E-invoice Latest News – The Central Board of Indirect Taxes (CBIC) has announced on May 10, 2023, as an amendment to Notification No. 13/2020 to reduce the eInvoicing turnover limit to Rs. 5 crores, to be implemented w.e.f. August 1, 2023. This means eInvoice generation will be mandatory for taxpayers with an annual turnover exceeding Rs. 5 cr. This move aims to further improve compliance and avoid gaps in revenue collection. Currently, the threshold for a business annual turnover above Rs. 10 crores are required to issue eInvoicing.
The government has recently decided to make GST eInvoicing mandatory for businesses with aggregate turnover of Rs. 5 cr. or above. As the GST council has suggested this e-Invoice limit, the new rule will come effective from August 1, 2023, as per official notification. On May 10, the central government recommended a reduction of the eInvoice threshold to more than Rs. 5 cr. The same takes place in the financial year for companies whose turnover is above Rs. 10 cr. and then to Rs. 5 cr. This would be chosen to prevent revenue leakage, improve compliance management, and provide easy rules.
An official mentioned that “Portals will provide sufficient IT infrastructure and eco-system to ensure uninterrupted invoice generation for businesses. It also provides taxpayers with the convenience to select between services of different portals. It can help the GST system to balance the load in case the IRP portal experiences any challenges due to long queues.” Lowering the threshold will help provide better reconciliation of credits at the buyer’s end. While physical invoices face problems of matching data and human errors, e-Invoicing can mitigate such risks and more credit will be available.
The firms that used to generate an IRN via the government portal can now use TaxPro GSP, an e-Invoicing API Provider to generate, Cancel, and create IRN/QR codes within the ERP system, upon integration.
From August 1, 2023, e-Invoicing is mandatory for businesses with an annual aggregate turnover of over Rs. 5 crores in any previous financial year from 2017-18. The primary objective of bringing down the threshold turnover limit for eInvoicing is to control GST evasion and fraud while enhancing GST compliance.
The sectors, including transportation, banking, insurance, other financial institutions, non-banking financial companies, goods transportation agencies, and passenger transportation services are exempted. Hence, the units in the special economic zones.