GST - #SectorUpdates
To ensure better compliance and policy formulation GST-registered businesses with annual turnover of more than Rs 5 crore will soon have to generate electronic invoices for B2B transactions. Currently, businesses with turnover of over Rs 20 crore will have to generate e-invoices for B2B transactions. Lowering of the threshold for e-invoicing would significantly expand the number of GST registrants, thereby, expanding the base of taxpayers, which is one of the stated objectives of GST. The subsequent reforms in the indirect system have played a big role in the recent surge in GST collections – from an average of Rs 0.9 trillion in FY18 to Rs 1.23 trillion in FY22 and are predicted to average Rs 1.4-1.5 trillion in FY23. The move will help widen the scope of e-invoicing and promote automation of GST returns. This would help in avoidance of invoice matching and would deter the generation of fake invoices, thereby leading to better tax compliance and collections.