Central Board of Indirect Taxes & Customs (CBIC) extended the e-invoicing initiative for businesses whose aggregate turnover exceeds Rs 10 crore from 01st October 2022. CBIC released notification no 17/2022–Central Tax in this regard based on the Council’s recommendation.
The department stated that this move would further plug in the revenue leakage and helps in better tax compliance from businesses. So far, e-invoicing is mandatory for businesses with an annual turnover of over Rs 20 crore.
The GST Council, in its 37th meeting on 20th September 2019, recommended introducing e-invoicing under GST in a phased manner. Initially, e-invoicing was mandatory for 500 crore+ turnover businesses. Later the e-invoicing threshold limit was reduced to Rs 100 crore and then to Rs 20 crore.
Sources say the department might extend the e-invoicing to 5 crore+ turnover businesses by the next financial year.
With this move, the tax authorities can analyze the trends better. Also, they can track the Input Tax Credit (ITC) usage across sectors and restrict revenue leakage. According to the department, they have detected Fake ITC worth more than Rs 50,000 crore in the last two years.
The move to reduce the turnover limit of e-invoicing applicability aims at resolving mismatch errors and checking tax evasion. The businesses shall start preparing their IT systems to enable compliance with the e-invoicing amid the approaching timelines.
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DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.