E-invoicing mandatory for businesses above Rs.5 crore turnover

What is E-invoicing?

E-invoice is also known as E-invoicing is a system in which all Business-to-Business (B2B) invoices and other documents are electronically uploaded and authenticated on the government's GST Invoice Registration Portal (IRP) and after the successful verification of the invoice, a unique Invoice Reference Number (IRN) is generated by the IRP portal.

Additionally, it is mandatory for the applicable businesses to generate a QR code for the e-invoice. Further, together with the IRN and QR code, a digitally signed invoice would be available for the supplier. This is issued to the product's recipient and is known as the e-invoice or electronic invoice. E-invoicing eliminates the need to create new invoices on government portals; instead, it involves uploading GST invoices issued by businesses to the IRP Portal through designated software.

History of E-Invoicing :

In the 35th meeting of the GST Council held on 21st June 2019, the suggestion of an e-invoicing under GST was coined, which was hence, implemented on October 1, 2020, in a voluntary GST-phased manner for the online generation of B2B e-invoices under GST by the registered person with an annual aggregate turnover of over Rs. 500 crore.
This e-invoicing turnover limit was lowered to Rs. 100 crore on January 1, 2021. In April 2021 this limit was further reduced to Rs. 50 crore.  Further e-invoicing turnover limit was reduced to Rs. 20 crore on April 1, 2022, and again e-invoicing turnover limit was reduced to Rs.10 crore on October 1, 2022. Currently, the turnover limit for e-invoicing is Rs. 5 crore as per Notification No. 10/2023–Central Tax dated May 10, 2023.

Applicability of E-invoicing?

The registered person whose aggregate turnover in any preceding financial year exceeds Rs. 5 crores from F.Y. 2017-18 to 2022-23. And where the supply is made to the registered person or exported outside India then an e-invoicing provision is applicable.

The aggregate turnover limit includes the turnover of all GSTINs under a single PAN across India.

Benefit of E-invoicing.

1. E-invoicing reduces reporting time.
2. A sale and purchase register can be easily created from E-Invoicing data and it also makes GST return filing easier.
3. E-way bills can be easily generated using E-Invoicing data.
4. Invoices issued by the supplier can be tracked in real-time.
5. Reconciling books of accounts and GST returns requires minimal matching of data.
6. The tax filing process has become easier due to E-Invoicing.
7. Fake invoices can be easily identified through e-invoicing. Therefore, it indirectly prevents fake invoices from being generated.

Persons exempted from E- Invoicing?

The following persons are exempt from an e-invoicing provision irrespective of their turnover.

• SEZ units.
• An insurer or a banking company or a financial institution, including a non-banking financial company.
• Goods Transport Agency.
• Suppliers of passenger transportation services.
• Suppliers of services by way of admission to an exhibition of cinematograph films on multiplex screens.
• A government department or a Local authority
• Supplier of OIDAR service located in non-taxable territory.

Can an e-invoice be cancelled partially/fully?
An e-invoice cannot be cancelled partially. If you want to cancel the e-invoice then it will be completely canceled. If the e-invoice has been cancelled then within 24 hours of cancellation IRN no. has to be reported. But if cancelled after 24 hours then it will be cancelled manually.

Penalty –

Where a taxable person fails to issue an invoice in accordance with the provisions of this Act or the rules made there under then shall be liable to a penalty which may extend to Rs. 50000 ( Rs. 25000 CGST and Rs. 25000 SGST)

Conclusion

E-invoicing has emerged as a game-changer in India's GST system, simplifying the invoicing process and promoting tax compliance. This comprehensive guide equips readers with the knowledge and understanding required to navigate the e-invoicing landscape in India. By embracing e-invoicing, businesses can optimize their invoicing processes, reduce errors, enhance data accuracy, and ensure compliance with GST regulations, ultimately driving efficiency and success in the GST era.

FAQs-

1. Is the e-invoicing provision applicable for NIL-rated or wholly-exempt supplies?
   Ans: No. e-invoicing provisions are not applicable for NIL-rated or wholly-exempt supplies.

2. What are the benefits of e-invoicing?
    Ans: The benefits of e-invoicing are E-way bill can be easily generated using E-Invoicing data. Invoices issued by the supplier can be tracked in real-time.

3. What is the current e-invoice limit?
   Ans. Rs. 5 crore is the current e-invoice limit.

4. Who is required to generate e-invoices?
   Ans: Registered person whose aggregate turnover in any preceding financial year exceeds Rs. 5 crore from F.Y. 2017-18 to 2022-23. And where the supply is           made to the registered person or exported outside India then the e-invoicing provision is applicable

5. Is there a time limit for generating e-invoices?
   Ans: Yes, Taxpayers whose AATO exceeds Rs. 100 crore within 30 days to report e-invoices and credit/debit notes on the IRP.

6. Are export invoices subject to e-invoicing?
   A: No, export invoices are exempt from e-invoicing.

7. Is Supply made by GTA e-invoicing provision applicable?
   Ans. The E-invoicing provision is not applicable to GTA.

7. What is the IRP?
   Ans. The Invoice Registration Portal (IRP) is a Government platform where taxpayer generate and report e-invoices.

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