Clarification regarding carrying physical copy of invoice during movement of goods in case of e-invoice

[Ref:Circular No. 160/16/2021-GST, dated 20th September, 2021]

In exercise of its powers conferred by Section 168(1) of the Central Goods and Services Tax Act, 2017 ( CGST Act), CBIC has clarified, vide Circular No. 160/16/2021-GST, dated 20th September, 2021 in respect of carrying a physical copy of invoice during movement of goods in cases where invoice has been generated by the supplier in the manner prescribed under Rule 48(4) of CGST Rules.

Regarding clarification, various representations have been received by the Department from taxpayers and other stakeholders seeking clarification “Whether carrying physical copy of invoice is compulsory during movement of goods in cases where suppliers have issued invoices in the manner prescribed under Rule 48 (4) of the CGST Rules, 2017 (i.e. in cases of e-invoice).”

We would like to submit that Rule 48(4) of CGST Rules is concern with electronic invoices (‘e-invoice’). The GST Council, in its 35th meeting held on 21^st June, 2019, has recommended the introduction of e-invoice in GST in a phased manner on a voluntary basis for online generation of B2B e-invoices from January 2020. In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (CGST Act), the Central Government on 13^th December, 2019 vide Notification No. 68/2019-Central Tax dated 13.10.20219, has further amended the Central Goods and Services Tax Rules, 2017 as Central Goods and Services Tax (Eighth Amendment) Rules, 2019. By the said amendment sub-rule (4), (5) and (6) were inserted in Rule 48 of CGST Rules which may be read as under –

“(4) The Invoice shall be prepared by such class of registered persons as may be notified by the Government, on the recommendations of the Council by including such particulars contained in FORM GST INV-01 after obtaining an Invoice Reference Number by uploading information contained therein on the Common Goods and Service Tax Electronic Portal in such manner and subject to such conditions and restrictions as may be specified in the notification.

(5) Every invoice issued by a person to whom sub-rule (4) applies in any manner other than the manner specified in the said sub-rule shall not be treated as an invoice.

(6) The provisions of sub-rules (1) and (2) shall not apply to an invoice prepared in the manner specified in sub-rule (4).”

Further, in exercise of the powers conferred by section 146 of the Central Goods and Services Tax Act, 2017 read with sub-rule (4) of rule 48 of the Central Goods and Services Tax Rules, 2017 and section 20 of the Integrated Goods and Services Tax Act, 2017, the Central Government on 13^th December, 2019 vide Notification No. 69/2019-Central Tax , on the recommendations of the Council, had notified some Common Goods and Services Tax Electronic Portal for the purpose of preparation of the invoice in terms of sub-rule(4) of Rule 48. Vide Notification No. 69/2019-Central Tax dated 13.12.2019, ten portals were notified for the purpose of preparation of the invoice in terms of Rule 48(4).

 Initially, it was decided vide Notification No. 70/2019 -Central Tax, dated 13^th December, 2019, to introduce e-invoicing mandatorily for all taxpayers with annual aggregate turnover above ₹100 crores from April 1, 2020. However, the sudden onset of COVID-19 pandemic delayed the implementation, and the dates were extended to 1st October 2020. Traders will have to prepare/generate invoice manually/ in own system and upload the same on designated portal (10 portal notified as above) Invoice Registration Portal (“IRP”), which inter-alia will generate Invoice Reference Number (“IRN”) and Quick Response Code (“QR Code”). For more detail, please see article in respect of e-invoice separately.

Clarification: –

 It is clarified that there is no need to carry the physical copy of tax invoice in cases where invoice has been generated by the supplier in the manner prescribed under Rule 48(4) of the CGST Rules and production of the Quick Response (QR) code having an embedded Invoice Reference Number (IRN) electronically.

Rule 138A (1) of the CGST Rules, inter-alia, provides that the person in charge of a conveyance shall carry-

(a) the invoice or bill of supply or delivery challan, as the case may be; and

(b) a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the Commissioner.

Further, Rule 138A (2) of CGST Rules, after being amended vide Notification No. 72/2020-Central Tax dated 30.09.2020, states that “In case, invoice is issued in the manner prescribed under sub-rule (4) of Rule 48, the Quick Reference (QR) code having an embedded Invoice Reference Number (IRN) in it, may be produced electronically, for verification by the proper officer in lieu of the physical copy of such tax invoice”.

 A conjoint reading of Rules 138A (1) and 138A (2) of CGST Rules, clearly indicates that there is no requirement to carry the physical copy of tax invoice in cases where e-invoice has been generated by the supplier. After amendment, the revised Rule 138A (2) states in unambiguous words that whenever e-invoice has been generated, the Quick Reference (QR) code, having an embedded Invoice Reference Number (IRN) in it, may be produced electronically for verification by the proper officer in lieu of the physical copy of such tax invoice.

Accordingly, it is clarified that there is no need to carry the physical copy of tax invoice in cases where invoice has been generated by the supplier in the manner prescribed under rule 48(4) of the CGST Rules and production of the Quick Response (QR) code having an embedded Invoice Reference Number (IRN) electronically, for verification by the proper officer, would suffice.

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