Things you should know about e-invoicing under GST

Compliance under rule 48(4) for e-invoice under GST is mandatory from 1st August 2023 for taxpayers whose Agregate Annual Turnover (AATO) exceeds 5 Crores. 

Current Taxpayers base: Roughly ~ 6.05 lakhs GSTINs with AATO up to 10 crores are generating e-invoices at the moment, this base will explode to big size from 1st of August 2023

Mandatory: For Registered persons whose aggregate turnover (based on PAN) in any preceding financial year from 2017-18 onwards, is more than prescribed limit of 5 crores from 1st Aug 2023 as per  Notification No. 10/2023 – Central Tax dated 10th May 2023, e-invoicing is mandatory. Please note if this threshold exceeds only current FY 2023-24, then e-invoice is applicable only from FY 2024-25

What is to be included in AATO? 

Taxable, exempt, & Non-GST supplies are to be included to ascertain AATO limit. However, 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.

Consequences: As per Rule 48(4), notified person has to prepare invoice by uploading specified particulars in FORM GST INV-01 on Invoice Registration Portal and after obtaining Invoice Reference Number (IRN). As per Rule 48(5), any invoice issued by a notified person in any manner other than the manner specified in Rule 48(4), the same shall not be treated as an invoice.So, the document issued by notified person becomes legally valid only with an IRN. The penal provisions are provided in Section 122 of CGST/SGST Act read with CGST Rules.

Is this a mere digital invoice or digitally signed invoice or soft copy invoice?

No, Invoices with IRN are considered as e-invoice

Documents and supplies presently covered under e-invoicing: 

Only B2B Tax Invoices( not bill of supply), Debit notes and credit notes ( not Financial debit or credit notes- only those declared in returns). 

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. 

Reporting B2C invoices by notified persons is not applicable/allowed currently. e-invoice is not applicable for import Bills of Entry.

Registered persons ( entities) who aren't covered under e-invoice: 

• Special Economic Zone Units ( not SEZ Developers)
• 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)

Where e-invoicing is applicable, is carrying e-invoice print during transportation of goods mandatory?

No. As per Rule 138A(2) of CGST Rules, where e-invoicing is applicable, “the Quick Reference (QR) code having an embedded Invoice Reference Number (IRN) in it, may be produced electronically, for verification by the proper officer, in lieu of the physical copy of such tax invoice.”

Can I amend details of a reported invoice for which IRN has already been generated?

Amendments are not possible on IRP. Any changes in the invoice details reported to IRP can be carried out on GST portal (while filing GSTR-1). In case GSTR1 has already been filed, then using the mechanism of amendment as provided under GST.

Can an IRN/invoice reported to IRP be cancelled?

Yes. The cancellation request can be triggered through ‘Cancel API’ within 24 hours from the time of reporting invoice to IRP. However, if the connected e-way bill is active or verified by officer during transit, cancellation of IRN will not be permitted. In case of cancellation of IRN, GSTR-1 be updated with such ‘cancelled’ status. However, these changes will be flagged to proper officer for information.

Can an invoice number of a cancelled IRN be used again?

No. Once an IRN is cancelled, the concerned invoice number cannot be used again to generate another e-invoice/IRN (even within the permitted cancellation window). If it is used again, then the same will be rejected when it is uploaded on IRP. This is because IRN is a unique string based on Supplier’s GSTIN, Document Number, Type of Document & Financial Year.

Can I partially cancel a reported invoice?

No. It has to be cancelled in toto. No partial cancellation of reported e-invoice allowed. Cancellation of invoices is governed by Accounting Standards and any other applicable rules/regulations.

I have generated IRN for an invoice. There is a discrepancy in the invoice and supply also didn’t materialise, so, I had to cancel it in my system. However, I could not cancel the IRN on IRP as the cancellation window (24 hours) has expired. What to do?

Obtaining IRN by notified taxpayers is a legal requirement before issue of specified documents to recipients. Upon generation of IRN, amendments are not possible on IRP and cancellation of IRN only is permitted within a time window. So, the details of invoices actually issued during the tax period have to be reported in GSTR-1. GSTR-1 is the final and self-assessed statutory statement of outward supplies by taxpayer, at the end of tax period. In the e-invoices auto-populated in GSTR-1 tables, taxpayers shall delete the details, wherever required, as per the documents actually cancelled during the tax period.

Whether the e-way bill get auto-generated?

In case both Part-A and Part-B of e-way bill are provided in the e-invoice schema, the details will be used to generate e-way bill. In case Part-B details are not provided at the time of reporting invoice to IRP, the same will have to be provided by the user through ‘e-way bill’ tab in IRP log in or e-Way Bill Portal, so as to generate e-way bill. There is no time limit to generate e-way bill post IRN though.

Is there a turn around time to auto populate in GSTR 1?

Typical glitches: Typically it takes 3 days to auto-populate in GSTR1. If you don't it see the reflections within due time, taxpayers should ensure missed information or corrections, which can't be facilitated on IRP, are captured. Kindly bear in mind, its self-assessment, so it taxpayer's responsibility inspite of automation in pace.

Other useful links:

Detailed process overview

FAQs

- LDR