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E-Invoicing Under GST

GST has been implemented in India from 1st July 2017, with a view to remove all the difficulties in existing  indirect tax system. Since then GST has made various revolutionary changes for providing ease of business and lessening the chance of tax evasion. One of such changes is introduction of E-Invoices

Rule 48(4) of the CGST Rules, 2017 as amended deals with requirement of E-invoice

1. E-Invoicing’ or ‘electronic invoicing’ is a system where by some documents are generated electronically through government (E-Invoice Portal) The E-Invoice portal is interlinked with GST common portal for further use on the common GST portal.

2. As soon as any person generates E-Invoice the same automatically gets updated in GSTR-1.

3. For identification E-Invoice portal generates unique IRN for each document.

4. The e-invoice can only be cancelled within 24 hours of its generation

Transactions where generation of E-invoicing is mandatory: –

  • B2B supply -invoice/CN/DN
  • Export -invoice/CN/DN
  • Deemed export – invoice/ CN/DN
  • SEZ supply – invoice/CN/DN
  • Deemed distinct supplies – invoice/CN/DN
  • RCM supplies under section 9(3) of The CGST Act, 2017.

E-Invoicing shall not be applicable to the following categories of registered persons.

  • An insurer or a banking company or a financial institution, including an NBFC
  • A Goods Transport Agency (GTA)
  • A registered person supplying passenger transportation services
  • A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services.
  • Persons registered in terms of Rule 14 of CGST Rules (OIDAR)

The taxpayers must comply with e-invoicing in FY and onwards if their e invoice limit or turnover exceeds the specified limit in any preceding financial year. Also, the aggregate turnover will include the turnover of all GSTINs under a single PAN across India. If the turnover in the last FY was below the threshold limit but it increased beyond the threshold limit in the current year, then e-Invoicing would apply from the beginning of the next financial year.

E-invoicing under GST has been implemented in various phase as according to turnover limit of the supplier, please refer below tables for details: –

Phase Turnover Limit Effective Date
I Above Rs 500 crore 01.10.2020
II Above Rs 100 crore 01.01.2021
III Above Rs 50 crore 01.04.2021
IV Above Rs 20 crore 01.04.2022
V Above Rs 10 crore 01.10.2022
VI Above Rs 5 crore 01.08.2023

It is important for the recipient to ensure that if its supplier is enabled for e-invoice, said supplier is complying with the provision of issuing e-invoices else credit of the recipient can be questioned. As per Rule 48(5) of CGST Rules, 2017 as amended if taxpayer to whom e-invoicing provisions are applicable, issues invoice without complying with such requirements, the document will not be treated as invoice in GST. Thus, there can be challenges in ITC availment by the Company as receipt of valid tax invoice is essential condition to claim ITC.

The enablement of the suppliers for e-invoice can be checked through

Penalty of Rs. 10000 of 100% of tax amount due on invoice will be applicable in case E-Invoice is required to be generated but not generated

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May 2024