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GST (tax) e-invoicing is mandatory for businesses with annual turnover above Rs 5 crore

E-invoice limit reduced to Rs 5 crore annual turnover

The Goods and Services Tax Council has made it mandatory for businesses with an annual turnover of more than Rs 5 crore to move to e-invoicing from next year.

Such businesses will have to generate electronic invoices for business-to-business (B2B) transactions with effect from January 1, 2023. Economic Times reported Quoting a government official familiar with the matter.

Earlier, businesses with a turnover of Rs 20 crore and above were required to generate e-invoices for all B2B transactions.

The Central Board of Indirect Taxes and Customs (CBIC) had reduced the e-invoicing limit to Rs 10 crore or more. Now it has been further reduced to Rs 5 crore.

The GST Council had earlier decided to implement e-invoicing in a phased manner.

The recent move to reduce the annual turnover limit for e-invoicing to Rs 5 crore is ultimately aimed at bringing all businesses with a turnover of more than Rs 1 crore under the framework.

This will help bring small businesses under the formal economy, prevent revenue leakage and ensure compliance, a government official told ET.

The government launched the e-challan system on October 1, 2020. Initially, companies with a turnover of more than Rs 500 crore were required to generate e-invoices as per the Goods and Services Tax (GST) guidelines.

It was then extended to include businesses with an annual turnover of more than Rs 100 crore with effect from January 1, 2021, and again from April last year to include companies with a turnover of more than Rs 50 crore.

In e-invoicing systemInvoice Registration Portal (IRP) An identification number is issued for each generated challan.

Invoices are authenticated electronically by the GSTN, and the information is transferred in real time to both the e-way bill portal and the GST portal. It eliminates the need to enter data manually while filing GSTR-1 return and reduces mismatch errors.

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