By decreasing the required turnover level under the Goods and Services Tax (GST) regime from Rs 20 crore to Rs 10 crore, the government has expanded the scope of electronic invoicing for enterprises. October 1 marks the start of the new threshold.
The change aims to digitise a larger number of transactions, increase sales reporting transparency, lessen errors and mismatches, automate data input labour, and boost compliance.
According to sources, the government will also extend it to companies with a Rs 5 crore annual revenue in an effort to stop tax leakage and simplify compliance.
The Central Board of Indirect Taxes and Customs (CBIC) notified the rule late Monday amending the current threshold in line with the recommendations of the GST Council.
‘Business Standard’ reported on July 4 about the government’s plans to make GST e-invoicing mandatory for companies with a turnover of Rs 10 crore and then Rs 5 crore in the current financial year.
E-invoicing (electronic billing) started in October 2020 and was made mandatory for entities with a turnover of Rs 500 crore and above. This threshold was brought down to Rs 100 crore and later to Rs 50 crore in 2021 for business-to-business (B2B) transactions.
Taxpayers must generate invoices on their internal system or billing software and then report them to the invoice registration portal (IRP)–a requirement to get input tax credit (ITC).