eInvoice Latest News: eInvoicing Mandatory for Businesses Above Rs. 5 Crore Turnover
The concept of eInvoicing was introduced under the Goods and Services Tax (GST) law. The GST council announced a reduction of the eInvoice threshold to Rs. 5 crores starting on January 1st, 2023. The same applies to companies whose turnover is Rs. 10 crores to Rs. 5 crores. It can help prevent revenue leakage and provide simplified rules.
The government seems to make eInvoicing mandatory for firms whose annual turnover is Rs. 5 cr. or exceeds. Hence, the limit is drawn lower down to Rs. 10 cr., as per the administration. The rule came into effect in 2023 and seems to digitalize a high volume of transactions, effective reporting, reduce errors or mismatches, and rectify compliance.
Read on to understand why eInvoice is mandatory for applicable taxpayers, eInvoice latest news, and how to perform bulk operations with eInvoice API.
What is eInvoicing under GST?
eInvoicing is wherein B2B invoices and a few documents are authenticated electronically by GSTIN for further use on the GST portal. Initially, the GST council decided to impose this concept covering the categories of large enterprises. Later on, it has been extended to cover mid-sized firms and small businesses as well.
Under the GST eInvoicing system, an identification number is issued against every invoice by Invoice Registration Portal (IRP), managed by GST Network (GSTN). All invoice information gets transformed from the portal to both GST and eWayBill portals in real time. Hence, it eliminates manual data entry, errors, and transaction disputes among the parties involved.
Who must generate eInvoice?
Earlier, phase 1 applied an eInvoice turnover limit of over Rs. 500 cr. from October 1st, 2022. During phase II, businesses with an annual turnover of Rs. 100 cr. started to issue eInvoice from January 2021.
Phase III was applicable for businesses having a yearly turnover of over Rs. 50 cr. from April 2021. A year later, the government reduced the limit to more than Rs. 20 cr. in Phase IV. Phase V was implemented from October 1st, 2022, for businesses with a turnover of over Rs. 10 cr.
The government decided to make eInvoicing mandatory for businesses with a cumulative yearly turnover of more than Rs. 5 cr. in the sixth phase, from January 2023.
As per the recent updates, eInvoice applies to:
Tax invoices
Debit notes
Credit notes
Invoice-cum-bill of supply
eInvoicing system covers the following transactions:
Taxable B2B supply of goods and services
Business-to-Government (B2G) supply of goods and services
Export sales, and
Sales falling under Reverse Charge Mechanism (RCM)
Is eInvoicing Mandatory? – Consequences of Non-Generation of eInvoices
If applicable business owners fail to generate eInvoices from the notified date, it will result in huge penalties. Non-complaint businesses are likely to pay Rs. 10,000 for every non-generated invoice. Moreover, non-generation of IRN is considered incomplete eInvoice and can attract a penalty. Besides, small businesses can face other adverse consequences, such as:
GSTR-1 may not get auto-filed with B2B sales details
Buyers cannot avail ITC, face delays, and may ultimately hold up payments. It affects the working capital of such businesses.
Buyers may deny invoices that are not compliant and can hamper the continuity of business contracts.
How TaxPro GSP Can help with eInvoicing?
TaxPro, India’s leading eInvoice service provider brings TaxPro GSP, a value-added API with a free java library and .Net Core or .Net DLLs. It eliminates the role of JSON files and multiple visits to IRP, as you can generate eInvoice within your ERP software itself.
TaxPro GSP works as a link between IRP and ERP, is helpful for high volumes pressure, and performs bulk eInvoice operation more effectively. Upon integration, you can generate, edit, preview, print, validate, create an IRN/QR code, and cancel eInvoices in bulk within existing software.
You can further explore additions like a customized print template, bulk eInvoice operations, eWayBill generation, and timely reporting to the GST portal. You will receive round-the-clock support from dedicated staff to resolve issues and enjoy seamless data handling.
Get started with TaxPro GSP for unified eInvoices and eWayBill generation!