Businesses with annual turnover of over Rs.5 crore will have to move to e-invoicing under goods and services tax (GST) from January 1. The GST Network has asked its technology providers to make the portal ready to handle the increased capacity by December, a government official privy to the development, told ET.
The official said the target is to bring all businesses with turnover above Rs.1 crore under this framework by next fiscal year, which will further plug revenue leakages and improve compliance.
The GST Council had decided to implement electronic invoice in a phased manner. The aim is to bring all the small businesses under the formal economy. “As per the GST Council recommendation, e-invoicing will become mandatory for businesses over ₹5 crore turnover from January 1,” the official said.
E-invoicing uses a standardised format that a machine can read.
It would help in syncing sales data of a small business vendor and large corporate clients, which is used to claim tax credit. This, the official said, would help in swift detection of false ITC claims, broaden GST base and improve compliance.
From October 1, businesses having aggregate annual turnover of Rs 10 crore and above have moved to e-invoicing for business-to-business (B2B) transactions.
E-invoicing for B2B transactions was first made compulsory for companies with turnover of ₹500 crore from October 1, 2020.
This threshold was then lowered to businesses with turnover of Rs.100 crore from January 1, 2021 onwards and again was revised to companies having a turnover of Rs.50 crore from April 1, 2021. From April 2022, it was extended to businesses with turnover above Rs.20 crore.
Source: The Economic Times