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GST e-invoice required for businesses with turnover of Rs 10 crore from October 1; what does it mean

GST e-Invoice Rules: From October 1, e-invoicing will become mandatory for businesses with an aggregate turnover of Rs 10 crore or more under the Goods and Services Tax or GST regime. The government has lowered the limit from Rs 20 crore at present to tackle revenue leakages and ensure better tax compliance from businesses.

“In the said notification, in the first paragraph, with effect from October 1, 2022, the words “twenty crores” shall be substituted for the words “twenty crores of rupees,” the central board’s notification said. A notification of Indirect Taxes and Duties (CBIC) dated August 1, Monday. The rules have been notified based on the recommendations of the GST Council, it said.

What does this move mean for businesses?

According to experts, the announcement by the Central Board of Indirect Taxes and Customs (CBIC) about mandatory e-invoicing for businesses will ensure better tax compliance and is a step towards making it mandatory for all GST taxpayers.

“Reducing the e-invoicing threshold to Rs 10 crore will further expand the GST tax base and provide more data to tax authorities to enable better compliance. The progressive reduction in e-invoicing threshold indicates that, over time, e-invoicing will become mandatory for all categories of GST taxpayers” said MS Mani, partner, Deloitte India.

This move will ensure that small sellers who have to comply with this order do not lose input tax credit.

“Reducing the threshold for e-invoicing is in line with the government’s efforts to curb the menace of GST fraud and improve compliance. This means that large corporates will have to ensure that their small vendors comply with this order so that they do not lose input credit.” Rajat Bose, partner at Shardul Amarchand Mangaldas & Co told News18.com.

“Deloitte GST survey @5 showed that 90 per cent of CXOs interviewed, say GST implementation is a welcome step. It is natural that the tax administration will now aim to cover the wider economy under GST. The industry will therefore welcome this move to reduce the mandatory E invoice requirement from Rs 20 crore to Rs 10 crore,” noted Bela Seth Mao, Partner, Deloitte India.

“The 45th GST Council meeting recognized the need to raise revenue and the preferred route is through tax policy measures rather than administrative intervention. We can see more such tax policy measures that not only increase revenue but also bring certainty to the GST law,” Mao added.

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