NEW DELHI: The Central Board of Indirect Taxes and Customs (CBIC) announced on Thursday that starting on October 1, 2022, Goods and Service Tax (GST) payers whose combined turnover exceeds Rs 10 crore in any financial year will be required to compulsorily generate e-invoices for business-to-business (B2B) supply of goods or services, or both, as well as for exports.

However, it stated that a number of registered persons, regardless of turnover thresholds, are exempt from generating e-invoices.

These include a banking institution, an insurer, a goods transport agency, a registered person providing passenger transportation services, and a financial institution, including non-bank financial institutions.

A registered person who offers entrance to the screening of cinematic pictures in multiplexes is also excluded from generating bills for their services. In addition to this, a SEZ unit, government agencies, and local governments fall within the exempted category, according to a tweet from CBIC.

To digitise a greater number of transactions, the government decided to expand the scope of e-invoicing for enterprises by lowering the obligatory turnover barrier under the GST system from Rs 20 crore to Rs 10 crore as of October 1, 2022.Sources informed that the action also aims to increase compliance, increase transparency in the reporting of sales, and decrease errors. According to the GST Council's suggestions, the maximum has been increased.

One of the criticisms of GST after it went into effect on July 1, 2017, was that the tax authorities were unable to streamline the return filing process and were unable to perform invoice matching between the buyer and supplier, which raised concerns about potential revenue leakages and non-compliance going unnoticed.

This phased move to bring more taxpayers under e-invoicing may deter the generation of fake invoices, whereby leading to better tax compliance and collections.

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