In a drive to avoid leakage of revenue, the Government is likely to mandate Businesses with annual turnover of over ₹5 crore to move to e-invoicing under goods and services tax (GST) from January 1.
As per reports, the GST Network has asked its technology providers to make the portal ready to handle the increased capacity by December, a government official privy to the development.
The move aims at bringing all businesses with turnover above ₹1 crore under this framework by next fiscal year, which will further plug revenue leakages and improve compliance.
With an aim to bring all the small businesses under the formal economy, the GST Council recommended to mandate e-invoicing for businesses over ₹5 crore turnover from January 1The GST Council had decided to implement electronic invoices in a phased manner.
E-invoicing uses a standardised format that a machine can read.
It would help in syncing sales data of a small business vendor and large corporate clients, which is used to claim tax credit. This, the official said, would help in swift detection of false ITC claims, broaden GST base and improve compliance.
From October 1, businesses having aggregate annual turnover of Rs 10 crore and above have moved to e-invoicing for business-to-business (B2B) transactions.
E-invoicing for B2B transactions was first made compulsory for companies with turnover of ₹500 crore from October 1, 2020.
This threshold was then lowered to businesses with turnover of ₹100 crore from January 1, 2021 onwards and again was revised to companies having a turnover of ₹50 crore from April 1, 2021. From April 2022, it was extended to businesses with turnover above ₹20 crore.
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