Policy

From January 1, e-invoicing mandatory for firms with turnover of ₹100 cr or more

Our Bureau New Delhi | Updated on November 11, 2020 Published on November 11, 2020

e-Invoicing essentially involves reporting details of specified GST documents to a Government-notified portal and obtaining a reference number.

The Finance Ministry has notified e-invoicing system for businesses having a turnover of ₹100 crore or more, with effect from January 1.

e-invoicing for businesses with turnover up to ₹500 crore started on October 1. Now, the threshold has been lowered. The Government has announced that this system will be for all assessees with effect from April 1 next year.

e-invoicing essentially involves reporting details of specified GST documents to a Government-notified portal and obtaining a reference number. It has many advantages for businesses such as standardisation, inter-operability, auto-population of invoice details into GST return and other forms (like e-way bill), reduction in processing costs, reduction in disputes, improvement in payment cycles and, thereby, improving overall business efficiency.

Abhishek Jain, Tax Partner at EY, said that aligned to the recent communications by various Government officials, e-invoicing has now been notified for ₹100 crore and above companies as well. “With only approximately 50 more days, these mid-size companies would need to soon gear up their processes/ IT systems to enable compliance with this new invoicing regulation,” he said.

Tanushree Roy, Director at Nangia Andersen India, said such a requirement would lead to a large number of mid-size enterprises being brought into the e-invioicing net. With only a few days left, such companies would need to gear up their IT and invoicing systems as well as train their employees to comply with this new requirement. “While this move of the Government would help in automating tax compliances, this is also expected to lead to efficient management of tax compliances,” she said.

The Government claims that huge advancements in technology sophistication, increased penetration of the internet, along with availability of computer systems at reasonable cost has made ‘e-invoice’, a popular choice worldwide. It hopes that this system will help in enhancing ease of doing business.

The GST Council, at its 37th meeting on September 20, 2019, recommended introduction of electronic invoice (‘e-invoice’) in GST in a phased manner. In the first month (October) of operations, it generated 5-6 lakh e-invoices per day and ended the month with 29 lakh as against an expected 20-21 lakh a day.

 

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Published on November 11, 2020
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