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Businesses With Over Rs 5 Crore Turnover To Generate E-Invoice From Aug 1Businesses with turnover of over Rs 5 crore will have to generate electronic or e-invoice for B2B transactions with effect from August 1.
Currently, businesses with turnover of Rs 10 crore and above are required to generate e-invoice for all B2B transactions.
The finance ministry through a notification dated May 10 has notified a reduction in threshold for e-invoicing. Effective August 1, any taxpayer with turnover exceeding Rs 5 crore should raise e-invoices for B2B supplies.
Deloitte India Partner Leader Indirect Tax Mahesh Jaising said with this announcement, scope of MSMEs under e-invoicing will be expanded and they will need to implement e-invoicing.
"For companies e-invoicing is a boon rather than a bane as suppliers who are e-invoicing compliant result in proper flow of input tax credit and reduce the churn around credit issues," Mr Jaising added.
AMRG & Associates Senior Partner Rajat Mohan said phased implementation of e-invoicing has resulted in reduced disruptions, improved compliance and increased revenue.
E-invoicing was initially implemented for large companies with turnover of more than Rs 500 crore, and within 3 years the threshold has now been lowered to Rs 5 crore.
"Inclusion of MSME sector in the e-invoicing regime would benefit the overall business ecosystem by reducing costs, rationalising errors, ensuring faster invoice processing, and also limiting commercial disputes in the long term," Mohan added.
Under Goods and Services Tax (GST) law, e-invoicing for business-to-business (B2B) transactions was made mandatory for companies with turnover of over Rs 500 crore from October 1, 2020, which was then extended to those with turnover of over Rs 100 crore effective January 1, 2021.
From April 1, 2021, companies with turnover of over Rs 50 crore were generating B2B e-invoices, and the threshold was brought down to Rs 20 crore beginning April 1, 2022. From October 1, 2022, the threshold was further lowered to Rs 10 crore.
EY Tax Partner Saurabh Agarwal said the industry needs to review their vendor masters and ensure that any vendor supplying goods or services and crossing the threshold turnover of Rs 5 crore is necessarily issuing a e-invoice from August 2023 to avoid any dispute with respect to availment of input tax credit (ITC).
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
Currently, businesses with turnover of Rs 10 crore and above are required to generate e-invoice for all B2B transactions.
The finance ministry through a notification dated May 10 has notified a reduction in threshold for e-invoicing. Effective August 1, any taxpayer with turnover exceeding Rs 5 crore should raise e-invoices for B2B supplies.
Deloitte India Partner Leader Indirect Tax Mahesh Jaising said with this announcement, scope of MSMEs under e-invoicing will be expanded and they will need to implement e-invoicing.
"For companies e-invoicing is a boon rather than a bane as suppliers who are e-invoicing compliant result in proper flow of input tax credit and reduce the churn around credit issues," Mr Jaising added.
AMRG & Associates Senior Partner Rajat Mohan said phased implementation of e-invoicing has resulted in reduced disruptions, improved compliance and increased revenue.
E-invoicing was initially implemented for large companies with turnover of more than Rs 500 crore, and within 3 years the threshold has now been lowered to Rs 5 crore.
"Inclusion of MSME sector in the e-invoicing regime would benefit the overall business ecosystem by reducing costs, rationalising errors, ensuring faster invoice processing, and also limiting commercial disputes in the long term," Mohan added.
Under Goods and Services Tax (GST) law, e-invoicing for business-to-business (B2B) transactions was made mandatory for companies with turnover of over Rs 500 crore from October 1, 2020, which was then extended to those with turnover of over Rs 100 crore effective January 1, 2021.
From April 1, 2021, companies with turnover of over Rs 50 crore were generating B2B e-invoices, and the threshold was brought down to Rs 20 crore beginning April 1, 2022. From October 1, 2022, the threshold was further lowered to Rs 10 crore.
EY Tax Partner Saurabh Agarwal said the industry needs to review their vendor masters and ensure that any vendor supplying goods or services and crossing the threshold turnover of Rs 5 crore is necessarily issuing a e-invoice from August 2023 to avoid any dispute with respect to availment of input tax credit (ITC).
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)