GST e-invoicing mandatory from January 1, 2021 if turnover exceeds Rs 100 cr

The Central Council for Indirect Tax and Customs (CBIC) notified on Tuesday that electronic invoices for GST will be mandatory for any company with sales above Rs 100 million as of January 1, 2021. The pre-set threshold was a sales volume 500 million rupees.

“Within the framework of the exercise of the powers granted by virtue of sub-rule (4) of Rule 48 of the Central Tax Rules on goods and services of 2017, the government, based on the recommendations of the Council, makes the following amendments Additional information in the Notice of the Government of India in the Ministry of Finance (Revenue Administration), No. 13/2020 - Central Tax, March 21, 2020, published in The India Gazette, Exceptional, Part Two, Section 3, Subsection (1) with Notice No. GSR 196 (E) of March 21, 2020, which is: - e-invoicing, Ministry of Finance, Medium Enterprises, Central Goods and Services Tax Rules

In the aforementioned notice, in the first paragraph, from the first day of January 2021, for the words “five hundred crores”, the words “one hundred crore rupees” shall be replaced, as indicated in the notice.

The changes will bring a large number of midsize organizations to the field of electronic invoicing. It is expected to be available to all contributors for B2B transactions as of April 1, 2021.

"The inclusion of distributors with sales ranging from 100 to 500 Indian rupees, within the series of electronic invoices, is another step towards formalizing the economy." Harpreet Singh, Partner, Indirect Tax, KPMG India said: "There may be some initial pitfalls in implementation, although in the long term it is likely to lead to more transparency, better tax administration and automation of tax filing and compliance.

The electronic transaction invoicing system has been implemented on a mandatory basis for companies with a turnover greater than Rs 500 million as of October 1.

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