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In order to streamline the invoicing system in GST regime, CBIC has introduced the system of e-invoicing and has made it mandatory for taxpayers in phases.

E-invoicing implies that registered taxpayers are required to generate and issue invoices electronically online known as e-invoicing. Under the electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP), managed by the GST Network (GSTN).

E-invoicing was introduced in 01.10.2020 in phases as follows:

Phase Applicable to taxpayers having an aggregate turnover of more than (Rs.) W.e.f.
I 500 crore 01.10.2020
II 100 crore 01.01.2021
III 50 crore 01.04.2021
IV 20 crore 01.04.2022

Now, vide Notification No. 1/2022-Central Tax dated 24.02.2022, CBIC has notified that e-invoicing shall be mandatory for all assessees having turnover more than 20 crores in any of the financial years since the GST was made effective in India.

The knowledge of and compliance of e-invoicing is crucial for overall GST compliances by taxpayers. Some of the important concepts and features under the GST law in relation to e-invoicing are discussed hereunder. 

Turnover limit for Mandatory E-Invoicing in GST

Taxpayers with turnover more than Rs.20 crores in any of the financial years after 2017-18 are supposed to generate invoices from 1st April, 2022 compulsorily.

What is aggregate turnover is defined in section 2(6) of the CGST Act, 2017.

No generation of e-invoicing on voluntary basis  

Under the scheme of e-invoicing, only those taxable persons for whom e-invoicing is notified have to generate e-invoices i.e., having turnover of more than Rs. 20 crores. For other assessee, they have to continue with normal invoicing system as e-invoicing has not been made applicable to them. In other words, e-invoicing cannot be used on voluntary basis. 

Modes of invoice registration for taxpayers with turnover less than Rs.500 crores

Following steps ought to be followed for registration:

  • Integrate using API through GSP/ERP or taxpayers having more than Rs. 500 crores turnover and got direct API access.
  • Use offline tools such as bulk generation or GePP-Off.
  • Use GePP-On to register invoice either in online or offline mode.
  • Download and use mobile application. 

Credentials to access e-Invoice and e-Way bill in production environment

Same credentials can be used in production environments. If credential for e-Way bill is there, then that will also work for e-Invoice. Otherwise, register freshly and create your user credentials 

Separate registration for e-way bill and e-invoice

Once registered for one of E Way Bill or e-Invoice, same is valid for the other also. 

Amendment of reported invoice

Amendments are not possible, once Invoice Reference Number (IRN) is generated on Invoice Registration Portal (IRP). Any changes in the invoice details reported to IRP can be carried out on GST portal (while filing GSTR-1). However, these changes will be flagged to proper officer for information. 

Changes In Mandatory E-Invoicing in GST

Time limit for generation of IRN

Earlier, 24 hours time limit had been provided for generation of IRN after preparation of invoice by the taxpayers. Now, that validation has been removed based on demand of taxpayers. The invoice date should be later than 1st October, 2020, the day e – Invoice was introduced in India. IRN should be generated before issuing the invoice to the other party or movement of goods. 

Can IRN be cancelled and re-generated ?

Document number cannot be re-used even after cancelling the IRN. Original invoice itself has to be cancelled and a new invoice with new invoice number has to be generated which can be registered to get the IRN.

On cancellation of IRN, E-way Bill has to be cancelled first and then IRN has to be cancelled. E Way Bill cannot be cancelled if it is already verified by officer and hence even IRN cannot be cancelled. 

Time limit for cancelling the e-Invoice

E-Invoices can be cancelled within up to 24 hours of generation. The IRN details can be downloaded from IRP for next two days after generation of the IRN. 

When transportation details are not available

If the e-way bill has to be generated for the invoice but the transportation details are not available at the time of invoice generation, then either Part A slip can be generated and later transportation details can be updated to make it a valid E Way Bill or only invoice can be registered and IRN obtained first and later using the IRN as reference, either E Way Bill or Part A slip can be generated.

Print of e-invoices

Assessees can have their own invoice format. This will have logo, terms and conditions etc. only one needs to print the QR code on it.

The QR code which comes as part of signed JSON from IRP, shall be extracted and placed on the invoice. Printing of QR code can be done at any place on the invoice with any size, but should be able to scan using a mobile device. QR code can not be printed on separate paper.

Printing of IRN No., Acknowledgment No. & Date given by IRP, are optional and can be recorded in the ERP system for reference purpose. 

Invoices under Reverse Charge Mechanism (RCM)

 Reverse Charge Mechanism related invoices have to be generated by the supplier, not by recipient:

  • In case of B2B RCM invoices, if the supplier is notified to generate the IRN, he will do so with RC flag set to ‘Y’ in it, otherwise not required.
  • In case of B2C RCM invoices or self invoices, then IRN need not have to be generated.

 Now that assessees with turnover between 20 crores and 50 crores are also covered it becomes necessary for such taxpayers to understand the methodology of e-invoicing . While this write-up will give them a basic understanding, they may refer to the portal for understanding of mandatory e-invoicing and its compliance.

It would be desirable and advisable for taxpayers to comply with various provisions as well as ensure proper and full compliance.

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June 2024