The GST e-invoicing will likely be mandatory for businesses with a turnover of over Rs 5 crore from August 1, 2023, down from the current threshold of Rs 10 crore to further plug leakages, ensure better compliance and policy formulation, Central Board of Indirect Taxes chairman Vivek Johri told in Financial Express.
“I think expanding the coverage to over Rs 5 crore will give us very good data for policy making. We can analyze the data at the level of four-digit HS (Harmonised System) and get some sense of which are the sectors which are the sectors which are contributing more to the GST, which have higher potential but are not contributing enough,” Central Board of Indirect Taxes chairman Vivek Johri told in Financial Express.
Turnover criteria for e-invoice
|Applicable to taxpayers exceeding turnover of more than||Applicable date||Notification No.|
Rs 5 crore
|01/08/2023||10/2023 – Central Tax|
Rs 10 crore
|01/10/2022||17/2022 – Central Tax|
Rs 20 crore
|01/04/2022||1/2022 – Central Tax|
Rs 50 crore
|01/04/2021||5/2021 – Central Tax|
Rs 100 crore
|01/01/2021||88/2020 – Central Tax|
Rs 500 crore
|01/10/2020||61/2020 – Central Tax and 70/2020 – Central Tax|
The tax authorities will also be able to analyze better trends and availing of input tax credits across sectors. They’ll be able to weed out fake ITC claims that have emerged as a significant issue. Over 50,000 crore in fake ITC was detected in the past one-and-half years alone.
The GSTN has reportedly initiated the process of impaneling several registration portals to provide e-invoicing facilities to assist with the higher volumes of transactions. For all businesses currently, there is only one challan registration portal.
“Once one can construct all the returns based on e-invoices, the need for invoice matching goes away, and yet have a foolproof return filing system. So, that is a huge advantage. E-invoice will (eventually) become universal,” Vivek Johri said.
“Increasing portals will provide adequate IT infrastructure and an ecosystem to ensure uninterrupted invoice registration services to businesses. It also provides taxpayers an option to choose between the services of different portals. In addition, it helps the GST accounting system to balance the load in case anyone IRP portal faces any challenge due to a long queue,” the business daily quoted another official as saying.
The lowering of the threshold for e-invoicing would also significantly expand the number of GST registrants as the number of entities in the bracket of Rs 5 crore to Rs 20 crore would be very high, said MS Mani, Partner, Deloitte India. “This would help expand the base of taxpayers, which is one of the stated objectives of GST,” Mani added.
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