E-invoicing Likely mandatory from Jan 2023 for businesses having turnover over Rs.5 crore a year

Businesses with an annual turnover of over Rs.5 crore will have to move to an e-invoicing system under goods and services tax (GST) next year i.e Jan 2023.

A government official with knowledge of the situation said that the GST Network has requested its technology providers to get the site ready to handle the extra capacity by December.

At present, the threshold is Rs.20 crore, which is going to come down to Rs.10 crore from 1st October.

The official stated that the goal is to bring all companies under E -Invoice with a turnover of more than Rs.1 crore operating under this framework by the end of the following financial year

The GST Council had made the decision to introduce electronic invoices gradually. All small enterprises are to be integrated into the formal economy. From January 1, enterprises with a turnover of more than 5 crore rupees would be required to use electronic invoicing, the official stated.

For electronic invoicing, a machine-readable standard format is used. It would be useful in synchronising sales information between a small company vendor and big business customers, which is needed to submit a tax credit claim. The official claimed that this would increase the GST base, enhance compliance, and speed up the discovery of bogus ITC claims.

Businesses with a combined annual turnover of at least Rs. 10 crores have switched to e-invoicing for B2B transactions as of October 1. E-invoicing for B2B transactions was first made compulsory for companies with a turnover of Rs.500 crore from October 1, 2020.

Then, as of January 1, 2021, this threshold was reduced to firms with a Rs. 100 crores in turnover, and as of April 1, 2021, it was once again amended to Rs. 50 crore in turnover. Businesses with annual turnover over Rs. 20 crores were eligible as of April 2022.