Recent changes to the Goods and Services Tax (GST) regime’s application of electronic invoicing have been announced by the Indian government. The threshold limit for the required implementation of E-Invoicing has been reduced from Rs. 10 crores to Rs. 5 crores as of August 1, 2023 under Notification No. 10/2023 – CT issued May 10, 2023.
This indicates that taxpayers will now be compelled to abide by the E-Invoicing system if their yearly revenue has exceeded Rs. 5 crores in any year between 2017 and March 2023. This action is anticipated to bring more companies into the e-invoicing programme which aims to simplify the invoicing procedure and increase transparency in the GST system.
E-invoicing is a method of creating invoices electronically through the GST portal that helps to reduce the possibility of tax evasion and eliminate errors. The system makes it simpler for the government to manage transactions and check compliance by enabling firms to create, validate and authenticate their invoices in real-time.
Since its start in October 2020, the government has been gradually broadening the use of electronic invoicing and this most recent initiative is anticipated to attract more companies to the programme. The government hopes to improve the efficiency and transparency of the GST system with the aid of E-Invoicing and lessen the burden of compliance on businesses.
If a company’s annual turnover has exceeded Rs. 5 crores in any year from 2017 through March 2023 : it is critical that they are prepared to comply with the new E-Invoicing regulations starting on August 1st, 2023. Additionally, companies should make sure that their software and systems are upgraded to enable E-Invoicing and that they are informed of the system’s new laws and regulations.