E-invoices must for businesses with 5 crore turnover a year

The centre on Thursday announced it will be mandatory for all businesses with annual turnover of over Rs 5 crore to move to e-invoicing for business to business transaction under goods and services tax (GST) from August 1 this year.

The move is aimed at further improving compliance and further plugging gaps in revenue collection.

Currently, the threshold for business annual turnover above Rs 10 crore is required to issue e invoicing.


"With effect from the 1 day of August 2023, for the words "ten crore rupees", the words "five crore rupees" shall be substituted," said a notification issued by the Central Board of Indirect Taxes and Customs (CBIC).

The GST Council had decided to implement electronic invoice in a phased manner.

The aim is to bring all the small businesses under the formal economy.

Officials said that the GST Network has asked its technology providers to make the portal ready to handle the increased capacity by July end to avoid any glitches.

E-invoicing uses a standardised format that a machine can read.

E-invoices would also help in syncing sales data of a small business vendor and large corporate clients, which is used to claim tax credit.

Also this will help in swift detection of false ITC claims, broaden GST base and improve compliance, an official told ET.

E-invoicing for B2B transactions was first made compulsory for companies with turnover of Rs 500 crore from October 1, 2020.

This threshold was then lowered to businesses with turnover of Rs 100 crore from January 1, 2021 onwards and again was revised to companies having a turnover of Rs 50 crore from April 1, 2021. From April 2022, it was extended to businesses with turnover above Rs 20 crore.

From October 1, businesses having aggregate annual turnover of Rs 10 crore and above moved to e-invoicing for business-to-business (B2B) transactions.