Businesses falling under the ambit of the goods and services tax (GST) with a turnover of INR100 million (USD1.2 million) are now required to generate e-invoices for their transactions starting 1 October 2022. The government lowered the e-invoice threshold from INR200 million to INR100 million to plug gaps in sales reporting, compliance and automation errors. With the new rule in place, the government seeks to digitise a huge volume of transactions.
The ruling was notified by the Central Board of Indirect Taxes and Customs (CBIC) in conjunction with the recommendations of the GST Council.
The government is reportedly considering lowering the turnover amount further to INR50 million to stem revenue loss and overcome compliance gaps.
E-invoicing will impact B2B transactions, supplies to special economic zones, exports and deemed exports. However, it will not affect insurers, non-banking financial companies, banking companies and financial institutions.