Businesses with sales up to Rs 500 crore will be excluded from compulsory e-invoicing of Goods and Services Tax (GST) – a process which comes in force from October 1. The recommendation was reportedly made on July 22 by the GST implementation committee of the GST Council and will be notified in a week.
The compliance limit earlier was up to Rs 100 crore, but the empowered panel recommended the higher sales threshold, as per Yogendra Garg, principal commissioner - GST policy, at the Central Board of Indirect Taxes and Customs (CBIC), Mint reported. He added that the compliance would be brought in for businesses with Rs 100 crore sales “as it (the process) stabilises”.
The e-invoicing process was introduced to capture sales details, reduce errors, automate data entry and improve compliance and trust between tax officials and companies. It will also help auto-populate certain forms. Raising the compliance threshold gives smaller companies time to adopt the system.
Garg added, “the focus is on easing compliance burden and compliance cost. You will hear a lot of announcements towards that.”
GST, when introduced in 2016, subsumed several taxes and streamlined the taxation process but also caused disruptions.
“From the point of view of businesses, it also led to litigation relating to input tax credits and anti-profiteering provisions,” Pratik Jain, partner and leader of indirect tax at PwC India, said.
He added that a white paper outlining “what kind of GST India wants in three or five years from now” could propel the initiative.
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