Revision of Aggregate Turnover for issuance of E- Invoice under GST Regime

Blog   wpadmin   March 25, 2022

Executive Summary:

This article describes:

      • Throws light on latest notification of Revision of the Aggregate Turnover Limit for issuance of E- Invoices.
      • Further lists down the Businesses which are exempted from the above mentioned mandate.

Introduction:

E-invoicing is a method of electronically generating invoices in a predetermined format. The turnover of all GSTINs under a single PAN in India would be included in the aggregate turnover for e-invoicing. Since October 1, 2020, India has begun implementing e-invoicing under the GST framework in a progressive manner.

Under the GST regime, an e-invoice is a mechanism in which B2B invoices are electronically validated by GSTN and subsequently used on the common GST site. The Invoice Registration Portal (IRP), which is operated by the GST Network, will provide an identifying number against each invoice under the electronic invoicing system (GSTN).

Businesses that required e-invoicing:

E-invoicing is required for registered persons whose aggregate turnover (based on PAN) in any previous financial year from 2017-18 onwards exceeds the stipulated limit (as per relevant announcement).Businesses can benefit from e-invoices in a variety of ways, including auto-reporting of invoices into GST returns and auto-generation of e-way bills (where required). E-invoicing will also aid standardization and accessibility, resulting in cost savings. A reduction in the number of disagreements between transacting parties, an improvement in payment cycles, and a reduction in processing time lowering expenses and increasing overall business efficiency.

Revision of the E-Invoice Aggregate Turnover Limit:

The CBIC (Central Board of Indirect Taxes and Customs) has lowered the turnover limit for obligatory e-invoice (electronic invoice) issuing under the goods and services Tax (GST) to INR 20 Cr. from the previously specified limit of INR 50 Cr. The Central Board of Indirect Taxes and Customs stated in Notification 01/2022, which was issued on February 24, 2022, that the minimum threshold will be Rs. 20 Crore and will be effective from April 1, 2022.As a result, small firms with a turnover of less than Rs. 20 crore would be required to provide e-invoices instead of informal sale invoices or “kacha bills.” Only a registered e-invoice with an Invoice Reference Number (IRN) is regarded genuine, and failure to comply will result in non-compliance.

Businesses excluded from the E-Invoicing mandate include:

Regardless of turnover, e-invoicing is not applicable to the following types of GST registered persons:

  • Special Economic Zone Unit
  • An insurance, a bank, or a financial institution, including a non-banking financial corporation (NBFC)
  • The Goods Transport Agency (GTA) is a company that provides services related to the transportation of goods by road in a goods carriage.
  • Passenger transportation service providers
  • Service providers who provide entry to the screening of cinematograph films in multiplex screens.

Conclusion:

Smaller firms are anticipated to be impacted by this move, as they will now be required to provide electronic invoices. In effect of which the recipient will not be able to claim the input tax credit (ITC) if the invoice is not genuine, and fines will be imposed. According to the official, who spoke on the condition of anonymity, the new system will add 180,000 GST identification numbers (GSTINs) to the existing 240,000, bringing the total number of GSTINs to roughly 420,000.This E-invoicing enables real-time tracking of invoices prepared by a provider, hence decreasing the scope of fraud.

Regards,
Legal Team

Proind Business Solutions Private Limited
212, Tower C, I-thum, Plot No A-40, Sector 62, Noida, UP, India- 201301
No.: +91 120 4224203
Email: info@proind.in, website: www.proind.in

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