The government has expanded the mandate for e-invoicing or real-time reporting of business-to-business sales to all businesses. Currently, those with sales of more than 50 crores are required to use e-invoicing. However, with the latest notification, the Central Board of Indirect Taxes and Compliance has decided that the latest changes will take effect on April 1, 2022. In this article, you will understand the latest update of the GST e-Invoicing turnover limit reduced.
What is e-Invoicing?
- The submission of e-Way Bills on the single GST platform facilitates the movement of products from one location to another. Similarly, ‘e-Invoicing,’ also known as ‘electronic invoicing,’ is a mechanism through which GSTN authenticates B2B invoices electronically before they are used on the single GST portal.
- The Invoice Registration Portal (IRP) generates a unique identifier for each invoice in the electronic invoicing system, which is then handled by the GST Network (GSTN).
- Real-time transfer of invoice data from einvoice1.gst.gov.in portal to GST and e-way bill portals is a feature of both systems.
- As the data is sent directly from the IRP to the GST site, it removes the requirement for human data entry for filing the GSTR-1 return and for generating part-A of the e-way invoices.
Benefits of E-Invoices for your business
- With e-Invoice, the GST data reconciliation gap is closed and mistakes related to mismatches are less likely to happen.
- e-Invoices generated by software may be read by another, facilitating compatibility and reducing data entry mistakes.
- Genuine input tax credits will be more readily available.
- Tax authorities are less likely to conduct audits or surveys since the data they need is readily available at the transactional level.
- E-invoice makes it possible to keep track of supplier-prepared invoices in real-time.
- Necessary invoice information would be auto-populated in the different returns, most notably for the generation of part-A of e-way bills.
CBIC announces GST e-Invoicing turnover limit Reduced
- The finance ministry has expanded the need for electronic invoicing or real-time reporting of business-to-business sales to include all firms with annual turnovers above Rs. 20 crores.
- The Central Board of Indirect Taxes and Customs (CBIC) has stated that the GST E-invoicing turnover ceiling would be reduced from Rs 50 crore to Rs 20 crore with effect from 1st April 2022.
- According to the notification, the revisions were made in response to suggestions made by the GST council.
- Taxpayers having GST Registration in India whose aggregate annual turnover or revenue (calculated using their PAN) is equal to or greater than the stipulated maximum are now eligible for GST E-invoicing.
Impact of e-Invoicing under GST turnover limit reduced
- The National Informatics Centre’s e-invoicing system will make it harder for these firms to under-report their actual revenues and transactions.
- “Kacha bills,” or informal sales invoices, are a common practice among some enterprises, particularly in areas with significant profit margins. These enterprises will now be forced to issue e-invoices starting on 1 April, and if the invoice is not genuine, the receiver will not be able to claim input tax credits on it and massive fines will be imposed.
- The government has extended automation and as a result, reduced input tax credit frauds and revenue leaks.
- Tax reform, which was first opposed by small businesses and dealers, is now in its last stages, as seen by this development. Compliance enforcement facilitated by technology has already resulted in increased GST Return filing and Tax buoyancy.
Important tips for Better E-Invoicing under GST Registration
- You can save your time and money spent on accountant salary using Easy Gst Billing & Payment Collection Software.
- Using our GST Invoicing Software, you can avail several features including
- Generate, download, and send GST invoices to all of your clients promptly.
- may now quickly record and monitor your costs that include GST paid input credit.
- Track all clients who haven’t paid you yet, including the late amount and GST tax.
- Automatically calculate the output, input, and net GST liabilities of the GST tax.
- Never miss the deadlines for filing your GST returns again thanks to a simple fill-up form
- Receive notifications and other GST updates right away.
- Install – GST Billing, eInvoice & Accounting App can also be used on mobile and is a very affordable service to efficiently manage your e-Invoicing.
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