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 under GST

Basics of e-invoice are highlighted hereunder-

  • E-invoice is a process through which a normally generated invoice is authenticated by GSTN. Post authentication, each invoice will be issued an IRN (i.e., Invoice Reference Number).
  • E-invoice is applicable only to B2B transactions (i.e. supply of goods or services or both to registered person).
  • E-invoicing basically aims reduction in evasion of tax; auto-population of various returns and also targets the reduction of reconciliations problem currently prevailing under GST.

Various stages of implementation of e-invoice under GST

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
  • E-invoicing made applicable to-
Category of person The registered person having an aggregate turnover of more than INR 100 Crores in a Financial Year.
Type of transaction B2B transactions i.e. supply of goods or services or both to the registered person.
Effective date 1st April 2020
Notification 13/2020- Central Tax dated 21st March 2020
  • Following category of a person exempted under e-invoice

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.

  • The effective date of e-invoicing extended to 1st October 2020.
Notification 61/2020- Central Tax dated 30th July 2020
  • A Special Economic Zone unit exempted from e-invoicing.
  •  Increased the e-invoicing effective limit from INR 100 Crores to INR 500 Crores.

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
  • From 1st January 2021, e-invoicing made mandatory for the registered persons having an aggregate turnover of more than INR 100 Crores in a financial year.
Notification 05/2021- Central Tax dated 8th March 2021
  • From 1st April 2021, e-invoicing made mandatory for the registered persons having an aggregate turnover of more than INR 50 Crores in a financial year.

Applicability and non-applicability of e-invoice under GST

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).

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