by The government of India has announced that it will be lowering the e-invoicing threshold to Rs 5 crore from the current level of Rs 10 crore. The new threshold will come into effect from August 1, 2023.
E-invoicing is a system of generating and transmitting invoices electronically. It was introduced by the government in 2017 as a way to improve tax compliance and reduce fraud. The system requires businesses with a turnover of Rs 500 crore or more to generate e-invoices for all their business-to-business (B2B) transactions.
The government has said that the decision to lower the e-invoicing threshold is aimed at increasing compliance among smaller businesses. It is estimated that there are over 1 million businesses in India with a turnover of Rs 5 crore or more. These businesses will now be required to generate e-invoices for all their B2B transactions.
The government has also said that the move will help to reduce fraud in the B2B trade. E-invoices are more secure than paper invoices and they are easier to track. This will make it more difficult for businesses to evade taxes or engage in other fraudulent activities.
The decision to lower the e-invoicing threshold has been welcomed by businesses and industry associations. They have said that the move will help to improve compliance and transparency in the B2B trade. They have also said that the move will help to reduce the cost of doing business for smaller businesses.
The government’s decision to lower the e-invoicing threshold is a significant step towards improving tax compliance and reducing fraud in the B2B trade. It is expected to have a positive impact on the Indian economy.
Here are some of the key benefits of the government’s decision to lower the e-invoicing threshold:
- Increased compliance: The move is expected to increase compliance among smaller businesses, as they will now be required to generate e-invoices for all their B2B transactions. This will help to ensure that all businesses are paying their fair share of taxes.
- Reduced fraud: E-invoices are more secure than paper invoices and they are easier to track. This will make it more difficult for businesses to evade taxes or engage in other fraudulent activities.
- Improved transparency: The move will help to improve transparency in the B2B trade. This will make it easier for businesses to track their transactions and ensure that they are getting the best possible prices.
- Reduced costs: The move is expected to reduce the cost of doing business for smaller businesses. This is because they will no longer have to print and store paper invoices.
Overall, the government’s decision to lower the e-invoicing threshold is a positive step. It is expected to have a number of benefits for businesses and the Indian economy as a whole.
