From April 1, the GST payers with turnover more than Rs 20 crore will have to switch to uploading e-invoice on a common portal to prevent heavy penalties and save their goods from being seized. Because of the new rule, the businessmen want the coverage limit raised to Rs 50 crore.

Asked how this rule will change the way of doing business, tax expert Naveen Kumar Thamman said: “If the GST payers’ aggregate turnover in any of the preceding financial years from 2017-18 exceeds GST Rs 20-cr in individual case, their manual invoices won’t be treated as invoices under the GST law. These taxpayers will be unable to ship their goods from April 1 without e-invoicing. If they clear the goods without e-invoicing after this date, the GST office can seize the shipment in transit and impose a penalty equal to 200% of the tax that is payable.”

Thaman said: “The customers of these taxpayers will be unable to claim the ITC (input tax credit) on manual invoices, which will lead to non-payment of GST to the seller. In this case, the sellers have to deposit their GST liability with the department but they won’t be reimbursed for the GST amount as they will not be entitled to the ITC.” Many corporate companies have started taking an undertaking from their sellers that they will comply with the new rule from April 1, if they fall in the turnover limit. In case of non-compliance and if the seller denies the ITC to the buyer, the seller will be liable to pay back the GST with interest and penalty.

Tax experts advised the registered GST payers to comply with the new provision to avoid litigation and disputes with the buyers. Criticising this central government move, Fasteners Manufacturers Association of India president Narinder Bhamra said: “It is shocking that despite knowing the condition of the micro, small, and medium enterprises (MSMEs), the central government is making the business environment tougher for them. We support the government in its campaign against bogus billing and tax evasion but we are against putting the burden of so many complaints on genuine businessmen.”

Asked about his issues with e-invoicing and what the businessmen would like to change, Bhamra said: “This e-invoicing is complicated procedure and it should apply only to the businesses with a turnover in excess of Rs 50 crore instead of the present limit of GST Rs 20-cr that the authorities have fixed.”

Resources : TOI, ET

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