There is a major update regarding Goods and Services Tax (GST). The GST Network (GSTN) has made changes to the rules regarding transactions. The new rule will come into effect from May 1st, 2023, and it will be mandatory for businesses to comply with it. According to GSTN, from May 1st, any transaction's receipt or invoice must be uploaded on the Invoice Registration Portal (IRP) within 7 days. Changes have been made to the rules to ensure timely compliance with GST compliance.
As per GSTN, all businesses with a turnover of more than 100 crores will need to comply with this rule from May 1st. Under the new rule, businesses with a turnover of more than 100 crores will not be able to upload invoices older than 7 days. This means that receipts for transactions older than 7 days cannot be uploaded on GSTN, and returns cannot be claimed on them. However, this rule only applies to invoices. Businesses can still upload debit and credit notes after 7 days.
Businesses to suffer significant loss
As per GST regulations, if an invoice is not uploaded on the Invoice Registration Portal (IRP), then businesses will not be able to claim the Input Tax Credit (ITC) benefit. ITC is claimed to reclaim the difference between the raw material and the final product. Currently, companies can upload their e-invoices anytime, but after the new rule comes into effect, they will only have seven days to do so.
Benefits of new changes
The experts believe that the new rule will be helpful in increasing GST collection and companies will also get the benefit of ITC on time. Its objective is to strengthen the digitization process. The government has also made it mandatory to generate GST invoices for all transactions for businesses or companies with a turnover of more than 100 crores.
The expert opinion suggests that this process is being gradually implemented, and it will soon become mandatory for all businesses. Currently, businesses with a turnover of more than 10 crores are required to generate electronic invoices for all B2B transactions. The government had implemented this rule from 1st October 2022. Now, timely e-invoice uploading on IRP will benefit both the government and businesses.
