Lowering the threshold rate for e-invoicing

 

GST INVOICING MUST FOR BIZ WITH TURNOVER OF Rs.5cr OR MORE

 

                            For business to business (B2B) transactions under the goods and service tax, now it is been followed as e-invoice is compulsory for companies with a turnover of Rs.10cr or above.

                        The Ministry rate of Finance then notified that a new mandate has been proposed to lower the threshold rate for e-invoicing. Now the new act which will came into existence from August 1 onward says that Businesses with a turnover of Rs 5 crore and more are obligated to generate e-invoicing forB2B.

 

This movement results in many benefits,

·      it digitizes higher volumes of transactions

·      the transparency in sales reporting will increase

·      the number of errors reduces

·      lower rate of mismatch

·      the data entry work gets automated

·      improved compliance

 

                                    Earlier, on 2020, the companies with a turnover of 500cr, it was mandatory for them threshold for in-voicing and then on 2021 it became Rs 50cr and the threshold was brought down to Rs 20cr, beginning April 1, 2022. And then it further lowered to Rs 10cr in October 1,2022, which now became Rs 5 crores.

 

                                        To the system of IRP which is “a requirement to avail of input tax credit” to which the Tax payers must register to. They should generate invoices on the internal systems or billing software and then report them to the IRP.

                                                Saurabh Agarwal, partner of EY, says that from August 2023 onward i.e. after the implementation of the new rule, the industry need to review its vendor masters and ensure any vendor supplying good or services are breaching this contract of threshold turnover of Rs 5cr.

                                            The Finance Ministry of Indian said that, The Central Board of Indirect Taxes and Customs (CBIC) has rolled out a module for automated scrutiny of GST returns. This will help the officers to work on scrutiny of GST returns of Centre Administered Taxpayers selected on the basis of data analytics and risks identified by the system. The discrepancies on account of risks associated with a return are displayed to the tax officers. They are provided with a workflow of interacting with the taxpayers through the GSTN Common Portal for communication of discrepancies noticed.