15/05/2023
GST e-invoicing threshold to be lowered to Rs 5 crore:
The finance ministry has decided to lower the threshold for mandatory e-invoicing under the goods and services tax (GST) to Rs 5 crore from the Rs 10 crore at present, effective August 1, a move that will help improve the tax collections further.
According to a notification by the Central Board of Indirect Taxes and Customs, firms with an annual turnover of Rs 5 crore in any of the previous year under GST law, will have to generate e-invoices for business transactions. Under the e-invoice system, GST registered persons have to upload all B2B and export invoices to the Invoice Registration Portal (IRP). The IRP generates and returns a unique Invoice Reference Number, digitally signed e-invoice and QR code to the user. This is then transferred to the GST portal.
Over the years, the government has been reducing the threshold and bringing more and more taxpayers in the fold of e-invoicing in order to bring in transparency and gathering data for comparison with the returns filed by taxpayers.
Initially from October 1, 2020, e-invoicing was mandatory for businesses with an annual turnover of Rs 500 crore. This was then lowered to Rs 100 crore from January 1, 2021 and further brought down to Rs 50 crore from April 1, 2021. Effective April 1, 2022 the threshold was further reduced to Rs 20 crore and then to Rs 10 crore from October 1 last year.
Chronological and progressive reduction in the threshold limit has been one of the contributory factors undoubtedly increases the GST Collections, However impacted stakeholders should ensure compliance from 1st of August 2023.
