The changes from August this year indicate that the government is working to bring businesses, across all sizes, under mandatory e-invoicing under GST. “E-invoicing will help reduce mismatches in data reconciliation between sellers and buyers and curb fake invoicing. Therefore, the government’s vision to include small taxpayers in the e-invoicing bracket reflects good intent,” said Saloni Roy, partner, Deloitte India.

Besides promoting data accuracy, the extension of e-invoicing is expected to bring a larger number of smaller businesses, typically owner-driven firms resistant to digitisation, into the formal fold. This will streamline their processes, enhance cash flow management and foster transparency in their operations. “Small businesses could view this as an investment that could strengthen their governance mechanism, potentially changing how financial institutions and large customers perceive MSMEs,” said Rajeshree Sabnavis, ecosystems leader, tax regulatory and finance consulting, Grant Thornton Bharat.

However, lowering the GST e-invoicing threshold may pose some challenges as well for small businesses in the form of increased compliance burden. Expressing concern, Anil Bhardwaj, secretary general of the Federation of Indian Micro and Small & Medium Enterprises (FISME), said, “Even traders with a daily sales turnover of just Rs 1.5 lakh, which is a relatively small sum in today’s trade volume, will need to implement systems and processes for electronic invoicing, incurring additional costs.”