India: Compliance of E-invoicing under GST regulations

published on 28 February 2022 | reading time approx. 1 minute

The mechanism of E-invoicing was implemented for companies having turnover above INR 5 billion and later on such turnover thresholds were reduced periodically.  Currently, the compliance of E-invoicing was applicable only for registered taxpayer having turnover above INR 500 million for effecting B2B supplies.  However, the supplies under B2C category are not mandatory to be complied with E-invoicing mechanism. 

However, such threshold turnover limit is further proposed to be reduced to INR 200 million by Government of India w.e.f. 1 April 2022.   Therefore, any company which has achieved turnover in excess of INR 200 million during any preceding financial year from 2017-18 onwards would be required to undertake the compliance of E-invoicing.

In case such E-invoicing is not implemented by the companies with turnover above INR 200 millions, such invoices issued by the companies would not be recognised as valid tax invoice and the recipient will not be able to take Input Tax Credit of the GST charged by supplier.  Therefore, effective modification in ERP packages are required to be carried out to ensure that E-invoices are issued by the company which are mandatorily required to comply with E-invoicing mechanism.