GST Rule Change: Making a major change in the GST rules, the government has made it mandatory from August 1 to generate electronic or e-invoices for traders doing transactions of more than five crore rupees. Let’s try to understand what its effect will be.
New GST Rule: The government has made an important change in the rules of GST. From August 1, it will be mandatory for traders with a turnover of more than Rs 5 crore to generate electronic or e-invoices for B2B transactions. Currently under GST businesses with a turnover of Rs 10 crore and above are required to generate e-invoices for all B2B transactions.
The Finance Ministry has notified the reduction in the transaction limit for e-invoices on 10th May. This rule will be effective from August 1. The Finance Ministry has said that it will be mandatory for any taxpayer with a turnover of more than Rs 5 crore to issue e-invoices for B2B transactions.
What will be the effect of this change
Deloitte India Partner Leader Indirect Tax Mahesh Jaisingh said that with this announcement, the scope of MSMEs under e-invoicing will be expanded and they will be required to implement e-invoicing. He said that e-invoice for companies is a boon rather than a curse, as the suppliers who generate e-invoices contribute to the input tax credit on the same basis.
Government revenue will increase
AMRG & Associates Senior Partner Rajat Mohan said the phased implementation of e-invoicing has resulted in reduced disruptions, improved compliance and increased revenue. E-invoicing was initially implemented for large companies with a turnover of more than Rs 500 crore and within 3 years this limit has been reduced to Rs 5 crore now.
What will be the profit for traders
The inclusion of the MSME sector in the e-invoicing regime will help reduce costs, rationalize errors, ensure faster invoice processing and limit commercial disputes in the long run . This will also benefit the business ecosystem.
Under the Goods and Services Tax (GST) law, e-invoicing was made mandatory for business-to-business (B2B) transactions for companies with a turnover of more than Rs 500 crore from October 1, 2020, which later With effect from January 1, 2021, up to a turnover of more than Rs.100 crores.
From April 1, 2021, it was made mandatory for companies with turnover of more than Rs 50 crore to generate B2B e-invoices. This limit was reduced to Rs 20 crore from April 1, 2022. The limit was further reduced to Rs 10 crore with effect from October 1, 2022.
