Businesses With Over ₹ 5 Crore Turnover To Generate E-Invoice From August 1
New Delhi: Businesses with a turnover of more than ₹ 5 crore will have to generate electronic or e-invoices for B2B transactions from August 1.
Currently, businesses with a turnover of ₹ 10 crore and above are required to generate e-invoices for all B2B transactions.
The Finance Ministry through a notification dated May 10 has announced a reduction in the threshold for e-invoicing. From August 1, any taxpayer with a turnover of more than ₹ 5 crore will have to raise e-invoices for B2B supplies.
Deloitte India Partner Head Indirect Tax Mahesh Jaisingh said the announcement will broaden the e-invoicing scope of MSMEs and enable them to implement e-invoicing.
“E-invoicing is a boon rather than a bane for companies as suppliers who are e-invoicing compliant result in correct input tax credits and reduce confusion over credit issues,” added Mr Jaisingh.
Rajat Mohan, senior partner, AMRG & Associates, said the phased implementation of e-invoicing has reduced disruptions, increased compliance and increased revenue.
E-invoicing was initially implemented for large companies with a turnover of more than ₹ 500 crore, and the limit has now been reduced to ₹ 5 crore within 3 years.
“Inclusion of the MSME sector in the e-invoicing regime will benefit the overall business environment by reducing costs, justifying errors, ensuring speedy invoice processing and curbing business disputes in the long run,” added Mohan.
Under the Goods and Services Tax (GST) Act, e-invoicing for business-to-business (B2B) transactions was made mandatory for companies with a turnover of more than ₹ 500 crore from October 1, 2020, and later extended to those with a turnover of more than ₹ 500 crore. Above ₹ 100 crore from January 1, 2021.
From April 1, 2021, companies with a turnover of more than ₹ 50 crore have been generating B2B e-invoices, and the limit has been reduced to ₹ 20 crore from April 1, 2022. From October 1, 2022, the limit has been further reduced. 10 crores.
EY Tax Partner Saurabh Agarwal said the industry should review their vendor masters and ensure that suppliers of goods or services and vendors crossing the ₹ 5 crore turnover threshold issue e-invoices from August 2023. Input Tax Credit (ITC).