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What is e-Invoicing Under GST? Applicability, Limit & Implementation Date

As per Rule 48(4) of CGST Rules, notified class of registered persons (whose aggregate turnover in any preceding financial year from 2017-18 onwards, is more than prescribed limit) have to prepare invoice by uploading specified particulars of invoice (in FORM GST INV-01) on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN).

‘e-invoicing’ means reporting details of specified GST documents to a Government-notified portal and obtaining a reference number. (It doesn’t mean generation of invoice by a Government portal.) Even in the e-invoicing scenario, taxpayers will continue to create their GST invoices on their own Accounting/Billing/ERP Systems.These invoices will now be reported to Invoice Registration Portal (IRP) in a standard format (called ‘schema’ & notified as Form GST INV-1

e-invoice has many advantages for businesses such as Auto-reporting of invoices into GST return, auto-generation of e-way bill (where required). E-invoicing will also facilitate standardisation and inter-operability leading to reduction of disputes among transacting parties, improve payment cycles, reduction of processing costs and thereby greatly improving overall business efficiency.

On successful reporting of invoice details to IRP, the GST system will auto-populate them into GSTR-1 of the supplier and GSTR-2A of respective receivers. With source marked as ‘e-invoice’, IRN and IRN date will also be shown in GSTR-1 and GSTR-2A.

Atleast 6 digit HSN will be mandatory in e-Invoices, for taxpayers whose AATO is 5Cr and above, from 15th of December 2023.

Annual Aggregate Turnover For E- Invoicing

Sl no Turnover limit Date of applicability
1 500Cr 1st October 2020
2 100 Cr 1st January 2021
3 50 Cr 1st April 2021
4 20 Cr 1st April 2022
5 10 Cr 1st October 2022
6 5 Cr 1st August 2023

 

What is e-Invoicing Under GST? Applicability, Limit & Implementation Date
What is e-Invoicing Under GST? Applicability, Limit & Implementation Date

 

E- Invoicing FAQ Category

As per Rule 48(4) of CGST Rules, notified class of registered persons have to prepare invoice by uploading specified particulars of invoice (in FORM GST INV-01) on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN).

After following above ‘e-invoicing’ process, the invoice copy containing inter alia, the IRN (with QR Code) issued by the notified supplier to buyer is commonly referred to as ‘e-invoice’ in GST.

Because of the standard e-invoice schema (INV-01), ‘e-invoicing’ facilitates exchange of the invoice document (structured invoice data) between a supplier and a buyer in an integrated electronic format.

Please note that ‘e-invoice’ in ‘e-invoicing’ doesn’t mean generation of invoice by a Government portal.

For which businesses, e-invoicing is mandatory?

For Registered persons whose aggregate turnover (based on PAN) in any preceding financial year from 2017-18 onwards, is more than prescribed limit (as per relevant notification), e-invoicing is mandatory.

What documents are presently covered under e -invoicing?
  • Invoices
  • Credit Notes
  • Debit Notes,

when issued by notified class of taxpayers (to registered persons (B2B) or for the purpose of Exports) are currently covered under e-invoice.

Though different documents are covered, for ease of reference and understanding, the system is referred as ‘e-invoicing’.

What supplies are presently covered under e -invoice?

Supplies to registered persons (B2B), Supplies to SEZs (with/without payment), Exports (with/without payment), Deemed Exports, by notified class of taxpayers are currently covered under e-invoice.

B2C (Business to Consumer) supplies can also be reported by notified persons?

No. Reporting B2C invoices by notified persons is not applicable/allowed currently.

Is e-invoicing applicable for NIL-rated or wholly-exempt supplies?

No. In those cases, a bill of supply is issued and not a tax invoice.

For which entities/sectors, e-invoicing is not applicable / exempt?
  • Special Economic Zone Units
  •  Insurers
  •  Banking companies or financial institutions, including a non-banking financial company (NBFC)
  • Goods Transport Agency (GTA) supplying services in relation to transportation of goods by road in a goods carriage
  • Suppliers of passenger transportation service
  •  Suppliers of services by way of admission to exhibition of cinematograph films in multiplex screens
  •  Persons registered in terms of Rule 14 of CGST Rules (OIDAR)
Whether e-invoicing is applicable for supplies involving Reverse Charge?

If the invoice issued by notified person is in respect of supplies made by him but attracting reverse charge under Section 9(3), e-invoicing is applicable.

For example, a taxpayer (say Goods Transport Agency or a Firm of Advocates having aggregate turnover in a FY is more than Rs. 500 Cr.) is supplying services to a company (who will be discharging tax liability as recipient under RCM), such invoices have to be reported by the notified person to IRP.

On the other hand, where supplies are received by notified person from (i) an unregistered person (attracting reverse charge under Section 9(4)) or (ii) through import of services, e-invoicing doesn’t arise / not applicable.

What is an Invoice Registration Portal (IRP)?

Invoice Registration Portal (IRP) is the website for uploading/reporting of invoices by the notified persons.

Whether e-invoicing is applicable for invoices between two different GSTINs under same PAN?

Yes. e-invoicing by notified persons is mandated for supply of goods or services or both to a registered person.

As per Section 25(4) of CGST/SGST Act, “A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.”

What is the applicability of e-invoice for import transactions?

e-invoice is not applicable for import Bills of Entry.

Is the signature (DSC) of supplier mandatory while reporting e -invoice to IRP?

No

What do I need to generate an e -invoice?

A system/utility to report e-invoice details in JSON format to IRP and to receive signed e-invoice in JSON format from the Portal.

Whether any tool is provided to report invoices to IRP?

Yes. For entities not having their own ERP/Software solutions, they can use the free offline utility (‘bulk generation tool’) downloadable from the e-invoice portal. Through this, invoice data can be easily reported to IRP and obtain IRN/signed e-invoice.

What is e-invoice schema?

‘Schema’ simply means a structured template or format. ‘e-invoice’ schema is the standard format for electronic invoice. It is notified as ‘Form GST INV-1’.

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