Notification No. 05/2021 – Central Tax on E-Invoicing

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Notification No. 05/2021 – Central Tax: Seeks to implement e-invoicing for the taxpayers having aggregate turnover exceeding Rs. 50 Cr from 01st April 2021.

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]

G.S.R (E).– In exercise of the powers conferred by sub-rule (4) of rule 48 of the Central Goods and Services Tax Rules, 2017, the Government, on the recommendations of the Council, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 13/2020 – Central Tax, dated the 21^st March, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 196(E), dated 21^st March, 2020, namely:-

In the said notification, in the first paragraph, with effect from the 1^st day of April, 2021, for the words “one hundred crore rupees”, the words “fifty crore rupees” shall be substituted.

(Pramod Kumar)
Director,
Government of India

Note: The principal notification No. 13/2020 – Central Tax, dated the 21^st March, 2020 was published in the Gazette of India, Extraordinary, vide number G.S.R. 196(E), dated 21st March, 2020 and was last amended vide notification No. 88/2020-Central Tax, dated the 10^th November, 2020, published vide number G.S.R. 704(E), dated the 10^th November, 2020.

📚 Frequently Asked Questions (FAQs): Notification No. 05/2021 – Central Tax

Q1: What is Notification No. 05/2021 – Central Tax all about?

Answer:
This notification, issued on 8th March 2021, amends Notification No. 13/2020 – Central Tax. It mandates e-invoicing under GST for taxpayers having an aggregate turnover exceeding ₹50 crore, effective from 1st April 2021notfctn-05-central-tax-english-….

Q2: What was the turnover threshold for e-invoicing before this notification?

Answer:
Before Notification No. 05/2021, e-invoicing was applicable to taxpayers with turnover exceeding ₹100 crore. This amendment reduces the threshold to ₹50 crore, thereby covering a larger set of businesses.

Q3: From when is the new threshold of ₹50 crore applicable?

Answer:
The new threshold of ₹50 crore aggregate turnover is applicable from 1st April 2021. Businesses meeting this turnover condition must comply with the e-invoicing provisions without delay.

Q4: Which businesses are affected by this change?

Answer:
Companies with turnover above ₹50 crore in any financial year since 2017–18.
Mainly medium-sized businesses that previously fell outside the ₹100 crore threshold.
Government departments and certain notified entities are exempt.

Q5: What is the main purpose of lowering the threshold?

Answer:
The government aims to:
✅ Expand e-invoicing coverage to curb tax evasion.
✅ Enhance transparency in B2B transactions.
✅ Improve efficiency in GST return filing and compliance tracking.
✅ Integrate with the overall Digital India program for tax automation.

Q6: What are the benefits of e-invoicing for businesses?

Answer:
Auto-population of data in GSTR-1 & GSTR-3B.
Reduced errors in GST returns.
Easier Input Tax Credit (ITC) claims.
Faster reconciliations with customers and suppliers.
Improved compliance rating under GST.

Q7: What penalties apply for non-compliance?

Answer:
Businesses required to issue e-invoices but failing to comply may face:
❌ Invalid invoices (not considered legal for GST).
❌ Penalties under Section 122 of CGST Act.
❌ Possible denial of ITC for buyers.
👉 To avoid penalties, consider professional GST compliance services.

Q8: How can businesses check whether e-invoicing applies to them?

Answer:
Calculate aggregate turnover (including all GSTINs under a PAN across India).
Verify if turnover exceeded ₹50 crore in any year from 2017-18 onwards.
Check if your business falls under any exemptions (like banks, insurance, NBFCs, government entities).

Q9: How can Finodha help with e-invoicing compliance?

Answer:
Finodha provides end-to-end support, including:
GST Registration
GST Return Filing
GST Compliance
Expert guidance from certified GST professionals
This ensures smooth transition to e-invoicing and avoids compliance risks.

Q10: What are the related notifications to be aware of?

Answer:
Notification No. 13/2020 – Central Tax: Introduced e-invoicing initially (₹500 Cr turnover).
Notification No. 88/2020 – Central Tax: Reduced threshold to ₹100 Cr.
Notification No. 05/2021 – Central Tax: Further reduced to ₹50 Cr.

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