E-invoice rule in GST tightened
The government has tightened the GST compliance norm by making e-invoicing mandatory for any firm whose turnover exceeds Rs 100 crore from January 1, 2021. The earlier limit was Rs 500 crore.
The move comes at a time the Centre and the states are facing a decline in tax receipts. The authorities had enforced e-invoicing of business-to-business transactions for companies with Rs 500 crore sales from October 1.
“With only about 50 days left for the rule to come into effect, mid-size companies would need to ramp up processes and IT systems to enable compliance with the new regulation,” Abhishek Jain, tax partner at EY, said.
The changes will bring a large number of medium enterprises under the ambit of e-invoicing. It is expected that it will be made available to all taxpayers for B2B transactions from April 1, 2021.
Prakash Kumar, senior adviser of Deloitte India, said: “This will help to curb tax evasion and increase tax collections. It would be interesting to see the preparedness of such class of taxpayers, who were actually informed about this date many months ago itself. However, going by the resounding success of the October 1 roll-out for the larger companies, MSME’s too should be able to comply with the new requirement.”