There has been recent amendment in the Rule 46 of the CGST Rules, 2017 which deals with the issuance of Invoice for the outward supplies. As per the Rule 46 (q), signature or digital signature of the supplier or his authorised representative was must on the invoice. This rule has been amended to add a proviso which states as under,
“Provided also that the signature or digital signature of the supplier or his authorised representative shall not be required in the case of issuance of an electronic invoice in accordance with the provisions of the Information Technology Act, 2000 (21 of 2000).”
Relevant Notification- Notification No. 74/2018 – Central Tax Dated 31st December, 2018
Let’s decode this amendment
1. As per the earlier rules, there were two ways of authenticating the invoice i.e. actual signature on the invoice and other was signing the document with the digital signature.
2. However with advent of technology there are more ways of authenticating the documents. One of them is authenticating the documents / invoices with “Electronic signature”
3. The Information Technology Act, 2000 has made provisions for electronic signatures which different from the “digital signature” which are normally used by us.
4. There are lot of the businesses which are using the electronic signature to authenticate the documents / invoices. Also there are lot of service providers which are assisting businesses to use electronic signatures for authenticating the documents.
5. There are lot of companies which had started using electronic signatures for issuing the invoices like e-trailers. However, even after authenticating these documents with the electronic signature, the taxpayer were required to put actual signature or digital signature on the invoices as per the Rule 46 of the CGST Rules, 2017.
6. In order to address this issue, the proviso has been added in the Rule 46 which states that in case the invoice issued in accordance with the provision of the Information Technology Act, 2000 then there will not be requirement of putting the actual signature / digital signature.
7. It is important to note that the Information Technology Act, 2000 validates the electronic signatures only of the issuer has following reliable process (this process is mentioned in Section 3-A o the Information Technology Act, 2000),
(a) the signature creation data or the authentication data are, within the context in which they are used, linked to the signatory or , as the case may be, the authenticator and of no other person;
(b) the signature creation data or the authentication data were, at the time of signing, under the control of the signatory or, as the case may be, the authenticator and of no other person;
(c) any alteration to the electronic signature made after affixing such signature is detectable
(d) any alteration to the information made after its authentication by electronic signature is detectable; and
(e) it fulfills such other conditions which may be prescribed
To summarise, the taxpayer can issue invoice with the “electronic Signature” subject to having reliable system as mentioned above or with “digital signature” or with actual signature at his option.