CBIC: Reduction of E-invoice Limit to Rs. 5 Crores from 10 Crores starting 01 Aug, 2023

The government has announced a gradual decrease in the turnover limit for e-invoicing, and as per the notification released on Wednesday night (May 10, 2023), registered entities with an annual turnover of Rs. 5 crore will be mandated to use e-invoicing from August 1, 2023. The CBIC issued Notification No. 10/2023–Central Tax dated May 10, 2023 to amend Notification No. 13/2020 – Central Tax, dated March 21, 2020 to decrease the E-invoicing aggregate turnover limit from 10 crore to 5 crore w.e.f. August 01, 2023.

The Notification can be accessed at: https://egazette.nic.in/WriteReadData/2023/245793.pdf

The Central Board of Indirect Taxes and Customs (CBIC), in exercise of the powers conferred by sub-rule (4) of rule 48 of the CGST Rules, 2017, has decided to reduce the E-invoice limit from Rs. 10 Crores to Rs. 5 Crores, effective from 01 August, 2023. Compliance Calendar traced the development and bring to your attention regarding the electronic invoicing (E-invoice) system in India with respect to change in limits and applicability on E-invoice.

This decision of reducing the limit on the applicability of E-invoice was made by the CBIC on the recommendation of the council to further amend the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 13/2020 - Central Tax, dated the 21st March, 2020.

The E-invoice system was introduced by the Indian government with the aim of improving tax compliance and streamlining the invoicing process. It mandates certain businesses to generate and report invoices electronically to the government's designated portal, the Goods and Services Tax Network (GSTN). This digital transformation has been progressively implemented in phases, and the E-invoice limit has been revised from time to time.

With the new amendment, businesses with a turnover exceeding Rs. 5 Crores will now be required to generate E-invoices for their transactions. It is essential for businesses falling under this category to ensure compliance with the updated regulations to avoid any penalties or legal consequences. The reduced E-invoice limit signifies the government's continued efforts to enhance tax administration, promote transparency, and minimize tax evasion. By capturing invoice details electronically, the government aims to strengthen data analytics, minimize manual intervention, and facilitate seamless information exchange between businesses and tax authorities.

Compliance Calendar advise all affected businesses to review their invoicing systems and processes to ensure they are aligned with the updated requirements. Additionally, it is crucial to familiarize themselves with the guidelines issued by the GSTN and seek any necessary technical assistance or support to ensure a smooth transition to the revised E-invoice limit. We also recommend keeping a close eye on any further updates or clarifications provided by the government or relevant authorities regarding the implementation and compliance requirements of the revised E-invoice limit.