The Ministry of Finance, through Notification No. 10/2023, has reduced the threshold for mandatory e-invoicing to Rs. 5 Crore. GST-registered individuals with turnover above this limit in any financial year from 2017-18 are required to generate e-invoices.
Timeline
The new threshold is applicable from August 1, 2023, for all tax invoices and debit/credit notes issued to registered persons, including export transactions.
Impact
Businesses newly included in the e-invoicing requirement need to prepare, implement, and test their setup before the new threshold comes becomes effective. The GSTN has provided a sandbox environment for businesses to test their e-invoicing setup.
Due to the higher transaction volumes within the INR 50 million annual turnover category, which encompasses a considerable number of taxpayers, there are increased compliance challenges. Emphasizing the importance of adherence to the e-invoicing requirement, failure to generate e-invoices by small vendors can result in the loss of input tax credits or delays in claims for their partners.
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