E-Invoicing for turnover exceeding 10 Crore rupees w.e.f. 1/10/2022

Arjuna (Fictional Character): Krishna, what is the CGST Notification brought by CBIC for E-invoicing under The CGST Act, 2017?

Krishna (Fictional Character): Arjuna, CBIC issued Circular No. 17/2022-GST on 1st Aug,2022 specifying mandatory E-invoicing from October 1, 2022 for businesses whose aggregate turnover exceeds Rs 10 crore in any financial year from 2017-18 to 2021-22 , for business-to-business (B2B) supply of goods or services, or both and also for exports. Also, If the turnover in the last FY was below the threshold limit but it increased beyond the threshold limit in the current year, then e-Invoicing would apply from the beginning of the next financial year.

Arjuna (Fictional Character): Krishna, What is e-invoice generation under GST?

Krishna (Fictional Character): Arjuna, The e-invoice system is for GST registered persons to upload all B2B invoices to the Invoice Registration Portal (IRP). The IRP generates and returns a unique Invoice Reference Number (IRN), digitally signed e-invoice, and QR code to the user.After following the e-invoicing process, the invoice copy (with QR Code containing inter alia, IRN) issued by the notified supplier to the buyer is commonly referred to as the ‘e-invoice’.

Arjuna (Fictional Character): Krishna, What is aggregate turnover for limit calculation?

Krishna (Fictional Character): Arjuna, Aggregate Turnover can be calculated as Value of all (taxable supplies+Exempt supplies+Exports+Inter-state supplies) – (Taxes+Value of inward supplies+Value of supplies taxable under reverse charge + Value of non-taxable supplies) of a person having the same PAN (Permanent Account Number) across all his business entities in India.

Arjuna (Fictional Character): Krishna, Is there any exemption for E-invoicing?

Krishna (Fictional Character): Arjuna, Following categories of registered persons have been exempted from generating e-invoices irrespective of turnover limits or where its not mandatory:

1) Exempted goods & services

2) Insurer or banking company, including non-bank finance companies, a goods transport agency and a registered person supplying passenger transportation services.

3) A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services.

4) An SEZ unit, government departments and local authorities

5) Further, there are specified persons/ transactions of which E-Invoice is not mandatory

Arjuna (Fictional Character): Krishna, Whether E-invoice can be cancelled and what is the penalty for non generation of E-Invoice?

Krishna (Fictional Character): Arjuna, an e-invoice can be cancelled on the IRP only within 24 hours.Further, the whole of the invoice would have to be cancelled since partial cancellation is not possible.Amendment and cancellation of e-invoices are allowed on the GST portal as per the provisions of GST law i.e., while reporting in Form GSTR-1.Penalty for non-generation of e invoice – 100% of the tax due or Rs.10,000, whichever is higher, for every invoice and Penalty for incorrect invoicing – Rs.25,000 per invoice may be levied.Apart from the penalty for e invoice- the consequences of non generating IRN are Goods in transit can be detained, Holding up invoice payments/ITC claims may be denied to GST registered buyers, Affects e-way bill generation and causes delays.

Arjuna (Fictional Character): Krishna, what lesson we should take from this?

Krishna (Fictional Character): Arjuna, The move to reduce the turnover threshold and increase the ambit of e-invoicing is mainly aimed at resolving mismatch errors and checking tax evasion. The reduction of the e-invoicing threshold will further expand the GST tax base and provide more data to tax authorities, enabling better compliance.