Applicability of E-invoicing under GST

Introduction of E-invoicing?

In its 35th meeting, the GST Council decided to implement a system of e-Invoicing, covering specific categories of persons, mostly large enterprises. Later on, it has been expanded to cover mid-sized businesses and small businesses as well.

What is E-invoicing?

‘e-Invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices and a few other documents are authenticated electronically by GSTN for further use on the common GST portal.

♦ The taxpayers must comply with the provisions of e-invoicing from the beginning of financial year 2022-23 and onwards if their aggregate turnover exceeds the specified limit in preceding financial year. Now the question arises that, how to calculate Aggregate turnover and what are the specified limits?

Aggregate Turnover:

♦ The Indian government has implemented the e-Invoicing system in a phased manner and these phases are categorized on the basis of Aggregate T.O.

• The first phase of e-Invoicing began on 1^st October 2020 for all the large enterprises with a turnover above Rs.500 crore (Notification No. 61/2020 – Central Tax)
• After that, the second phase extended to those with a turnover of Rs.100 crores from 1^st January 2021 (Notification No. 88/2020 – Central Tax)

• Further, in the third phase it was extended to those with a turnover of Rs. 50 crores from 1st April 2021 (Notification No. 05/2021 – Central Tax)

• Now, in 2022 the government has decide to cover small and medium business also and notify that the provisions of E-invoicing also applicable to those with turnover of 20 crores and 10 crores from 1^st April 2022 and 1^st October 2022 respectively. (Notification No.01/2022 –Central Tax & Notification No.17/2022 –Central Tax)

♦ Crux: Business with turnover 10 crores or more in FY 2021-22 must comply with the provisions of E-invoicing from 1st October 2022.