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Circular No. 198/10/2023-GST issued by the Central Board of Indirect Taxes & Customs (CBIC) addresses the issue regarding the applicability of e-invoice under rule 48(4) of the Central Goods and Services Tax (CGST) Rules, 2017 for supplies made to Government Departments, establishments, agencies, local authorities, and PSUs registered for tax deduction at source. The circular provides clarity on whether e-invoicing is required for such transactions and emphasizes compliance with the relevant provisions.

The circular clarifies that Government Departments, establishments, agencies, local authorities, and PSUs registered solely for the purpose of tax deduction at source under Section 51 of the CGST Act are considered registered persons under the GST law. As a result, registered persons whose turnover exceeds the prescribed threshold for e-invoicing must issue e-invoices for supplies made to these entities. The clarification ensures uniformity in implementing e-invoicing requirements for transactions with Government Departments and related entities.

CBIC’s circular aims to provide clarity on the applicability of e-invoice under rule 48(4) of the CGST Rules for supplies made to Government Departments, establishments, agencies, local authorities, and PSUs registered for tax deduction at source. It confirms that such registered persons, whose turnover exceeds the prescribed threshold, must issue e-invoices for these transactions. Suitable trade notices should be issued to disseminate the contents of this circular, and any implementation difficulties should be brought to the attention of the Board.

F. No. CBIC-20001/5/2023-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing, New Delhi
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Circular No. 198/10/2023-GST, Dated: 17th July, 2023

To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/ Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)

Madam/Sir,

Subject: Clarification on issue pertaining to e-invoice.

Representations have been received seeking clarification with respect to applicability of e-invoice under rule 48(4) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as “CGST Rules”) w.r.t supplies made by a registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing, to Government Departments or establishments/ Government agencies/ local authorities/ PSUs registered solely for the purpose of deduction of tax at source as per provisions of section 51 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”).

2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the CGST Act, hereby clarifies the issue as under:

S. No.

Issue Clarification
1. Whether e-invoicing is applicable for supplies made by a registered person, whose turnover exceeds the prescribed threshold for generation of e- invoicing, to Government Departments establishments/ Government agencies/ local authorities/ PSUs which are registered solely for the purpose of deduction of tax at source as per provisions of section 51 of the CGST Act? Government Departments or establishments/ Government agencies/ local authorities/ PSUs, which are required to deduct tax at source as per provisions of section 51 of the CGST/SGST Act, are liable for compulsory registration in accordance with section 24(vi) of the CGST Act.

Therefore, Government Departments or establishments/ Government agencies/ local authorities/ PSUs, registered solely for the purpose of deduction of tax at source as per provisions of section 51 of the CGST Act, are to be treated as registered persons under the GST law as per provisions of clause (94) of section 2 of CGST Act. Accordingly, the registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing, is required to issue e-invoices for the supplies made to such Government Departments or establishments/ Government agencies/ local authorities/ PSUs, etc under rule 48(4) of CGST Rules.

3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would follow.

(Sanjay Mangal)

Principal Commissioner (GST)

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