Presently, e-invoice is compulsory for businesses with an annual turnover of over Rs 20 crore.
In a notification issued on Monday, the centre said it has amended the rule on the recommendations of the Council.
The GST Council, in its 37th meeting on September 20, 2019, had recommended the introduction of an electronic invoice in GST in a phased manner.
Initially e-invoicing was made mandatory for businesses having an annual turnover of Rs 500 crore, then it was brought down to ₹100 crore and then to Rs 20 crore and finally to Rs 10 crore.
Officials claim that by next year, businesses with turnover of Rs 5 crore will also be mandated to have e-envoicing.
Experts claim that with this move tax authorities will also be able to better analyse the trends and use or misuse of input tax credit across sectors and plug in revenue leakage. In the last two years alone, tax officials have detected Fake ITC worth over Rs 50,000 crore.
“The move to reduce turnover threshold and increase the ambit of e-invoicing is mainly aimed at resolving mis-match errors and to check tax evasion,” Saurabh Agarwal, Tax Partner, EY.
Considering the timelines, concerned businesses will have to start preparing and ramp up their IT systems to enable compliance with the e- invoicing norms, Agarwal adds.