Penalty for non issuance of E-Invoice under the GST- Where the supply is exempt under the GST.
The master notification issued under section 11 (1) of the act having No. 2/2017 dt. 28.06.2017 in which various commodities were scheduled at different serial numbers like Rice, Wheat or Pulses etc. These goods were exempt under the GST having at Serial No. at 70, 65 and 45 respectively (HSN Code: 1006, 1001 and 0713 respectively).
The Show Cause Notices (SCN) in DRC-01 which have been received by registered tax payers under GST implying the necessity of issuance of E-Invoices for their transactions made through issuance of Bill of Supply used for exempted goods. It is my understanding that, as per the aforementioned notification and as per the provisions under Chapter VII of the GST Act speaks about and deals with the Tax Invoices, Credit and Debit Notes read with Chapter VI of the GST Rules, the Bill of Supply was required to issue for exempted goods.
Because, as per under Section 31 the Tax Invoice was duly prescribed under the said section but as per Section 31(3)(c) of the CGST Act the Bill Supply is duly prescribed for issuance of supply made for exemption under the GST. Further, no separate foremost provision for Bill of Supply is incorporated under the Chapter VII, but same is reproduced herein for kind reference;
(c) a registered person supplying exempted goods or services or both or paying tax under the provisions of section 10 shall issue, instead of a tax invoice, a bill of supply containing such particulars and in such manner as may be prescribed :
Provided that the registered person may not issue a bill of supply if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed.
Mean thereby, where the goods were exclusively exempt from the GST were required to issue BILL of SUPPLY instead of TAX INVOICE.
Moreover, under Rule 48 prescribes the manner for Issuance of Tax Invoices and under Rule 49 prescribes the manner for Issuance of Bill of Supply under CGST Rules, 2017, here by the prescribing the subdivide rules by the legislature, want to differentiate between TAX INVOICE and BILL of SUPPLY.
Further, the e-invoices were incorporated under the GST through Master Notification No. 13/2020 (CT) dt.21.03.2020, as amended time to time due to the reduction in the aggregate turnover made by the registered tax payer. It is pertinent to note that in the said notification the rule 48 was termed or to say used not the rule 49 of the CGST Rules,2017.
So therefore, it is evident form the above provision, rules and the Notifications, which made mandate the Issuance of E-Invoices were very crystal and clear that in case where the BILL of SUPPLY was required to be issued wherein the transactions involving exclusively exempted goods then there is no requirement to issue an E-Invoices under Rule 48(4).
In light of above view, these Show Cause Notices in DRC-01 under Section 122(3)(e) of the GST Act,2017 will not only alleviate the undue burden on the registered tax payers but also create unnecessary litigation which is not the vision of ease of doing business path by the both government run by the State as well Central administration.
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