GST: Submission on admissibility of scanned copies of tax invoices to claim of Input Tax Credit

Under GST, a tax invoice is an important document and a registered person cannot avail Input Tax Credit (ITC) unless he is in possession of a tax invoice. However, due to lockdown, business activities have been disrupted all over the country. With large number of vendors and huge volumes of input tax invoices, companies have been processing supplier invoices which are generally made available in scanned form. Moreover, with employees largely working from home, the practice of obtaining, tracking and retaining / filing physical copies of invoices is a challenging task. Even when businesses will resume normal functioning, it would be a humongous task amidst efforts in obtaining hard copies of vendors invoices and placing them on records.

Further, Rule 46 of Central Goods and Services Tax Rules, 2017 (“CGST Rules”), require invoices and bills of supply to be digitally signed by authorized representative of the supplier. However, small suppliers find it difficult to provide digitally signed tax invoices, and instead are resorting to providing scanned copy of the tax invoices signed by the supplier.

While we understand that above issues will get resolved for large companies exceeding the prescribed turnover threshold once e-invoicing is implemented, small companies may still continue to face these issues.

In light of the above, we have made a representation to GST Policy Wing requesting the government to waive off the requirement of obtaining physical copies of vendor invoices specifically for period beginning from March 2020 till March 2021. For this period, possession of scanned copy or electronic copy of invoice should be an acceptable practice for allowing claim of ITC. Further, Rule 46 of CGST Rules should be amended to allow affixing of digital signature on invoices on an optional basis for period from March 2020 to March 2021.

We will keep you posted on further developments in this regard.

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