10 Things to remember for E-Invoicing under GST

Arjuna (Fictional Character): Krishna, From 1^st August 2023 Government has made E-invoicing mandatory for medium business.

Krishna (Fictional Character): Arjuna, E-invoicing is now mandatory w.e.f 01/08/2023 for all the suppliers, whose aggregate turnover in any of the previous FY starting from 2017-18 exceeds 5 crore. And if the taxpayers whose aggregate turnover exceeds 5 crore in current FY then for them E-invoicing will be applicable from next Financial year.

Arjuna (Fictional Character): Krishna, which are the 10 things that one should remember for E-invoicing?

Krishna (Fictional Character): Arjuna, Following are the 10 things that the suppliers must consider while doing E-invoicing.

1. E-Invoice Registration: Every supplier who meets the turnover limit has to compulsorily take Registration for E-invoicing on gst.gov.in.

2. Three most important and unique features of E-invoicing: Invoice Reference number (IRN), QR Code, and the presence of Digital Signature in place of Physical signature.

3. E-Invoicing is mandatory for supply of all the taxable goods and Services and also for supplies made under RCM. E-Invoicing is applicable for all Taxable supply and it’s Invoices, Debit Notes and Credit Notes.

4. It is Not applicable to Exempt, Nil rated and Non Taxable supplies and SEZ supplies but turnover of such supplies shall be considered for determination of E-invoicing applicability.

5. B2C Transactions: The Suppliers are not mandatorily required to generate E-invoices for all their B2C transactions.

6. Taxable Value, Tax Rate, HSN Code should be entered properly while uploading E-Invoicing.

7. Generation of E–Invoice: E-invoices can be generated directly through accounting software or through utility.

8. Cancellation of E-Invoice: A E-Invoice can be cancelled only within 7 Days. If the taxpayer needs to cancelled the invoice after 7 days then the same can be done only through issuing credit note.

Amendments of E-Invoices: No such amendments can be done in  E-invoices. Any changes to be done in the invoice details the same can be directly done through GST Portal while filing GSTR -1 of that month.

9. Uploading of E-Invoices: There is no such defined time limit for generation of E-invoices but taxpayers with annual Aggregate turnover of More than 100 crore must generate E-invoice within 7 days of Invoice date.

10. Penalty: If Invoice is not issued then the penalty will be Rs. 10,000 or 100% of Tax whichever is higher. But if E-Invoice is not generated but Invoice is provided then there is no such specific penalty, but general penalty will be Rs. 25,000/-.

Arjuna (Fictional Character): Krishna, what should one learn from this?

Krishna (Fictional Character): Arjuna, Government has reduced the turnover limit for generation of E-Invoices from 500 crore to 5 crore and later on in coming years the government will make it compulsory for all. Also now, it will become Day to day planning activity for all taxpayers and now they must go hand in hand with technology. E-Invoicing will be matched with GSTR-1 which will help in GSTR-3B.  E-invoicing helps in automating the return filing process and also helps suppliers in maintaining digital records and accuracy in data entry. It integrates accounting and other financial software’s  which allows taxpayers to manage their entire financial records more easily. Its real time processing helps to create transparency between taxpayer and tax authorities.