Simplified Explanation of Notification No. 17/2022 – Central Tax

Revised Threshold for Tax Invoice Preparation

Overview:

Notification No. 17/2022 revises the threshold limit for preparing tax invoices by registered persons under the Central Goods and Services Tax (CGST) Rules.

Key Details:

1. Amendment Overview:
   • The notification amends a previous notification (No. 13/2020-Central Tax) regarding the requirement for issuing tax invoices.
   • Effective Date: October 1, 2022.
2. Threshold Revision:
   • Previous Threshold: Registered persons with an aggregate turnover exceeding twenty crore rupees were required to prepare invoices as per specified rules.
   • Revised Threshold: The threshold is now reduced to ten crore rupees. This means that registered persons with an aggregate turnover exceeding ten crore rupees must now prepare invoices according to the specified rules.

Example:

• Scenario Before Amendment:

• • A business with an aggregate turnover of ₹22 crore needed to prepare invoices according to the rules from March 21, 2020, onward.

• Scenario After Amendment:

• • Starting October 1, 2022, a business with an aggregate turnover of ₹12 crore will also need to prepare invoices according to the updated rules. The previous threshold of twenty crore rupees no longer applies.

Purpose:

The amendment aims to:

• Broaden Compliance: Bring more businesses (those with turnover between ten and twenty crore rupees) under the invoice preparation requirements, ensuring better tax compliance.
• Ensure Consistency: Standardize invoice preparation for a larger number of businesses, helping streamline the invoicing process and improve tax reporting accuracy.