What Is the New E-invoice Limit by the GST Department?

E-invoice, also known as an electronic invoice, is a digital document that is used to record a commercial transaction. 

The invoices are sent and received electronically and eliminating the need for paper invoices. E-invoices are considered to be more efficient and secure than paper invoices, and they can save businesses time and money.

The National Informatics Centre states: “e-Invoice is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal. Under the electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP) to be managed by the GST Network (GSTN).”

Recently, the Goods and Services Tax department has made it mandatory for businesses with a turnover of 5 crore or more will be required to file e-invoice. This new rule is implemented from August 1, 2023. 

The notification from the GST website states: “G.S.R.....(E).- In exercise of the powers conferred by sub-rule (4) of rule 48 of the Central Goods and Services Tax Rules, 2017, the Government, on the recommendations of the Council, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 13/2020 – Central Tax, dated the 21st March, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 196(E), dated 21st March, 2020, namely:- In the said notification, in the first paragraph, with effect from the 1st day of August, 2023, for the words “ten crore rupees”, the words “five crore rupees” shall be substituted.”

The amount earlier was fixed at 10 crore rupees which went into effect on October 1, 2022. The latest change was announced on July 29 when the Central Board of Indirect Taxes and Customs tweeted about the new change. 

Attention GST Taxpayers whose Aggregate Annual Turnover exceeds ₹5 Crore in any of the preceding Financial Year, w.e.f. 01st August, 2023 generating e-Invoice will be mandatory for all B2B supply of Goods or Services or both, or for exports. pic.twitter.com/VzTi6s4JrY

— CBIC (@cbic_india) July 29, 2023

Which Businesses Are Exempted From E-invoicing?

According to ClearTax, these categories are exempted from filing for e-invoice: 

• “An insurer or a banking company or a financial institution, including an NBFC

•  A Goods Transport Agency (GTA)

• A registered person supplying passenger transportation services

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

• An SEZ unit (excluded via CBIC Notification No. 61/2020 – Central Tax)

• A government department and Local authority (excluded via CBIC Notification No. 23/2021 – Central Tax)

• Persons registered in terms of Rule 14 of CGST Rules (OIDAR)”