New E-Invoicing Norm To Add 1.8 Lakh New Firms Into GST Compliance Fold: Report

Compulsory e-invoicing of business-to-business (B2B) transactions for companies with an annual turnover of over Rs 20 crores will increase GST registrations by 75 per cent.

Apparently, this new system will add about 180,000 GST identification numbers (GSTINs) to the overall database. The regulation will come into effect from 1^st April, 2022.

The e-invoicing of B2B transactions for companies with a turnover of more than Rs 500 crore was made mandatory back in October 2020.

Then, the provision was extended for firms with turnovers worth over Rs 100 crore and Rs 50 crore on 1^st January, 2021 and 1^st April, 2021 respectively.

“Widening the scope to cover small and medium entities will not only help expand GST coverage, but plug the leakages. This will further bolster GST collections,” an official in the know of developments was quoted by Mint.

The source added, “Currently, there are about 240,000 eligible GSTINs for over ₹50 crore annual revenue threshold. We hope to add at least 75-80% more by lowering the threshold to ₹20 crore in April. E-invoicing has helped improve compliance, which is visible in robust GST collections. It also helps prevents tax evasion.”

E-invoicing reduces the scope of manipulation of invoices and thus ensures that only genuine input tax credits (ITC) are claimed.