• Notification Date: 01.03.2022
  • Notification No: N/A

1.8 Lakh New Firms to Come Under GST Compliance Fold

The Government has made e-invoicing of business-to-business (B2B) transactions mandatory for the companies whose annual turnover is more than Rs.20 crores. It is anticipated that this new regulation will enhance GST compliance by 75 per cent. It can be expected that under this rule more than 180,000 GST identification numbers (GSTINs) will be added to the database. The new rule will be effective from 1 April 2022.

In October 2020, the government made e-invoicing for business-to-business transactions compulsory for those companies with a turnover of more than Rs.500 crores. The provision was modified for the firms. The new e-invoicing provision was extended to firms with a turnover of more than Rs.100 crores on 1 January 2021. It was reduced to the limit of Rs.50 crores on 1 April 2021.

According to the statement of an official, the new initiative will help to plug the leakages of the GST provisions. This will be beneficial to bolster GST collections in the long run.

According to the sources, there are about 240,000 eligible GSTINs for a 50 crores of annual revenue threshold. The threshold will be further reduced to 20 crores in April. This would lead to the addition of 75-80 per cent more GSTINs to the database. The robust collection of GST compared to the past few years proves the success of the new strategy. Tax compliance has highly increased after the e-invoicing system. The scopes of manipulation of invoices have been reduced to a considerable extent. It ensures that the genuine input tax credits (ITC) are only being claimed.