With effect from October 1, the centre would require enterprises with a combined annual turnover of more than Rs 10 crore to use electronic invoicing. This action will further plug revenue leaks and ensure improved tax compliance from businesses.
Currently, companies having a yearly revenue of more than Rs 20 crore are required to use electronic invoices. The centre said on Monday that it has changed the guideline regarding the Council’s recommendations.
The GST Council had suggested implementing an electronic invoice in GST gradually during its 37th meeting on September 20, 2019. E-invoicing was initially declared required for companies with an annual turnover of 500 crore rupees, but this was later reduced to 100 crore, then to 20 crore, and eventually to 10 crore.
According to officials, e-envoicing would be required for companies with a Rs 5 crore in annual revenue by the next year. By making this change, tax authorities will also be able to more accurately analyse patterns in the use and abuse of input tax credits across industries and close revenue gaps.
Tax authorities have found fake ITC worth over Rs 50,000 crore just in the last two years. Given the deadlines, affected companies will need to begin preparing and stepping up their IT systems to ensure compliance with the standards for e-invoicing.