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GST E-Invoice mandatory for businesses with Turnover of Rs 10 Crore from October 1; Know what it means

by Rishika Choudhury

Date & Time: Aug 03, 2022 9:00 AM

Read Time: 2 minute

GST e-Invoice Rules: E-invoicing will become mandatory for businesses with an aggregate turnover of Rs 10 crore or more under the Goods and Services Tax, or GST regime, on October 1. The government has reduced the limit from Rs 20 crore to Rs 10 crore in order to combat revenue leakage and ensure better tax compliance by businesses.

“In the said notification, in the first paragraph, with effect from the 1st day of October, 2022, for the words “twenty crore rupees”, the words “ten crore rupees” shall be substituted," said the announcement made by the Central Board of Indirect Taxes and Customs (CBIC) in a notification date August 1. The rules have been notified on the basis of the recommendations made by the GST Council, it said.

What Does this Move Mean to Businesses?

According to experts, the Central Board of Indirect Taxes and Customs (CBIC) announcement about the mandatory e-invoice for businesses will improve tax compliance and is a step toward making it mandatory for all GST taxpayers.

“The reduction of the e-invoicing to a threshold to Rs.10 crore will further expand the GST tax base and provide more data to the tax authorities enabling better compliance. The progressive reduction of the e-invoicing threshold indicates that, over a period of time, e-invoicing will become mandatory for all categories of GST taxpayers” said MS Mani, partner at Deloitte India.

The move will also ensure that smaller vendors who have to adhere to this mandate do not lose out on input tax credit.

“Lowering of threshold for e-invoicing is in line with government’s efforts to curb the menace of GST frauds and improve compliance. This would also mean that large corporates will need to ensure that their smaller vendors are adhering to this mandate so they don’t end up losing input credits." Rajat Bose, partner at Shardul Amarchand Mangaldas & Co told.

“The Deloitte GST Survey@5 showed that 90 per cent of the CXOs interviewed, stated GST implementation was a welcome step. It is only natural that the tax administration will now aim to cover the wider economy under GST. Hence this step of reducing the mandatory E invoicing requirement from Rs 20 crore to Rs 10 crore, will be welcomed by the industry," noted Bela Sheth Mao, partner at Deloitte India.

“The 45th GST council meeting did acknowledge the need for revenue augmentation and the preferred path being via tax policy measures rather than administrative interventions. We may see more such tax policy measures which not only augment revenue but also bring certainty to the GST law,” Mao added.

Also Read: GST Update notification: Rice, Wheat and others Won't Attract Tax When Sold Loose; check List

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