According to an official, the government is expected to introduce a mandatory requirement for businesses to generate electronic or GST E-invoices for B2C transactions within the next 2-3 years.
Presently, for companies with a turnover of Rs. 5 crores and above, it is mandatory to issue e-invoices for their Business-to-business (B2B) sales and purchases.
The government is mulling over to extend the e-invoice mandate to include B2C transactions as well. Shashank Priya, a member of the Central Board of Indirect Taxes & Customs (CBIC), stated that efforts are underway to upscale GST systems and implement GST E-invoicing for B2C (business-to-consumer) transactions.
Priya further mentioned during an Assocham event that the consideration for implementing e-invoice for B2C transactions is ongoing. The focus is on enhancing GSTN capacities and establishing suitable systems while identifying sectors that can be prioritized for implementation. Although this initiative is a work in progress, there is potential for its advancement in the future.
Priya also noted that businesses with turnovers between Rs. 5-10 crore are not fully complying with e-invoice requirements, and CBIC officers have been encouraging non-compliant businesses.
The implementation of GST E-invoicing for businesses with a Rs. 5 crore turnover is still relatively slow. Instructions have been provided, and efforts are being made to encourage taxpayers by highlighting the advantages, such as ease of doing business and how it populates GSTR-1 and e-way bills, Priya mentioned at the National Conference on GST.
The government has been gradually making e-invoicing obligatory for businesses. Initially, as per the regulations of the Goods and Services Tax (GST), companies with turnovers exceeding Rs. 500 crores were mandated to adopt e-invoicing for their business-to-business (B2B) transactions starting from October 1, 2020. The threshold was then lowered for companies with turnovers over Rs. 100 crore from January 1, 2021.
Starting from April 1, 2021, companies with turnovers over Rs. 50 crore were required to issue B2B e-invoices, and this limit was further reduced to Rs. 20 crore from April 1, 2022.
From October 1, 2022, the limit was further reduced to Rs. 10 crore, and as of August 1, 2023, the limit was extended to businesses with turnovers of Rs. 5 crore.
