Uncertainty prevails over implementing e-invoicing for businesses with turnover of more than ₹5 crore. The Goods and Service Tax Council had made it mandatory for businesses with an annual turnover of over ₹5 crore to move to e-invoicing from January 1.
The Central Board of Indirect Taxes and Customs (CBIC) is yet to come out with a notification in this regard. Though experts feel the system is good, the time is too short to bring down the threshold for implementation.
At present, e-invoicing is mandatory for businesses with turnover exceeding ₹10 crore. E-invoicing prescribes a standardised format of an invoice. An identification number is issued against every invoice by the invoice registration portal (IRP) to be managed by GSTN. The invoice not registered on the portal will not be valid. In such a situation, input tax credit (ITC) on the same cannot be availed by the recipient, and will attract applicable penalties.
Earlier, on multiple occasions, Finance Ministry officials had said that following the recommendations of the GST Council, the threshold was being lowered in phased manner after implementing it for a turnover of ₹10 crore or more from October 1. The plan is to implement it for a turnover exceeding ₹5 crore from January 1, 2023.
Though tax officials did not say when the notification will be out, they said the system is good for policy making. It can help in analysing the four-digit harmonised system data to zero in on sectors which contribute more to GST and also identify those that have higher potential, but not contributing enough. Also, it will help weed out fake ITC.