e-invoicing | A Journey so far!!!

As the era of new indirect taxation has commenced in India by way of introduction of Goods and Services Act, 2017 in July, 2017 subsuming erstwhile taxes, there has been continuous efforts from the side of Government to bring in newer and better reforms and technologies in the new system of indirect taxation in India.

One of such new reforms is e-invoicing. Invoicing is a fundamental process or activity under Goods and Services Tax Act, 2017 as it is a statutory document for various purposes. For an instance to avail Input Tax Credit (ITC), Rule 36 of CGST Rules, 2017 read with Section 16(2)(a) of CGST Act, 2017 mandates possessing of invoice issued in accordance with provisions of Section 31.

The Rule 48 of CGST Rules, 2017, which talks about manner of issuing invoice, has been amended vide Notification No. 68/2019 – Central Tax | Central Goods and Services Tax (Eighth Amendment) Rules, 2019. The sub rules (4), (5) and (6) under Rule 48 were inserted vide this amendment to implement the e-invoicing provisions. By insertion of new sub rule (4) under Rule 48, Government has empowered self to specify the manner and conditions of e-invoicing by way of notification.

In exercise of the powers from above sub-rule (4), the Government had notified, vide Notification No. 70/2019-Central Tax dated 13.12.2019, the class of persons to whom e-invoicing provisions shall be applicable with effect from 1^st April, 2020. However, considering numerous variants of e-invoicing the Government had deferred the applicability of e-invoicing to 1^st October, 2020 along the side certain class of registered persons were omitted from the provisions of e-invoicing.

Attention to be paid towards sub-rule (5) of Rule 48. For the brevity, the sub-rule (5) is reproduced hereunder to understand its implications:

(5) Every invoice issued by a person to whom sub-rule (4) applies in any manner other than the manner specified in the said sub-rule shall not be treated as an invoice.

The above sub-rule with a plain reading states that an invoice will not be treated as an invoice if it is not an e-invoice when e-invoicing provisions are applicable to the supplier or issuer of the invoice. The major repercussions of this sub-rule will be on the recipient of services or goods or both.

As stated supra, invoice is a statutory document to avail Input Tax Credit. If the recipient possesses an invoice other than e-invoice raised by a supplier to whom the e-invoicing is applicable, the document would render to be a meaningless paper in the eyes of GST Law. This will undoubtedly deprive the recipient from availing the ITC.

However, the problem ostensibly becomes harder when you are out of information as to e-invoicing provisions are applicable to your supplier or not. To overcome this issue, there are two options to go for.

One of the options is to check whether a particular GSTIN is generating the e-invoices from the list published by Government of those GSTINs generating Invoice Reference Number (IRNs). This list is updated from time to time by the Government. The list can be accessed and downloaded from the below link:

https://einvoice1.gst.gov.in/Others/GSTINsGeneratingIRN

As the name suggests itself, the above is the list is of those GSTINs which are already generating e-invoices or has already generated at least one e-invoice before the date of updated list published by the Government. However, if a GSTIN to which e-invoicing rules are applicable but for the reason of no outward taxable supply has not generated e-invoice so far will not be covered in the above list.

In such cases, another available option would be to obtain an undertaking from the vendors as to applicability of e-invoicing provisions and to indemnify in cases of violations of rules. A pro-forma of undertaking attached herein for ready reference.

Currently the aggregate turnover threshold for e-invoicing is Rs. 50 Crores in any preceding Financial Year from 2017-18 onwards. This threshold has been further brought down to Rs. 20 Crores vide Notification No. 01/2022-Central Tax dated 24.02.2022 to be applicable from 1^st April, 2022.

On seeing the pace at which government is reducing the threshold, it is evidently glaring to foresee that the threshold would be further reduced to Rs. 5 Crore as early as by 1^st October, 2022.

Here one has to be diligent in checking the threshold of aggregate turnover. The aggregate turnover as per clause (6) of Section 2 of CGST Act, 2017 must be checked for all individual preceding financial year starting from 2017-18 onwards. The threshold of aggregate turnover is neither for immediately preceding Financial Year nor for cumulative turnover of all Financial Years from 2017-18 onwards. It is specifically for any one of the individual Financial Year starting from FY 2017-18 onwards where the aggregate turnover has exceeded the notified threshold.

For Financial Year 2017-18, the aggregate turnover for the period July to March, 2018 should be considered i.e. aggregate turnover of GST regime is to be taken into account. Turnover for the first quarter of FY 2017-18 must be ignored.

Below is the illustrative table showing the applicability of e-invoicing provisions in different scenarios:

Table Showing applicability of e-invoicing provisions for new threshold of Rs. 20 Crores applicable from 01.04.2022
Case	Aggregate Turnover as per Sec 2(6) of CGST Act, 2017					Is e-invoicing applicable?
	Amount in Crores INR
	FY 2017-18	FY 2018-19	FY 2019-20	FY 2020-21	FY 2021-22
	Jul-Mar, 2018
A	20	20	20	20	20	No Applicable
B	17	18	19	20	21	Applicable
C	17	18	19	21	19	Applicable
D	17	18	21	19	19	Applicable
E	17	21	19	19	19	Applicable
F	21	19	19	19	19	Applicable
Note: For the Financial Year 2017-18, turnover of April to June, 2017 should not be considered

The journey of e-invoicing and its applicability is tabulated in the enclosed file with precise details and remarks for quick reading and understanding.

Journey of e-invoicing
SN	Notification No. Central Tax	Notification Date	Description	Details
1	68/2019-Central Tax	13-Dec-2019	Central Goods and Services Tax (Eighth Amendment) Rules, 2019	Implementation of e-invoicing provisions by inserting sub-rules (4), (5) and (6) under Rule 48 of CGST Rules, 2017
2	70/2019-Central Tax	13-Dec-2019	Seeks to notify the class of registered person required to issue e- invoice.	Effective from 01.04.2020   E-invoicing applicable to all taxpayers whose aggregate turnover in a financial year exceeds Rs. 100 Crores
3	13/2020-Central Tax	21-Mar-2020	Seeks to exempt certain class of registered persons from issuing e-	Effective from 01.10.2020     Exemption from e-invoicing to: 1. Insurer, Banking Company and Financial Institution including NBFC [Rule 54(2)] 2. Goods Transport Agency (GTA) [Rule 54(3)] 3. Passenger Transportation Service provider [Rule 54(4)] 4. Admission to exhibition of cinematograph films in multiplex screens [Rule 54(4A)]
			invoices and the date for implementation of e-invoicing extended to
			01.10.2020 from 01.04.2020
4	61/2020-Central Tax	30-Jul-2020	Seeks to amend Notification no. 13/2020-Central Tax in order to amend the class of registered persons for the purpose of e-invoice	Effective from 01.10.2020   1. Special Economic Zone (SEZ) units excluded from e-invoicing 2. E-invoicing threshold increased to Rs. 500 Crores from Rs. 100 Crores
5	70/2020-Central Tax	30-Sep-2020	Seeks to amend notification no. 13/2020-Central Tax dt. 21.03.2020.	Effective from 01.10.2020 1.  The words “aggregate turnover in a financial year” substituted by aggregate turnover in any preceding financial year from 2017-18 onwards” 2. E-invoicing for exports is also covered
6	88/2020-Central Tax	10-Nov-2020	Seeks to implement e-invoicing for the taxpayers having aggregate turnover exceeding Rs. 100 Cr from 01st January 2021.	Effective from 01.01.2021 1. E-invoicing threshold brought down to Rs. 100 Crores from Rs. 500 Crores
7	05/2021-Central Tax	08-Mar-2021	Seeks to implement e-invoicing for the taxpayers having aggregate turnover exceeding Rs. 50 Cr from 01st April 2021.	Effective from 01.04.2021 1. E-invoicing threshold brought down to Rs. 50 Crores from Rs. 100 Crores
8	23/2021-Central Tax	01-Jun-2021	Seeks to amend notification no. 13/2020-Central Tax dt. 21.03.2020. to exclude government departments and local authorities from the requirement of issuance of e-invoice.	Effective from 01.06.2021 Government Department and Local Authority are given immunity from from e-invoicing
9	01/2022-Central Tax	24-Feb-2022	Seeks to implement e-invoicing for the taxpayers having aggregate turnover exceeding Rs. 20 Cr from 01st April 2022	Effective from 01.04.2022 1. E-invoicing threshold further brought down to Rs. 20 Crores from Rs. 50 Crores

DECLARATION

TO WHOMSOEVER IT MAY CONCERN

Legal Name of Entity:	_______________________________
Trade Name of Entity:	_______________________________
Registered office Address	_______________________________
PAN:	_______________________________
GSTIN:	_______________________________

 –

Case No.	Aggregate Turnover at PAN level (in any preceding financial year from FY 2017-18 onwards	Tick the applicable case
1	Less than or equal to INR 50 crores (20 Crores from 01.04.2022)
2	Specific category excluded from compliance to e-invoice as notified

I, (Name of Authorised Signatory), (proprietor, designated partner, director, authorised signatory) of (company name). do hereby declare that the aggregate turnover of (company name) computed as per section 2(6) of Central Goods and Services Tax Act, 2017 does not exceed limit prescribed for generation of a unique Invoice Registration Number (IRN) and QR code as per provisions of Central Goods and Service Tax Act, 2017, Rules, Notifications or circulars, hereinafter referred as “GST LAW”. Accordingly, we are not covered under the ambit of GST e-invoicing provisions w.e.f. 1^st October, 2020 or 1^st January, 2021 or 1^st April, 2021 or (1^st April, 2022), as the case may be. Further, we do hereby declare that once the said provisions become applicable to the (company name), we shall issue the duly complied e-invoice under GST.

Further, any invoice or document issued by the (company name) to (Recipient Company Name) having GSTIN 01XXXXXXXXXXXZX, 02XXXXXXXXXXXZX, 03XXXXXXXXXXXZX, 04XXXXXXXXXXXZX, (applicable states) shall be properly & timely reported under the respective GST returns and correctly paid to the respective Government by (company name) in line with the provisions of GST Law.

We acknowledge that information furnished above are true. In case any of the above information is found to be incorrect at the later date or due to failure on our part to comply with the relevant laws and if any GST liability, interest, penalties or any other amounts become payable or input tax credit is denied to (Recipient Company Name) having above GSTINs, we shall indemnify for the same.

For and on behalf of (company name)

(Name of Authorised Signatory)

Place:

Date: