With the recent E-Invoice update, the e-invoice turnover limit for electronic invoices has become a great topic of interest. One of the points discussed includes the government’s active offer of support to businesses under this e-invoicing regime.

Several circulars and notifications regarding GST have been issued to ensure a smooth implementation of electronic invoices. 

In other words, if you want to know whether your company has exceeded the threshold for e-invoices, you have come to the right place. A recent government decision has lowered the e-invoice threshold to Rs. 10 crores for businesses with an annual aggregate turnover above Rs. 10 crores.

This guide will put together all the details about the new e-invoicing regulations.

A] About the decision on the threshold for e-invoice

E-invoices under GST are introduced in the country phase by phase based on AATOs (Aggregate Annual turnover). Concerning GST notification 17/2022, the e-invoice turnover limit has been reduced from Rs. 20 Cr to Rs. 10 Cr.

According to the government’s Department of Finance, business-to-business (B2B) transactions involving an aggregate annual turnover exceeding Rs 10 crore are required to generate electronic invoices from the 1st of October onward.

B] What is e-invoicing generation in GST?

A GST-registered member submits all B2B invoices to the Invoice Registration Portal (IRP), through which an Invoice Reference Number (IRN) is generated. It generates digitally signed e-invoices and QR codes.

This is commonly referred to as the “e-invoice” by the buyer.  The notified supplier has issued the buyer a PDF of the invoice copy (with QR code) following the e-invoicing process. 

For more information on e-invoicing generation, you can read our informative guide on Bulk E-invoice Generation in TallyPrime and QR Code Integration.

C] Is it compulsory for businesses to comply with e-invoicing regulations?

Today most business owners wonder is e-invoicing is mandatory. Well, yes, it is. If your business generates more than INR 20 crores, e-Invoicing is mandatory as of 1st April 2022. E-invoicing will apply to businesses exceeding the turnover threshold from 1st October 2022 when the threshold drops to INR 10 crores. Taxpayers whose businesses fall within these limits must generate an e-Invoice through the GST e-Invoice portal or their ERP if it can create an e-Invoice directly.

For a more detailed overview of e-invoicing read: E-Invoicing in Tally: Everything You Need To Know.

D] Business To Which the New e-invoicing rules are Applicable

In the financial year 2017-18 to 2021-22, businesses with a total annual turnover of more than Rs.10 crore were required to generate e-invoicing by the government from 1st October 2022 onwards. 

This regulation applies to all businesses exceeding the given turnover limit.

According to the government, this will be applied to the following invoices: 

  • Tax invoices
  • Debit notes 
  • Credit notes 
  • Invoice-cum-bill of supply

E] Turnover limit for e-invoices

The GST taxpayer had originally been restricted to INR 500 crores if they were required to generate an e-invoice when the e-invoice was implemented on 1st October 2020. 

GST taxpayers with aggregate turnover exceeding INR 10 crores are required to issue e-invoices from 1st October 2022, as per Notification No. 17/2022-Central Taxes dated 01-08-2022.

A company’s aggregate turnover is calculated by adding all outward supplies (sales or services), regardless of whether they are B2B, B2C, SEZ, or export goods, taxable or exempt. Together, they must be combined to determine if the turnover limitation applies.

F] How to implement e-invoicing for your business?

E-invoicing is one of India’s biggest reforms for businesses. Organisations must take dynamic steps to ensure the smooth implementation of this reform, such as those listed below, to ensure the system works effectively.

1. Identify the requirements for implementing e-invoicing in your organisation.

As e-invoicing is relatively new, most organisations need to become more familiar with what is required to integrate it into their process. To get your organisation ready to move forward with e-invoicing, a checklist must be prepared to determine if your organisation is prepared for it. 

2. Understand the e-invoice schema within your organisation

Until recently, businesses used to generate invoices in a manner that was entirely unregulated and without any common format or set of regulations. This new e-invoice format will be a standard format for all organisations, and it will be based on international and other industry standards and apply to all organisations. 

3. Find a suitable vendor to reorient your ERP systems

It is time to investigate vendors who can reorient your ERP systems in line with the new standards for e-invoicing. Invoicing and a vendor with sufficient experience should handle GST in India.

Through the e-invoicing journey, the vendor should provide you with constant support and dynamic updates on the software. 

4. Prepare for the launch of e-invoicing

New systems can be challenging to set up for the first time. A smooth implementation requires more than just installing physical systems and software, nor is it limited to training staff. The benefit of implementation should be discussed with employees, and they should be encouraged to contribute voluntarily. 

G] What are the penalties for businesses not complying with new e-invoicing regulations?

Governments are making every effort to ensure that every business follows the new e-invoicing regulations. If anyone misses out, they will be liable to pay the penalty. As a penalty, the business must pay 100% of the tax due if its turnover exceeds INR 10 crores, or it must pay INR 10,000, whichever is higher.

Those who comply with the GST e-invoice rule and adhere to its provisions will be able to avoid such penalties. It is easy to comply with these regulations when you use business management software that generates e-Invoices upon creating a new invoice.

H] Conclusion

We hope we have satisfactorily answered all your questions about the new e-invoicing regulations. If you are interested in ensuring that your business complies with these regulations, then  MarkIT Solutions comes to the rescue. Using our ERP business management software, you’ll be able to comply with the newly released regulations on invoicing.