“Unveiling the intricacies of E-Invoicing starting August 1, 2023! Explore the rules, applicability, and advantages of E-Invoicing in GST. Learn who needs to comply, the turnover thresholds, and the consequences of non-issuance. Stay ahead to streamline your business processes.
As per Rule 48(4) of CGST Rules, notified class of registered persons have to prepare invoice by uploading specified particulars of Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN). After Following a ‘e-invoicing’ process, the invoice copy containing the IRN with QR code issued by the notified supplier to buyer is commonly referred to as a ‘E-invoice’ in GST.
Because of the standard e-invoice schema (INV-01), ‘e-invoicing’ facilitates exchange of the invoice document (structured invoice data) between a supplier and a buyer in an integrated electronic format.
♦ Point to be noted:-
- It is very important to note that E Invoice once made cannot be amended, but you can cancel e invoice within 24 hours of its generation and data of e invoice is transferred to your GSTR-1 also.
♦ Who is required to make e-invoiced:
Every Registered Person whose aggregate turnover (Taxable Supply + Exempt Supply +Export) based on PAN in any preceding financial year from 2017-18 onwards, is more than prescribed limit (Rs. 5 crore or more from 1st August 2023) e-invoicing is mandatory.
| Turnover Limit for E invoice (in Crores) | Date from when applicable |
| 500 | 1 October 2020 |
| 100 | 1 January 2021 |
| 50 | 1 April 2021 |
| 20 | 1 April 2022 |
| 10 | 1 October 2022 |
| 5 | 1 August 2023 |
It is important to note that each year starting form 2017-18 to check, and if any of the financial year aggregate turnover exceeds the limit of Rs.5 Crore then e invoice is mandatory from the 1 August 2023.
For Example:
| Financial Year | Turnover (in crores) |
| 2017-18 | 4 |
| 2018-19 | 2.75 |
| 2019-20 | 4.85 |
| 2020-21 | 6.15 |
| 2021-22 | 3.85 |
| 2022-23 | 4.15 |
In above situation e invoice is mandatory from 1 August 2023 as aggregate turnover is exceeded from 5 crore in year F.Y.2020-21.
Let us clear one thing:-
If any registered person t/o limit of 5 cr. Exceeds in F.Y. 2023-24 only then need to make E-invoice from 1st April 2024 not from 1st August 2023.
♦ What are the advantages of e -invoice for businesses?
E-invoice has many advantages for businesses such as Auto-reporting of invoices into GST return, auto-generation of e-way bill (where required).
E-invoicing will also facilitate standardization and inter-operability leading to reduction of disputes among transacting parties, improve payment cycles, reduction of processing costs and thereby greatly improving overall business efficiency.
♦ What types of documents are presently covered under e -invoicing?
Invoices
Credit Notes
Debit Notes,
♦ Which supplies are presently covered under e -invoice?
1. Supplies to registered persons (B2B),
2. Supplies to SEZs (with/without payment),
3. Exports (with/without payment of IGST),
4. Deemed Exports, by notified class of taxpayers are currently covered under e-invoice.
5. Supply to B2G
6. If the invoice issued by notified person is in respect of supplies made by him but attracting reverse charge under Section 9(3).
Recently Government Clarified that E-invoice is mandatory if supply is made 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 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, and it is mandatory to make e invoice in this case also.
♦ Which entities/sectors are presently out of the applicability of E-Invoicing?
1. SEZ Units Not SEZ Developers (i.e. they have to generate E-Invoice if criteria satisfied)
2. Insurers
3. Banking companies or financial institutions, including a non-banking financial company (NBFC)
4. Goods Transport Agency (GTA) supplying services in relation to transportation of goods by road in a goods carriage
5. Suppliers of passenger transportation service
6. Suppliers of services by way of admission to exhibition of cinematograph films in multiplex screens
7. Suppliers of services by way of admission to exhibition of cinematograph films in multiplex screens
8. OIDAR Services
♦ Consequences for non-issuance of E-Invoice:
If any Taxpayer is liable to make E-Invoice, but not issued E-invoice it will not be considered a valid tax invoice.
Penalty (If E-invoice not issued): A penalty of 100% of the tax due or Rs.10000 whichever is higher will be imposed for non-compliance.
Penalty (Incorrect Invoice): a penalty of Rs.25000 will be imposed.
Author Bio
do we have to include int income in the agg turnover for purpose of arriving at the threshold limit of e invoicing
Yes, while calculating aggregate turnover limit need to add interest income in turnover but GST is not attracted on such income.
Jay, first attempt Keep it up excellent article.
Thank you Hemant sir for your appreciation.