At present, issuing electronic invoices is mandatory for businesses with turnover of Rs 100 crore and more, which has been put into effect from January 1, 2021, while for companies having turnover of Rs 500 crore plus was made effective from October 1, 2020.
The government was supposed to put the threshold at Rs 5 crore from April 1, 2021 but has kept a milder threshold.
“Higher threshold of Rs 50 crore for e-invoicing is a better decision for SME and MSME organisations as it would help them thrive and grow without any change in business processes,” said Rajat Mohan, senior partner at AMRG Associates.
E-invoicing replaces the physical invoice and will soon replace the existing e-way bill system, and taxpayers will not have to generate separate e-way bills. The government expects e-invoicing to have also other major advantages, such as improving the payment cycle for industry and giving boost to invoice-based lending to MSMEs.
Last month, the board had exempted nonbanking financial companies, insurance companies, banks and financial institutions, and exports from using dynamic quick response or QR codes on e- invoices issued to consumers. Exports have been exempted from the QR code requirement since such shipments are treated as business-to-business supplies.
The board had notified mandatory use of dynamic QR codes on such invoices issued by companies with an aggregate turnover of more than Rs 500 crore in March last year. In November, it had waived the penalty on non-implementation of QR codes till March 31, 2021, on the condition that companies will start complying with the requirement from April 1, 2021.