Over 4 Lakh Businesses to Issue E-invoices from 1st Aug 2023

As of August 1, there will be a significant change in the mandatory e-invoicing requirements in India. The aggregate annual turnover threshold for issuing e-invoices will be lowered from ₹10 crore to ₹5 crore. This means that businesses with an annual turnover of ₹5 crore or more will be required to issue e-invoices through the Invoice Registration Portal (IRP).

According to Dheeraj Rastogi, an Indian Revenue Service Officer, the number of assesses required to comply with the mandatory e-invoicing norm will increase from around 6 lakh to around 10 lakh after lowering the threshold. It's worth noting that this number does not include exempted categories such as banks, Non-Banking Financial Companies, or insurance companies.

The process of e-invoicing involves uploading specified particulars of the invoice in FORM GST INV-01 on the IRP to obtain an Invoice Reference Number (IRN). The invoice copy containing the IRN, along with a QR Code, is considered the e-invoice in GST. It's crucial to ensure that invoices are registered on the portal to be valid for claiming input tax credit (ITC) and avoid penalties.

The e-invoicing system facilitates the exchange of structured invoice data between suppliers and buyers in an integrated electronic format. It's important to clarify that the term "e-invoice" in this context does not refer to the generation of an invoice by a government portal.

As the new threshold comes into effect, the number of invoices generated daily is expected to increase from over 60 lakh to 65-67 lakhs. Efforts are being made to provide assistance to new entrant businesses, especially medium-sized businesses, to adapt to the e-invoicing requirements.

Additionally, it's mentioned that businesses will not have to pay anything to IRPs for basic services related to e-invoicing. However, for value-added services, there might be some payment required.

Overall, the move to lower the threshold for mandatory e-invoicing aims to streamline tax compliance and boost the efficiency of the GST system by incorporating digital processes.