29.07.2023: E- invoicing mandatory for businesses with aggregate turnover of Rs 5 crore from August 1

Starting August 1, businesses with aggregate turnover of Rs 5 crore or more will have to mandatorily opt for e-invoicing under the Goods and Services Tax (GST). 

“GST taxpayers whose aggregate turnover exceeds Rs 5 crore in any financial year … Generating e-invoices for both supply of goods or services or both, or for exports will be mandatory from August 1,” the Central Board of Indirect Taxes and Customs tweeted on Friday. 

In May, the CBIC had notified the lower threshold that would come into effect from August 1.

The move is aimed at boosting collections and improving compliance under the GST, which has been a focus area of tax authorities.

Under e-invoicing, persons registered under GST are required to upload all B2B and export invoices to the Invoice Registration Portal (IRP). The IRP in turn provides a unique Invoice Reference Number to the person, which is then transferred to the GST portal. It helps match invoices between buyers and sellers and also reduce duplication and errors.

The current threshold for businesses to mandatorily register for e-invoicing is Rs 10 crore but the tax department has been gradually reducing it to bring more businesses under the system.

Experts noted that many midsized and expanding small businesses will be brought under the e-invoicing system now.

“By implementing e-invoicing, the government aims to combat tax evasion and facilitate real-time invoice matching between clients and vendors. This step ensures transparency and enhances compliance by modernising the tax collection system contributing to a broader GST base,” said Srivatsan Sridhar, Founder and CEO, Skydo.

E-invoicing was mandatory for businesses with an annual turnover of Rs 500 crore initially from October 1, 2020.

Source: Business Today 

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