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.

Phase	Applicable to taxpayers with an aggregate turnover exceeding	Applicable Date	Notification Number
I	Rs. 500 crore	01.10.2020	61/2020 –Central Tax and 70/2020 – Central Tax
II	Rs. 100 crore	01.01.2021	88/2020 - Central Tax
III	Rs 50 crore	01.04.2021	5/2021 - Central Tax
IV	Rs 20 crore	01.04.2022	1/2022 - Central Tax
V	Rs 10 crore	01.10.2022	17/2022 - Central Tax
VI	Rs 5 crore	01.08.2023	10/2023 - Central Tax

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.

Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website/APP.