The Centre is reportedly considering making GST e-invoicing compulsory for entities with a turnover of Rs 5 crore from this financial year. At present, under the Goods and Services Tax (GST) system, e-invoicing is mandatory for companies with an annual turnover of Rs 20 crore or more.
This could be done in the next phase to check revenue leakage and ease compliance. In this phase, the government will first make e-invoicing mandatory for companies with an annual turnover of Rs 10 crore or more, and later it will be implemented for entities with a turnover of Rs 5 crore or more.
The idea behind the move is to maintain digital records of many transactions, greater transparency in sales information, minimising mismatches and errors, automating data entry work, and improve compliance. The GST Network (GSTN), which facilitates e-invoicing, will be ready for the next phase in three-four months and adequate time will be given to the taxpayers to comply with the new norms.
In October 2020, the e-invoicing system was introduced and was made mandatory for companies with an annual turnover of Rs 500 crore and above. Later, this limit was slashed to Rs 100 crore and then to Rs 50 crore for mutual business transactions in 2021. At present, e-invoicing is mandatory for entities with an annual turnover of Rs 20 crore.
The GSTN has reportedly initiated the process of empanelling at least six registration portals to provide e-invoicing facility to help higher volumes of transactions. Currently, there is only one challan registration portal for all businesses.
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