The Finance Ministry said that businesses with an annual turnover of Rs 10 crore or more will have to send e-invoices for business-to-business (B2B) transactions starting on October 1.
As of now, all B2B transactions between businesses with a turnover of Rs 20 crore or more are required to use einvoices. The Central Board of Indirect Taxes and Customs (CBIC) sent out a notice on August 1 about the October 1 deadline, lowering the turnover threshold, and making e-invoices mandatory for businesses with a turnover of Rs 10 crore.
The GST Council decided to use e-invoices for business-to-business transactions. From October 1, 2020 on, companies with a turnover of Rs 500 crore or more will have to use e-invoicing for B2B transactions. From January 1, 2021 on, this limit was lowered to businesses with a turnover of Rs 100 crore.
From April 1, 2021, this limit will apply to companies with a turnover of Rs 50 crore, and from April 1, 2022, it will apply to companies with a turnover of Rs 20 crore. One of the biggest benefits of lowering the limits on turnover thresholds is that it will gradually increase the GST tax base. It would also cut down on paperwork and make it easier to send invoices. E-way bills would also be made automatically.
Sources say that e-invoices have a unique invoice reference number that is made by the invoice registration portal. This means that there are less mistakes when typing and that the information is sent automatically to the GST portal.
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