The Indian government has decided to make GST e-invoicing mandatory for firms whose turnover exceeds Rs 5 cr via central tax notification number 10/2023. The GST council has recommended the GST e-invoice limit and the new rule has already been effective voluntarily from August 2023 as per the notification no. 10/2023 – Central Tax.
GSTN recently issued a new advisory to mandate generating GST e-invoices from 1st April 2024.
Latest Updates for GST E-invoicing 5 Crore Limit
- GST Advisory for E-invoice system transition is mandatory for assesses with turnover between 5 to 10 crores.
GST E-invoice Limit for B2B
In Oct 2020 GST E-invoicing (electronic billing) was initiated and was made essential for companies that have a turnover of Rs 500 cr or exceeds, The same limit was drawn down lower to Rs 100 cr and then after that, it gets Rs 50 cr in 2021 for the business-to-business (B2B) transactions.
The assessee should generate the invoices on their internal system or billing software and then notify the same to the invoice registration portal (IRP) — a requirement to get an input tax credit (ITC).
Understanding the E-Invoicing System
Electronic invoicing, or e-invoicing, refers to the generation, sharing, and storage of invoices in electronic form. It eliminates the need for physical invoices and facilitates the seamless exchange of invoice data between businesses and tax authorities.
The e-invoicing system in India operates through the GST Network (GSTN) platform. The GSTN acts as the central hub for processing and validating invoices. It allows businesses to generate standardized electronic invoices in the specified format.
The Need for E-Invoicing
E-invoicing has gained momentum globally as a reliable and efficient method of generating, sharing, and storing invoices electronically. By digitizing invoicing processes, businesses can eliminate manual errors, reduce processing costs, and ensure accurate and consistent data entry.
The e-invoicing system enhances compliance by recording transactions electronically, reducing the scope for tax evasion. It also fosters transparency by enabling real-time invoice exchange and quicker resolution of discrepancies. It helps promote seamless data integration among various stakeholders.
Additionally, expanding the e-invoicing system will contribute to the government’s broader agenda of creating a digital economy. By encouraging businesses to adopt electronic invoicing, the government aims to reduce the dependency on paper-based processes and promote sustainable practices.
Moreover, implementing e-invoicing will align Indian businesses with global standards and practices. Many countries have already adopted electronic invoicing as a mandatory requirement. India’s move towards e-invoicing demonstrates its commitment to staying abreast of international business trends and fostering a favourable investment climate. This alignment will facilitate smoother trade interactions with international partners and enhance India’s competitiveness in the global marketplace.
Recognizing these benefits, the Indian government introduced the e-invoicing system in October 2020 for businesses with an annual aggregate turnover exceeding INR 500 crore.
GSTN Preparation for New Portals
A GSTN would execute the process of empanelling at least six enrollment portals to ease the higher volumes of transactions. The same would have one invoice registration portal for all the businesses.
Invoice registration services will be uninterrupted by increasing portals as they provide adequate IT infrastructure and an ecosystem. In addition, it allows taxpayers to choose between different portals’ services. Moreover, it aids in balancing the load on any IRP portal that faces challenges due to long queues due to heavy load.”
A GST official said last week that the GST Council had been informed of the development of the empanelment to increase the portals and had approved the move.
As per the official data, of the 219,000 eligible, GST identification numbers (GSTINs) with a turnover lying between Rs 20 crore and Rs 50 crore, 153,000 would generate the invoices. Likewise, those who have a turnover of Rs 50-100 crore generate 48,217 invoices among the 86,963 GSTINs
Key Features of the E-Invoicing System
- Unique Invoice Reference Number (IRN): Each e-invoice generated under the system is assigned a unique IRN. The IRN serves as a digital identifier for that invoice. Uploading invoice details to the GSTN platform will help generate the IRN. The platform then validates and generates the IRN along with a digitally signed QR code.
- QR Code: The QR code contains essential details of the invoice. Scanning the QR code can help verify the authenticity and integrity of the invoice. It enables quick and easy validation by businesses, tax authorities, and other stakeholders.
- Real-Time Reporting: E-invoices are reported to the GSTN platform in real-time, allowing seamless integration with the GST system. This ensures that invoice data is readily available to tax authorities for verification and compliance purposes.
Previous Turnover Limit – Mandatory E-invoice for businesses with the above Rs.10 Crore Turnover
During the fifth phase, the previous turnover limit for mandatory e-invoicing under GST in India was set at INR 10 crore on October 1, 2022. This means that businesses with an annual aggregate turnover exceeding INR 10 crore must generate and report their invoices electronically using the e-invoicing system. All enterprises with an annual turnover exceeding INR 10 crore must create e-invoices for all B2B transactions.
For your information, the initial phase, launched on October 1, 2020, targeted businesses with an e-invoice turnover exceeding Rs. 500 crores. Subsequently, the second phase, commencing on January 1, 2021, extended the requirement to companies with revenues above Rs. 100 crores. The third phase, initiated on April 1, 2021, encompassed businesses with turnovers exceeding Rs. 50 crores. As part of the fourth phase, set to begin on April 1, 2022, the government expanded the electronic invoicing system to include Indian businesses with e-invoice limits ranging from Rs. 20 crores to Rs. 50 crores.
Revised Turnover Limit
To further expand the scope of e-invoicing and enable more businesses to leverage its advantages, CBIC has revised the turnover limit. Effective August 1, 2023, the new turnover limit for mandatory e-invoicing will be INR 5 crore. Businesses whose annual turnover exceeds INR 5 crore must use the e-invoicing system for business-to-business (B2B) supply of goods/services and exports.
FAQs
Is e-invoicing mandatory for a 5 crore turnover?
Yes, e-invoicing will become mandatory for a 5 crore turnover business on or after 1st August 2023.
What is the current limit for e-invoicing?
The current limit for e-invoicing is Rs.10 crore. On or after 1st August 2023, the e-invoice limit will be reduced to Rs.5 crore. It means taxpayers with annual aggregate turnover more than Rs.5 crore but less than Rs.10 crore must also begin generating IRN on their B2B invoices.
Practice area's of B K Goyal & Co LLP
Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice | Psara License | FCRA Online
Company Registration Services in major cities of India
Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon | Company Registration in Noida | Company Registration in lucknow
Complete CA Services
RERA Services
Most read resources
tnreginet |rajssp | jharsewa | picme | pmkisan | webland | bonafide certificate | rent agreement format | tax audit applicability | 7/12 online maharasthra | kerala psc registration | antyodaya saral portal | appointment letter format | 115bac | section 41 of income tax act | GST Search Taxpayer | 194h | section 185 of companies act 2013 | caro 2020 | Challan 280 | itr intimation password | internal audit applicability | preliminiary expenses | mAadhar | e shram card | 194r | ec tamilnadu | 194a of income tax act | 80ddb | aaple sarkar portal | epf activation | scrap business | brsr | section 135 of companies act 2013 | depreciation on computer | section 186 of companies act 2013 | 80ttb | section 115bab | section 115ba | section 148 of income tax act | 80dd | 44ae of Income tax act | west bengal land registration | 194o of income tax act | 270a of income tax act | 80ccc | traces portal | 92e of income tax act | 142(1) of Income Tax Act | 80c of Income Tax Act | Directorate general of GST Intelligence | form 16 | section 164 of companies act | section 194a | section 138 of companies act 2013 | section 133 of companies act 2013 | rtps | patta chitta