Government wishes to extend mandatory electronic invoicing to hundreds of thousands of small business to curb fraud
India’s Central Board of Indirect Taxes looks set to lower further on1 January 2023 the annual sales threshold for adoption of mandatory electronic invoicing to be submitted to the government GST portal. The threshold is based on sales in the financial years 2017-18 onwards.
This will bring in an estimated 650 thousand new businesses to the Indian e-invoicing system. That would still leave a further nine million business out-of-scope.
A reform of the revenue threshold will drop from ₹20 crore to ₹10 crore (approx. $1.3 million) on 1 October 2022 is already set. This will bring in over 250,000 Goods and Services Tax payers into the pre-clearance e-invoice system, Goods and Services Tax Network.
Part of the aim of the lowering of the threshold is to reduce fraud by only allowing reported e-invoices to be deductible for input tax credit (ITC). This lowering of the threshold also brings in all of the suppliers to larger customers to covering the entire supply chain in major commerce. The requirement for ITC has also been phased in since July 2017. From 1 January 2023, customers cannot claim any ITC for their qualifying suppliers if they have not submitted their sales invoice to the GST portal.
The Government has now indicated that from the start of 2023, it will to half again to threshold to ₹5 crore (approx $630,000 per annum). This would only apply to business-to-business transactions. This is the sixth cut in the threshold since Indian e-invoicing was phased in from October 2020. India operates a Continuous Transaction Controls of government pre-clearance electronic invoicing.
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Asia Pacific e-invoicing
|Country||Date||Comments (click for details)|
|Australia||Jul 2023||PEPPOL-based e-invoicing with no govt intervention B2B|
|China||Jan 2023||Special e-fapiao VAT invoice being piloted with 2023 full implementation|
|India||Oct 2020||B2B pre-clearance with separate B2C; completed Apr 2021|
|Indonesia||Jul 2015||e-Factur Pajak electronic invoicing|
|Japan||Oct 2023||Tax qualified invoices|
|Kazakhstan||Jan 2017||e-invoicing IS ESF|
|New Zealand||Mar 2022||B2G PEPPOL-based e-invoicing|
|Philippines||Jul 2022||2022 pilot of e-invoices; to follow South Korea model|
|South Korea||2011||Near real-time invoice reporting|
|Taiwan||2017||Electronic GUI invoices; non-residents since 2020|
|Thailand||2018||E-invoice reporting where adopted|
|Vietnam||Nov 2021||Pre-clearance B2B verification code e-invoice|