Time to be e-invoicing ready- CBIC announces new mandate for e-invoicing for companies above 20 Cr turnover

Summary:

• A recent notification by CBIC requires businesses with a turnover of 20 Cr and more to implement e-invoicing for B2B transactions with effect from 1st April 2022.
• Earlier it was mandatory for businesses with a turnover of 50 Cr and more.
• This change is estimated to affect over one lakh businesses in India, meaning that many organisations will struggle to have systems that will help them comply, especially at the time of the year closing rush.
• The best way to comply with such short notice changes is with digital automation.

On 24th February 2022, CBIC amended one of its earlier notifications with another notification (Notification No. 01/2022 – Central Tax). It says that this new notification substitutes the words "fifty crore rupees" with the phrase "twenty crore rupees", which will come into effect from 01st April 2022.

According to this change, businesses with a turnover of 20 Cr and more will have to implement e-invoicing for all the B2B transactions.

E-invoicing in India first started in October 2020, and it has been executed in three phases so far.

The three phases are as follows.

• Phase 1: From 01st October 2020, CBIC announced e-invoicing as mandatory for all Business-to-Business (B2B) transactions in companies with a turnover of INR 500 crore or more.
• Phase 2: From 01st January 2021, CBIC declared that every registered entity with an aggregated turnover of over INR 100 crore in a year must adhere to the e-invoicing mandate for all B2B sales.
• Phase 3: Starting from 01st April 2021, e-Invoicing was mandatory for all registered B2B businesses with an annual turnover of over INR 50 crores.

The whole idea of e-invoicing is bringing down the GST gap, reducing errors and GST loss and ensuring the entire chain comes under its gambit.

There still might be time for bringing the B2C under the mandatory e-invoicing fold. But the announcement of Phase 4 has created a need for over 1 lakh businesses to implement e-invoicing before the short deadline. And unfortunately, it also comes at the time of the financial year closing. Is your business ready to comply?

 A software solution is a great idea, now more than ever, because you can save time and costs and get ahead with tax compliance without having to worry about errors and miscalculations as AI takes care of for you. Our software solution will plug into your ERP systems within seconds and help you manage your e-invoicing requirements efficiently. Let us take care of tax compliance for you so that you can focus on your other business needs. To know how Avalara can help you in getting e-invoice ready, get in touch with us. Meet your 1st April 22 deadline with Avalara. Request a call back now.