Indian Government Implements Mandatory E-Invoicing for Businesses with Rs 5 Crore Turnover from August 1

Pune, 28th July 2023: In a significant development to bolster tax collections and enhance GST compliance, India’s Goods and Services Tax (GST) regime is undergoing a major change starting August 1. The government has issued a mandate for businesses with an aggregate turnover of Rs 5 crore or more to adopt e-invoicing. Previously, the threshold was set at Rs 10 crore, but the government has been progressively reducing it to encourage greater adoption of the e-invoicing system.

The Central Board of Indirect Taxes and Customs (CBIC) announced this change through a tweet, stating that GST taxpayers with an annual turnover exceeding Rs 5 crore are now required to generate e-invoices for all business-to-business (B2B) and export transactions.

E-invoicing is a process that involves uploading all B2B and export invoices to the Invoice Registration Portal (IRP) for businesses registered under GST. The IRP then issues a unique Invoice Reference Number (IRN), which is transferred to the GST portal. This helps in real-time invoice matching between buyers and sellers, reducing errors and duplications in the process.

The implementation of e-invoicing aims to combat tax evasion effectively and ensure better compliance among businesses. By bringing transparency and efficiency to the tax collection system, the government seeks to broaden the GST base and streamline tax administration.

Industry experts have lauded the move, recognizing its potential to curb tax evasion and improve compliance. Srivatsan Sridhar, Founder and CEO of Skydo, stressed that e-invoicing will foster a more transparent environment and boost compliance across businesses.