E-invoicing Mandatory for Taxable person having Turnover of Rs. 5cr from January, 2023

E-invoicing Mandatory for Taxable person having Turnover of Rs. 5cr from January, 2023

E-invoicing Mandatory for Taxable person having Turnover of Rs. 5cr from January, 2023

To further ensure better compliance and plug leakages, the GST e-invoicing to be expected to be mandatory for firms having turnover of INR 5 crores from January 1st, 2023, as per the Chairman of Central Board of Indirect Taxes Vivek Johri.

Johri further told Financial Express that expanding the coverage to over Rs. 5cr will give the government fine data for policy making. By bringing down the e-invoicing requirement from the current Rs. 20cr to Rs. 5cr, the government can further make analysis of:

a.    Which sectors are contributing more towards the GST; &
b.    Which sectors have higher potential but are not contributing enough.

Fake Input Tax Credit (ITC) of over INR 50,000 crore has been detected in the past years. The authorities will be able to make better analysis of the trends and the availment of the ITC, and therefore to remove the fake ITC claims.

During the introduction of the e-invoicing (for B2B Transactions, from Oct 1st, 2020) the threshold was kept over INR 500 crores.

Further in the second phase, from January 1st, 2021 the threshold was brought down to INR 100 crores & in the third phase (April 1st, 2021) the mandatory threshold came down to INR 50 crores.

The current applicability of the e-invoicing is INR 20 crores (From April 1st, 2022).

“Once one can construct all the returns based on e-invoices, the need for invoice matching itself goes away and yet have a fool proof system of return filing. So, that is a very big advantage. E-invoice will (eventually) become universal,” Johri said.

Source: Financial Express.

 

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