According to a circular by the Finance Ministry regarding the Goods and Services Tax (GST) regime, businesses with a turnover of more than Rs 5 crore will be required to provide electronic invoices from August 01, 2023.
For major businesses with revenue of more than Rs 500 crore, e-invoicing was initially adopted in 2020. However, within three years, the limit was reduced to Rs 5 crore. Starting October 1, 2020, businesses with annual revenue of more than Rs 500 crore were required by law to use electronic invoices for business-to-business (B2B) transactions. Businesses with annual revenue of more than Rs 100 crore as on January 1, 2021 were also required to do the same. From April 1, 2021, businesses with annual sales of more than Rs 50 crore can start generating B2B e-invoices. The limit has been brought down to Rs 20 crore by April 1, 2022. On October 1, 2022, the limit was further reduced to Rs 10 crore.
Srivatsan Sridhar, Founder and CEO, Skydo, said, “The threshold reduction for e-invoicing has been implemented in a phased manner considering the preparedness of businesses, especially small and medium-sized enterprises (SMEs). It is essentially aimed at driving adoption of digital invoicing and streamlining financial processes, reducing payment delays and improving overall cash flow, thereby making them more efficient and cost-effective for businesses and the government.”
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For businesses, the consequences of non-generation of e-invoice or non-compliance are that the business entity may face a penalty of 100% of the tax due, ₹10,000 per missing invoice and up to ₹25,000 per incorrect invoice, delayed payment and GST withholding. Therefore, it is important for businesses to understand the specific requirements, comply with e-invoicing regulations and ensure seamless integration of their invoicing systems with the designated ERP, Sridhar said.
According to GST news related to the Central Board of Indirect Taxes and Customs (CBIC), the ACES-GST backend application for central tax authorities now includes an automated return checking module for GST returns. Union Finance and Corporate Affairs Minister Nirmala Sitharaman in a recent assessment of CBIC’s performance directed to launch an automated return scrutiny module for GST returns at the earliest.
Earlier, in order to deploy this non-intrusive method of compliance verification, CBIC had launched the Automated Return Scrutiny Module for GST Returns in the ACES-GST Backend Application for Central Tax Authorities. According to a press release, this module will allow officials to scrutinize GST returns of centrally administered taxpayers who have been selected on the basis of data analytics and system-detected threats.
The module displays discrepancies to the tax authorities due to the risks associated with the returns. As per the press release, tax authorities are given a workflow to communicate with taxpayers through GSTN Common Portal with regard to discrepancies found under Form ASMT-10, receive taxpayer response in Form ASMT-11 and take action such as issuing acceptance order of reply in Form ASMT-12, issuing show cause notices or initiating audit or investigation.