The Central Board of Indirect Taxes and Customs (CBIC) has notified compulsory e-invoicing of Goods and Services Tax (GST) from 1 October for businesses with at least ₹500 crore sales.
A notification by CBIC said that the decision to raise the threshold for e-invoicing to ₹500 crore from ₹100 crore specified in March when the 1 October roll out date was notified was taken on the recommendation of the federal indirect tax body, the Goods and Services Tax (GST) Council.
Mint had reported last week that an empowered panel of the Council recommended excluding businesses with sales upto ₹500 crore from compulsory e-invoicing, a step meant to improve tax compliance.
E-invoicing or submission of sales invoice in a portal designated by GSTN, the company that process tax returns, will automate a lot of data entry work, reduce errors and mismatches, capture sales related details in the system instantaneously and improve compliance. This is also expected to improve tax officials’ trust in the compliance of companies and reduce chances of audits or surveys.
It would also help in auto-populating certain forms. The GST authorities planned e-invoicing only for business to business transactions. The higher threshold will enable large corporations to go ahead with adopting this system, while giving more time to smaller ones.