FinMin to Expand the Mandatory E-invoice Net

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The Finance Ministry issued a notification on Monday to make e-invoicing mandatory for B2B transactions for all those entities in India whose aggregate turnover exceeds INR 100 million. It will come into effect on October 1, 2022. As of now, it is mandatory for only those companies whose aggregate turnover is more than INR 200 million. E-invoicing helps in diminishing the data difference between physical invoices and actual transactions, which arises from either fake invoicing or human errors.

 

The step is in consonance with the GST Council (2019) recommendation to gradually implement electronic invoicing across the country. A phased implementation keeps the resources facilitating the shift, like IT infrastructure, sound and steady. The following shows the phases in a tabular format.

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PHASE DATE TURNOVER
I October 1, 2020 >INR 5 billion 
II January 1, 2021 >INR 1 billion
III April 1, 2021. >INR 500 million
IV April 1, 2022 INR 200 million

 

Going by various media reports, there are plans to further widen the net and bring entities with a turnover of INR 50 million and more under the ambit of compulsory GST e-invoicing by January 1, 2023. This would result in the inclusion of numerous micro, small, and medium enterprises (MSMEs), which are still recovering from the Covid-induced setback. They might find it difficult to grapple with the detailed compliance rules and need time to catch up.

With various MSMEs cropping up, there emerges another significant issue of a variety of accounting and billing software used for storage of invoices, etc. For the sake of a standard version that will facilitate interoperability across the GST ecosystem, the GSTN is working on the empanelment of multiple accounting and billing software products to bring out a free-of-cost basic system for small businesses (with turnover< INR 15 million). The panel will include both cloud-based (online) and installed software (offline) products.


 

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