CBIC Reduces E-Invoicing Threshold Limit from Rs 50 to 20 Crores

The Central Board of Indirect Taxes and Customs (CBIC) has reduced threshold limit regarding applicability of GST E-invoicing to Rs 20 Crores with effect from 1^st April, 2022.

At present, e-invoicing is compulsory for those having Rs 50 crore sales. The change, indicates a massive scale-up of reporting requirements, which is expected to address tax evasion among small businesses, a weak point as far as tax compliance is concerned.

The step has been taken to tackle the practice of issuing informal sales invoices (kacha bill) that is common among some businesses, especially in sectors offering high margins. With business-to-business transactions of these entities getting captured at the e-invoicing portal, as now it will become hard for them to under-report their final sales.

In this regard, the official order said the decision has been taken on the recommendations of the GST Council. The authorities have been gradually deploying technology-enabled self-policing features of the new indirect tax system to improve tax compliance.