For business to companies (B2C) dealings, the government has made it mandatory for companies with an annual turnover of at least Rs. 100 crore to follow e-invoicing effective from January 2021. The notification has been released for the same by the central Government.  E-invoicing uptake has seen immense progress with over 69.5 lakh Invoice Reference Numbers generated between October 1 to 7, senior officials said.

In the current system, e-invoicing is mandatory for companies with an annual turnover of at least Rs. 500 crore. The mandate was to be followed from October but the centre has withheld any penalty implication on defaulting companies for at least a month. As per rule, companies need to raise e-invoices via a unique invoice reference portal and generate the IRN or invoice reference number. And failure to do so will prevent such companies from moving goods for business to business (B2B) dealings.

From April 2021, the government plans to launch e-invoicing for all companies. Abhishek Jain, tax partner at EY said “Aligned to the recent communications by various government officials, e-invoicing has now been notified for companies with a turnover of Rs 100 crore and above companies as well. With only 50 more days to go, these mid-size companies would need to immediately initiate their processes and IT systems to enable compliance with this new invoicing regulation”

The government expects e-invoicing to have other major benefits of improving the payment cycle for the industry and give a boost to invoice based lending to MSMEs.

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