Stricter Reporting Rules for e-Invoicing Under GST
India’s GST Council is introducing a significant change to its e-Invoicing regulations, effective April 1, 2025. The reporting threshold for submitting invoices to the Invoice Registration Portal (IRP) will be reduced to ₹10 lakh (approximately $11,860). Businesses exceeding this turnover must upload invoices to the GST portal within 30 days of issuance to remain compliant.
Non-compliance with this requirement will result in the loss of input tax credit (ITC) on those invoices, making it critical for businesses to adapt their processes ahead of the deadline.
Key Highlights of the New Regulation
- Lower Reporting Threshold
- The current threshold of ₹5 crore (approximately $592,941) will drop to ₹10 lakh, bringing many small and medium enterprises into the e-Invoicing net.
- The change aims to enhance compliance and improve tax administration for businesses of all sizes.
- Mandatory 30-Day Reporting
- Businesses must submit invoices to the IRP for validation and issuance of a unique identification code within 30 days of generating the invoice.
- Delays will result in businesses losing the ability to claim ITC, directly impacting cash flow and financial planning.
Background: India’s e-Invoicing Journey
Mandatory B2B e-Invoicing was first introduced in October 2020 with a reporting threshold of ₹5 crore. Under this system, businesses must:
- Upload invoices to the IRP for validation.
- Obtain a unique code before sending the invoice to the customer.
The upcoming changes represent the next phase in India’s efforts to tighten GST compliance and ensure that smaller businesses are brought into the fold.
Implications of the April 2025 Threshold Cut
- For Small Businesses
The reduction to ₹10 lakh means that many small businesses will need to adopt e-Invoicing for the first time. Investing in e-Invoicing software and training employees will be essential to meet compliance requirements.
- For Compliance Management
Businesses will need robust systems to ensure invoices are reported promptly. Delays could lead to significant financial consequences, including the inability to claim ITC.
- For the GST Ecosystem
The new rules will streamline tax administration, reduce evasion, and improve data transparency, further strengthening the efficiency of India’s GST framework.
Preparing for Compliance
Businesses are encouraged to take the following steps to prepare:
- Evaluate Current Turnover: Determine if your business falls within the new ₹10 lakh threshold.
- Implement e-Invoicing Solutions: Ensure you have the necessary tools to submit invoices to the IRP promptly.
- Train Your Team: Educate employees on the importance of timely reporting and familiarize them with e-Invoicing processes.
- Review ITC Policies: Develop strategies to avoid the risk of losing input tax credits due to reporting delays.
By acting now, businesses can mitigate the risk of non-compliance and seamlessly adapt to the upcoming changes.
