In a significant development, the GST Council has announced a major change in the Goods and Services Tax (GST) rules.
Starting from August 1, companies with a turnover exceeding five crore rupees will be required to issue electronic or e-invoices for their business-to-business (B2B) transactions.
This marks a reduction in the threshold, as previously only units with a turnover of Rs 10 crore or more were mandated to generate e-invoices for B2B transactions.
The Finance Ministry issued a notification on May 10, officially lowering the limit for issuing e-invoices for B2B transactions. The new limit of Rs 5 crore will come into effect from August 1.
Mahesh Jaisingh, Partner and Indirect Taxes Leader at Deloitte India, highlighted that this change will expand the coverage of Micro, Small, and Medium Enterprises (MSMEs) under the e-invoicing system, necessitating their adoption of e-invoicing.
Rajat Mohan, Senior Partner at AMRG & Associates, noted that the phased implementation of e-invoicing has proven beneficial, reducing bottlenecks, improving compliance, and increasing revenue.
Initially introduced for larger companies with turnovers exceeding Rs 500 crore, the threshold has gradually been lowered over the course of three years to include businesses with turnovers as low as Rs 5 crore.
