CBIC lowers threshold for e-invoices

CBIC threshold e-invoices

The Central Board of Indirect Taxes and Customs (CBIC) has announced a significant reduction in the aggregate turnover threshold for e-invoices in a bid to broaden the tax base and promote digital tax compliance.

The applicability threshold has been revised from INR100 million (USD1.2 million) to INR50 million, effective from 1 August 2023.

The move aims to include more businesses under the ambit of e-invoicing, an initiative that seeks to replace physical invoices with electronic ones and eventually eliminate the need for the e-way bill system. By lowering the threshold, the CBIC intends to enhance tax compliance and simplify the invoicing process for a larger number of taxpayers.

The CBIC has previously issued several notifications regarding the requirements, exclusions, exemptions and deadline extensions related to e-invoicing. This latest reduction in the turnover limit is part of ongoing efforts to streamline the Goods and Services Tax (GST) regime and encourage businesses to adopt digital invoicing practices.

Under the revised threshold, businesses with an annual turnover above INR50 million will be mandated to issue e-invoices for their business-to-business transactions. This move aligns with the CBIC’s objective of gradually expanding the scope of e-invoicing to cover a wider range of taxpayers and sectors.

Additionally, the CBIC has excluded certain entities from the e-invoicing requirements, such as government departments, local authorities, insurance companies, banking companies including NBFCs, financial institutions, goods/passenger transporters, cinema halls/multiplexes and SEZ units.