GST’s grand invoice vision hits reconciliation wall: Taxpayers grapple with compliance overload
The new invoice management system under the GST regime, designed to eliminate unbilled transactions across the country, has been met with widespread criticism from taxpayers and industry experts alike. While the government aims to ease compliance burdens, several of the recently introduced measures, intended to simplify the process, have instead proven difficult to implement in practice, causing frustration among those required to adhere to them.
According to several representations that have been sent by the industry to the government, sources told CNBC-TV18 that “the system has not been well accepted by the taxpayers and thus, the industry is sending representations seeking some relaxations or delay in making it mandatory for all.”
Particularly for small and mid-sized businesses, which in turn are part of the transaction chain for the large companies as well. “These taxpayers across sectors are now struggling to keep pace with a fast-evolving framework of real-time invoice matching, shrinking reconciliation windows, and dual scrutiny from both the GST and income-tax authorities,” sources added, who are aware of such representations.
“At the heart of the issue is GST’s data-intensive design, which assumes that every supply—both sales and purchases—will be consistently reflected across a web of digital filings and databases: from GSTR-1 and GSTR-3B to Form GSTR-9, the e-invoice portal, and income tax systems like Form 26AS,” sources added.
But when put into practice, this has created what tax practitioners call "continuous matching loops," and for businesses operating on basic accounting software, keeping all ends synchronised has become a significant operational bottleneck," added sources citing representations.
