The Central Board of Indirect Taxes and Customs (CBIC) has made GST e-invoicing mandatory for businesses for B2B transactions with over ₹50 crore turnover from April 1 2021 .
CBIC said in a notification, GST e-invoicing will be extended to businesses with over Rs 50 crore from April 1 to generate e-invoices for B2B transactions.
E-invoicing entails validation of transaction details in a centralised government portal and would make the returns filing process simpler.
E-invoicing system was first implemented for entities having a turnover above ₹500 crore in October. In this system, taxpayers have to generate invoices on their accounting software, ERP, or billing software. Taxpayer have to report them online to the Invoice Registration Portal (IRP).
GSTN claims that there is not much difference between the present e-invoices system and new e-invoices one. Businesses continue to create GST e-invoices on their own accounting software.
The Invoice Registration Portal (IRP) will validate the information and return the digitally signed e-invoices to the taxpayer with a QR Code along with a unique ‘Invoice Reference Number (IRN).
Under Goods and Services Tax (GST) law, e-invoicing has been made mandatory for business-to-business (B2B) transactions with turnover of over ₹500 crore and ₹100 crore from October 1, 2020, and January 1, 2021, respectively.
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The Finance Ministry hopes that this system will help in enhancing ease of doing business.