GST Rule Change from today to Impact Lakhs of Indian Companies

Starting today, a new Goods and Services Tax (GST) threshold will come into effect for businesses with a turnover of over 5 crore. The Ministry of Finance has issued a circular regarding the GST system, which mandates that businesses exceeding the 5 crore turnover mark must generate e-invoices from today.

From today onward, companies engaged in B2B transactions valued over Rs 5 crore will be required to produce electronic invoices (e-invoices). Currently, for all B2B transactions, companies need to generate e-invoices only if their annual revenue is Rs. 10 crore or more.

Also Read: E Invoicing under GST: A Comprehensive Guide to E-Invoicing

E-invoicing was initially introduced in 2020 for large companies with a turnover of more than Rs 500 crore. Surprisingly, within just three years, the threshold has now been significantly lowered to Rs 5 crore. Under the GST law, e-invoicing became mandatory for B2B transactions of companies with annual revenues over Rs 500 crore on October 1, 2020, and later for those with annual revenues over Rs 100 crore on January 1, 2021.

The turnover criteria for e-invoicing were gradually reduced further. Companies with a turnover of more than Rs 50 crore began producing B2B e-invoices from April 1, 2021. Later, from April 1, 2022, the threshold was lowered to Rs 20 crore, and as of October 1, 2022, it was further reduced to Rs 10 crore.

Also Read: GST notices from different states make life difficult for many companies

On another note, the GST council is expected to convene today to make a final decision regarding the implementation of GST on online gaming. Additionally, they will determine whether the 28% GST will apply to deposits or to every game. The revenue secretary highlighted yesterday that imposing a 28% tax on every game may result in repeated taxation of the same rupee, leading to an effective tax rate as high as 50%-70%.

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