NEW GST Rules

 

NEW GST Rules

GST Rules changing from 01.08.2023, Lakhs of Companies in India to be impacted: Starting on August 1, companies with a B2B transactional value of over Rs.5 crore will be required to produce an electronic or e-invoice. For all B2B transactions, companies must currently generate an electronic invoice if their annual revenue is Rs.10 crore or more. 

 New Delhi: New GST threshold for businesses turnover of over 5 crore will kick in from 01.08.2023. As per a Ministry of Finance has a circular with regard to the Goods and Services Tax (GST) system, Businesses with turnover of over 5 crore will be required to generate e-invoice from August 1.

 

Starting on August 1, companies with a B2B transactional value of over Rs 5 crore will be required to produce an electronic or e-invoice. For all B2B transactions, companies must currently generate an electronic invoice if their annual revenue is Rs. 10 crore or more. E-invoicing was initially (2020) implemented for large companies with turnover of more than Rs 500 crore, and within 3 years the threshold has now been lowered to Rs 5 crore. E-invoicing for business-to-business (B2B) transactions was made mandatory under GST law for companies with annual revenues over Rs 500 crore starting on October 1, 2020, and then for those with annual revenues over Rs 100 crore starting on January 1, 2021.

 

Companies that had a turnover of more than Rs 50 crore started producing B2B e-invoices from April 1, 2021. from April 1, 2022, the barrier was reduced to Rs 20 crore. The threshold was further reduced to Rs 10 crore as of October 1, 2022.

 

Meanwhile, the GST council is likely to meet on August 02, to finally decide the implementation of GST on online gaming. The council will also decide whether the 28% GST will be levied on the deposits or on every game. The revenue secretary yesterday had acknowledged that levying 28% tax on every game will lead to repeated taxation of the same rupee resulting in the effective tax rate going as high as 50%-70%.

 

GST e-invoice rule: A boon for MSME sector:

Experts believe that change in e-invoice rule and inclusion of companies with lesser turnover can help boosting the MSME entities. Deloitte India Partner Leader Indirect Tax Mahesh Jaising said with this announcement, scope of MSMEs under e-invoicing will be expanded and they will need to implement e-invoicing, reported PTI.

"For companies e-invoicing is a boon rather than a bane as suppliers who are e-invoicing compliant result in proper flow of input tax credit and reduce the churn around credit issues," Jaising added.

Another expert, AMRG & Associates Senior Partner Rajat Mohan said that phased implementation of e-invoicing has helped in reducing disruptions, improving compliances and increase in revenue.

"Inclusion of MSME sector in the e-invoicing regime would benefit the overall business ecosystem by reducing costs, rationalising errors, ensuring faster invoice processing, and also limiting commercial disputes in the long term," Mohan added.

Reducing the threshold limit for issue of e-invoice for B2B transactions from ₹10 crore to ₹5 crore will help the GST department in raising revenue and tackling tax invasion. Other than this, the government has also started using robust data analytics and artificial intelligence to identify and track risky taxpayers. To formulate a much targeted intervention, it has also begun sharing of data with partner law enforcement agencies.

P.Agash (21UCM002)

S.Avinash (21UCM004)

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