Businesses with turnover of over Rs 20 crore will have to generate electronic invoice for B2B transactions from April 1, the Central Board of Indirect Taxes and Customs has said.
Under Goods and Services Tax (GST) law, e-invoicing for business-to-business (B2B) transactions was made mandatory for companies with turnover of over Rs 500 crore from October 1, 2020, which was then extended to those with turnover of over Rs 100 crore from January 1, 2021.
From April 1 last year, companies with turnover of more than Rs 50 crore were generating B2B e-invoices. This is now being extended to companies with turnover of over Rs 20 crore.
With this, more suppliers would be required to raise e-invoices with effect from April 1, 2022. If the invoice is not valid, input tax credit on the same cannot be availed by the recipient beside applicable penalties.
EY India, Tax Partner, Bipin Sapra said with this move, the government has taken the compliance automation to a larger set of taxpayers, which will not only simplify compliances but also further plug revenue leakages on account of input tax credit frauds.
AMRG & Associates Senior Partner Rajat Mohan said the SME sector would be on its toes to implement this change that may also alter many of the standard operating business processes for companies.