such as a direct API (Application Programming Interface) integrated with the Invoice Registration Portal (IRP) and offline utility for generating bulk e-invoices. Through this initiative, the government is also expecting e-invoicing to have other major advantages such as improving the payment cycle for industry and giving boost to invoice-based lending to MSMEs.
Clearly the CBIC’s announcement has opened out channels for the development of e-invoicing software, which is fast, precise and dependable. On the other hand, it has opened the gate of digital connectivity for MSME’s and other small scale businesses.