E-invoicing is shortly and more popularly known as e-invoice under GST. E-invoice is basically a system through which normally generated invoices are electronically authenticated by GSTN.
Mistakenly it is understood that e-invoice means the generation of invoice via GST portal. However, correctly, the same means submitting/ uploading of ERP/ accounting software generated invoice into Invoice Registration Portal (IRP) for electronic authentication.
The present article tries to clear the basics of e-invoice; covers various stages of implementation of e-invoice and briefly explains the applicability of the same under GST.
Basics of e-invoice are highlighted hereunder-
GST council, for the very first time, recommended the implementation of e-invoicing under GST during the 35th GST Council meeting held on 21st June 2019. Hierarchy of implementation of e-invoice is tabulated hereunder-
|Notification No. and date||Particulars of the notification|
|Notification 68/2019- Central Tax dated 13th December 2019||Amendments in provisions rule 48 (manner of issuing invoice) under Central Goods and Services Tax Rules, 2017 to incorporate e-invoicing.|
|Notification 69/2019- Central Tax dated 13th December 2019||Introduction of a set of common e-invoicing portal.|
|Notification 70/2019- Central Tax dated 13th December 2019||
|Notification 13/2020- Central Tax dated 21st March 2020||
1. A banking company,
2. A non-banking financial company,
3. A financial institution,
4. An insurer,
5. A person engaged in supplying passenger transportation service,
6. A goods transport agency (GTA) supplying services,
7. A person engaged in supplying services in terms of admission of the exhibition of cinematograph films in the multiplex screen.
|Notification 61/2020- Central Tax dated 30th July 2020||
In nut-shell, e-invoicing is made mandatory in B2B transactions for registered person having an aggregate turnover of more than INR 500 Crores (earlier it was notified as INR 100 Crores) in a financial year.
|Notification 88/2020- Central Tax dated 10th November 2020||
|Notification 05/2021- Central Tax dated 8th March 2021||
Stage-wise applicability of e-invoice under GST based on aggregate turnover is explained hereunder-
|Effective date from which e-invoice became mandatory||Category of persons|
|1st October 2020||The person having an aggregate turnover of more than INR 500 Crores in a Financial year.|
|1st January 2021||The person having an aggregate turnover of more than INR 100 Crores in a Financial year.|
|1st April 2021||The person having an aggregate turnover of more than INR 50 Crores in a Financial year.|
However, e-invoice doesn’t apply to the following category of persons irrespective of their turnover-
1. Special Economic Zone units,
2. An insurer,
3. An NBFC,
4. A Goods Transport Agency,
5. A banking company,
6. A financial institution,
7. A person supplying passenger transportation services,
8. A person supplying services of admission to the exhibition of the cinematographic films in multiplex services.
Additionally, e-invoicing doesn’t apply to any person having an aggregate turnover of less than INR 100 Crores (INR 50 Crores from 1st April 2021) in a financial year.
Further, e-invoicing doesn’t apply in B2C transactions (i.e. supply of goods or services or both to an unregistered person).