The financial year 2022-23 might be over but the impact of the previous year’s goods and services tax (GST) updates still continues. Many GST updates were made during the last financial year, and businesses also realigned their processes to comply with the dynamic tax laws.
In this new financial year, let’s rewind on the GST updates of FY 2022-23 and understand how they impacted businesses.
Extension of E-Invoicing To More Businesses
The department extended e-invoicing to businesses having turnover between Rs 10 crore to Rs 20 crore with effect from October 1, 2022. Eligible businesses must change their processes, including modifications to the invoicing/ billing software and GSTR-1 preparation. Even though GSTR-1 filing becomes easier with auto-population, complications arise in reconciliations.
However, this move has helped easy access to formal credit channels, such as invoice discounting for such businesses as the invoices run through an authentication system. On the flip side, enterprises sourcing from small businesses must ensure that their vendors comply with the mandate so that they don’t lose tax credits or face delays in claims. Once streamlined, they enjoy genuine Input Tax Credit (ITC) claims.
