Businesses with turnover of over Rs 5 crore should generate digital or e-invoice for B2B transactions with impact from August 1.
Currently, companies with turnover of Rs 10 crore and above are required to generate e-invoice for all B2B transactions.
The finance ministry by a notification dated May 10 has notified a discount in threshold for e-invoicing. Effective August 1, any taxpayer with turnover exceeding Rs 5 crore ought to elevate e-invoices for B2B provides.
Deloitte India Partner Leader Indirect Tax Mahesh Jaising stated with this announcement, scope of MSMEs beneath e-invoicing shall be expanded they usually might want to implement e-invoicing.
“For firms e-invoicing is a boon relatively than a bane as suppliers who’re e-invoicing compliant end in correct stream of enter tax credit score and scale back the churn round credit score points,” Mr Jaising added.
AMRG & Associates Senior Partner Rajat Mohan stated phased implementation of e-invoicing has resulted in diminished disruptions, improved compliance and elevated income.
E-invoicing was initially applied for giant firms with turnover of greater than Rs 500 crore, and inside 3 years the brink has now been lowered to Rs 5 crore.
“Inclusion of MSME sector within the e-invoicing regime would profit the general enterprise ecosystem by decreasing prices, rationalising errors, guaranteeing sooner bill processing, and in addition limiting industrial disputes in the long run,” Mohan added.
Under Goods and Services Tax (GST) regulation, e-invoicing for business-to-business (B2B) transactions was made necessary for firms with turnover of over Rs 500 crore from October 1, 2020, which was then prolonged to these with turnover of over Rs 100 crore efficient January 1, 2021.
From April 1, 2021, firms with turnover of over Rs 50 crore had been producing B2B e-invoices, and the brink was introduced right down to Rs 20 crore starting April 1, 2022. From October 1, 2022, the brink was additional lowered to Rs 10 crore.
EY Tax Partner Saurabh Agarwal stated the business must assessment their vendor masters and be certain that any vendor supplying items or companies and crossing the brink turnover of Rs 5 crore is essentially issuing a e-invoice from August 2023 to keep away from any dispute with respect to availment of enter tax credit score (ITC).
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