Get Ready for New GST e-Invoicing Threshold: Essential Information You Must Know!

Get ready for the new GST e-Invoicing threshold! Learn about the revised threshold, exemptions, and consequences of non-compliance with essential information for taxpayers.

In the ever-changing landscape of taxation, a new development has taken center stage – the revision of the e-Invoicing threshold. Effective from August 1, 2023, this change, as notified by the Government of India in the Ministry of Finance (Department of Revenue) Notification No. 10/2023 – Central Tax, will impact taxpayers with a turnover of 5 Crores and above. It is crucial to understand the implications of this notification and prepare accordingly. Let’s delve into the details of this significant update.

Understanding e-Invoicing under GST:

e-Invoicing has become the talk of the town in the realm of GST, representing a technologically advanced solution for the invoicing process. It is now mandatory for GST-registered businesses engaged in Business-to-Business (B2B) transactions, akin to the obligatory use of e-way bills for transporting goods.

Who falls under the ambit of e-Invoicing from August 1, 2023?

Starting from August 1, 2023, all taxpayers who have exceeded the annual turnover of 5 Crores in any of the previous financial years since FY 2017-18 will be brought under the e-Invoicing system. They will be required to generate a unique Invoice Reference Number (IRN) and a Quick Response (QR) code. The QR code will contain invoice details that can be scanned for verification purposes.

Exemptions from e-Invoicing under GST:

The following registered persons, regardless of turnover, are exempted from the e-Invoicing requirements:

1. An insurer or a banking company or a financial institution, including an NBFC.

2. A Goods Transport Agencies (GTAs).

3. Registered persons providing passenger transportation services.

4. A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services

5. Special Economic Zone (SEZ) units (excluded through CBIC GST Notification No. 61/2020-Central Tax).

6. Government departments and local authorities (excluded through CBIC GST Notification No. 23/2021–Central Tax).

7. Persons registered under Rule 14 of CGST Rules for Online Information and Database Access or Retrieval (OIDAR) services

How is turnover calculated for threshold of E-Invoice under GST?

The threshold calculation is based on the PAN number, which involves summing up the turnovers of all GSTIN numbers. You can find this number on the Dashboard page of the GST Portal upon logging in.

Consequences of Non-Compliance with GST e-Invoice Provisions:

Failing to comply with this revolutionary system can result in hefty penalties. The penalty for not issuing an e-invoice is a staggering INR 10,000 per invoice or 100% of the tax due, whichever is higher. Submitting an incorrect or erroneous e-invoice can lead to a penalty of INR 25,000 per invoice. To safeguard your hard-earned money, it is vital to ensure 100% compliance with the e-Invoicing regulations.

Benefits of the GST e-Invoicing System:

The implementation of the e-Invoicing system is expected to minimize errors and discrepancies in invoicing while streamlining and optimizing the process. Ultimately, this will enhance tax law compliance and reduce instances of tax evasion.

Prepare for the New e-Invoicing Threshold:

The new e-Invoicing threshold will have a significant impact on taxpayers. It is crucial to proactively prepare for this change. Ignoring tax laws can lead to adverse consequences, so staying informed and taking necessary precautions is essential. Act now to ensure you are well-prepared for the upcoming changes. Remember, ignorance is not bliss when it comes to taxation, and it is always better to be safe than sorry.”