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Jan 24, 2024

e-Invoice Limit for Indian Taxpayers

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Shebi Sharma

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e-Invoicing is a system of electronic reporting of business-to-business (B2B) invoices to the GST authorities. It was introduced in India on 1st October 2020, to improve compliance, reduce errors, and facilitate data exchange among various stakeholders. In this blog post, we will discuss the e-invoice limit for Indian taxpayers, the applicability of e-invoicing under GST, and the implementation date of e-invoicing in India.

What is the e-Invoice Limit for Indian Taxpayers?

The e-invoice limit for Indian taxpayers is the annual aggregate turnover (AATO) of the taxpayer in any previous financial year from 2017-18 onwards. The AATO is the sum of the turnover of all the GSTINs registered under the same PAN across India.

The e-invoice limit for Indian taxpayers determines whether they are required to generate e-invoices for their B2B transactions or not. The e-invoice limit for Indian taxpayers has been revised several times by the GST authorities, based on the feedback and readiness of the taxpayers.

The latest notification issued on 10th May 2023 has reduced the e-invoice limit to Rs. 5 crore, effective from 1st August 2023. This means that taxpayers with an AATO of more than Rs. 5 crore in any previous financial year from 2017-18 onwards must generate e-invoices for their B2B transactions from 1st August 2023.

The following table shows the e-invoice limit for Indian taxpayers and the date of applicability in different phases:

PhaseTurnover LimitDate of Applicability
IMore than Rs. 500 crore1st October 2020
IIMore than Rs. 100 crore1st January 2021
IIIMore than Rs. 50 crore1st April 2021
IVMore than Rs. 20 crore1st May 2021
VMore than Rs. 10 croreOctober
VIMore than Rs. 5 crore1st August 2023

What is the Applicability of e-Invoicing Under GST?

The applicability of e-invoicing under GST depends on the nature of the transaction, the type of the recipient, and the location of the supplier and the recipient. The following are the general rules for the applicability of e-invoicing under GST:

  • e-Invoicing is applicable only for B2B transactions, i.e., supply of goods or services or both to a registered person under GST. It is not applicable for B2C transactions, i.e., supply of goods or services or both to an unregistered person or a consumer.
  • e-Invoicing is applicable for all types of supplies, such as taxable supplies, exempt supplies, zero-rated supplies, and deemed exports, except for the following:

-- Supplies made by a Special Economic Zone (SEZ) unit or developer to a Domestic Tariff Area (DTA) unit or developer.

-- Supplies made by a composition dealer under section 10 of the CGST Act.

-- Supplies made by a notified person under section 14 of the Integrated Goods and Services Tax (IGST) Act.

-- Supplies made by a person who is not registered under GST.

  • e-Invoicing is applicable for all types of recipients, such as regular taxpayers, SEZ units or developers, government entities, embassies, etc., except for the following: -- Recipients who are registered under the Reverse Charge Mechanism (RCM) under section 9(3) or 9(4) of the CGST Act.

-- Recipients who are registered as an Input Service Distributor (ISD) under GST.

-- Recipients who are registered as a non-resident taxable person under GST.

  • e-Invoicing is applicable for all types of locations, such as intra-state supplies, inter-state supplies, and cross-border supplies, except for the following: -- Supplies made to or from a place outside India.

-- Supplies made to or from a place in Jammu and Kashmir or Ladakh.

Also Read: E-Invoicing In India: Everything You Need to Know

What is the Implementation Date of e-Invoicing in India?

The implementation date of e-invoicing in India is the date from which the taxpayers who are covered under the e-invoice limit for Indian taxpayers must start generating e-invoices for their B2B transactions. The implementation date of e-invoicing in India has been different for different phases, as shown in the table above.

The latest implementation date of e-invoicing in India is 1st August 2023, for taxpayers who have an AATO of more than Rs. 5 crore in any previous financial year from 2017-18 onwards. This means that such taxpayers must generate e-invoices for their B2B transactions from 1st August 2023, and report them to the Invoice Registration Portal (IRP) within 7 days of the invoice date.

The IRP will validate the e-invoices and issue a unique Invoice Reference Number (IRN) and a Quick Response (QR) code for each e-invoice. The IRP will also share the e-invoice data with the GST portal and the e-way bill portal for seamless compliance.

Also Read: Understanding e-Invoicing Under GST: Applicability, Limits & Implementation Date

Final Words

e-Invoicing is a system of electronic reporting of B2B invoices to the GST authorities, which aims to improve compliance, reduce errors, and facilitate data exchange among various stakeholders. The e-invoice limit for Indian taxpayers is the annual aggregate turnover of the taxpayer in any previous financial year from 2017-18 onwards, which determines whether they are required to generate e-invoices for their B2B transactions or not.

The e-invoice limit for Indian taxpayers has been revised several times by the GST authorities, and the latest notification has reduced it to Rs. 5 crore, effective from 1st August 2023. The applicability of e-invoicing under GST depends on the nature of the transaction, the type of the recipient, and the location of the supplier and the recipient.

The implementation date of e-invoicing in India is the date from which the taxpayers who are covered under the e-invoice limit for Indian taxpayers must start generating e-invoices for their B2B transactions, and report them to the IRP within 7 days of the invoice date.

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