All GST taxpayers whose aggregate annual turnover exceeds Rs 5 crore in any financial year will have to mandatorily generate e-invoices for business-to-business (B2B) supply of goods and or services or for exports, starting August 1, Tuesday. Earlier, companies with an annual revenue of Rs 10 crore or above were only required to generate e-invoice.
Experts say that change in e-invoice rule and inclusion of companies with lesser turnover can help boosting the micro, small and medium enterprises (MSME) entities.
According to Mahesh Jaising, Partner leader, Deloitte Indias, the scope of MSMEs under e-invoicing will be expanded with this announcement.
“For companies e-invoicing is a boon rather than a bane as suppliers who are e-invoicing compliant result in proper flow of input tax credit and reduce the churn around credit issues,” Jaising was quoted as saying in a Press Trust of India (PTI) report.
Understanding GST e-invoicing
The Goods and Services Tax or GST e-invoice has been made mandatory to prevent tax evasion and allow an invoicing standard in the country. It is a system in which business-to-business (B2B) invoices and a few other documents are authenticated electronically by Goods and Services Tax Network (GSTN) for further use on the common GST portal, according to Cleartax.
The main purpose of GST invoicing is to electronically validate all B2B transactions and pre-populate the relevant information into the GST forms of taxpayers.
A look at reducing thresholds for e-invoice turnover limits
Who should raise GST e-invoice
The taxpayers must comply with e-invoicing in FY 2022-23 and onwards if their e invoice limit or turnover exceeds the specified limit in any financial year from 2017-18 to 2021-22. Also, the aggregate turnover will include the turnover of all GSTINs under a single PAN across India.