E-invoicing under GST- Every thing you need to know

E-invoicing under the Goods and Services Tax (GST) is a digital process that requires businesses to generate invoices electronically. This system aims to streamline the invoicing procedure, enhance compliance and reduce tax evasion. By integrating with the government's Invoice Registration Portal (IRP), businesses must upload their invoices electronically, which are then validated and assigned a unique Invoice Reference Number (IRN). This facilitates real-time tracking and ensures that the invoices are standardized and easily accessible for both the supplier and the buyer. E-invoicing not only promotes transparency but also simplifies the filing of returns and reduces manual errors in the invoicing process. In this article we will try to understand about the e-invoices compliances in detail like the applicability of e-invoice, time limit to generate e-invoice, the sectors which are exempt from the e-invoicing requirements etc.

E-invoicing Applicability:
The applicability of E-Invoicing is to be determined on the basis of the Aggregate Annual Turnover of the taxpayer. As per Notification No. 13/2020 Central Tax, the registered persons whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds five crore rupees shall prepare invoice in terms of sub-rule (4) of rule 48 of the said rules in respect of supply of goods or services or both to a registered person or for exports. As per Rule 48(4) the invoice shall be prepared by including such particulars contained in FORM GST INV-01 after obtaining an Invoice Reference Number by uploading information contained therein on the Common Goods and Services Tax Electronic Portal.

In simple words the E-invoicing is mandatory for all Business-to-Business (B2B) transactions for businesses with an aggregate turnover exceeding Rs. 5 Crore in any previous financial year since 2017-18.

Recommendations for B2C E-invoicing:
After the successful implementation of e-invoicing in the B2B sector, in the 54^th GST Council meeting it was recommended to roll out of a pilot for B2C e-invoicing, following the Council recognized potential benefits of e-invoicing in retail, such as improved business efficiency, environmentally friendly, cost efficiency to the business, etc. It would also provide an opportunity to the retail customers to verify the reporting of the invoice in the GST return. The pilot will be rolled out on voluntary basis in selected sectors and states.

The documents for which e-invoicing is required to be generated:

• Tax invoice issued under Section 31 of CGST Act 2017.

• Debit Notes issued under Section 34 of CGST Act 2017.

• Credit Notes issued under Section 34 of CGST Act 2017.

The following persons are not required to generate E-invoice:

• Government department.

• Local authority.

• SEZ (Special Economic Zone) unit.

• An insurer or a banking company or a financial institution, including a non-banking financial company.

• Goods transport agency (GTA) supplying services in relation to transportation of goods by road.

• The supplier of passenger transportation service.

• The supplier supplying the services by way of admission to exhibition of cinematograph films in multiplex screens.

In respect a question that usually arises among the taxpayer is that whether the exemption from mandatory generation of e-invoice is available for the entity as whole, or whether the same is available only in respect of certain supplies made by the said entity?

The same was clarified in Para 3 of Circular No. 186/18/2022-GST the said exemption from generation of e-invoices is for the entity as a whole and is not restricted by the nature of supply being made by the said entity.

For example A Banking Company providing banking services, may also be involved in making supply of some goods, including bullion. The said banking company is exempted from mandatory issuance of e-invoice in terms of Notification No. 13/2020-Central Tax, for all supplies of goods and services and thus, will not be required to issue e-invoice with respect to any supply made by it.

E-invoicing requirement in case of supply made to Government Departments:
The E-invoice is required to be generated in case the supply of goods or services to Government departments or establishments/ Government agencies/ local authorities/ PSUs which are registered solely for the purpose of deduction of tax at source u/s 51 of the CGST Act. As per the clarifications provided in the Circular No. 198/10/2023 the Government Departments or establishments/ Government agencies/ local authorities/ PSUs, which are required to deduct tax at source as per provisions of section 51, are liable for compulsory registration in accordance with section 24(vi) of the CGST Act. Therefore, Government Departments or establishments/ Government agencies/ local authorities/ PSUs, registered solely for the purpose of deduction of tax at source as per provisions of section 51 of the CGST Act, are to be treated as registered persons under the GST law. Accordingly, the registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing, is required to issue e-invoices for the supplies made to such Government Departments or establishments/ Government agencies/ local authorities/ PSUs, etc under rule 48(4) of CGST Rules.

When to generate E-invoice/Time limit to generate E-invoice:
From 1st April 2025, taxpayers with an AATO of 10 crores and above would not be allowed to report e-Invoices older than 30 days from the date of reporting on IRP portals. This restriction would apply to all document types (Invoices/Credit Notes/Debit Notes) for which an IRN is to be generated.

For example, if an invoice is dated 1st April 2025, it cannot be reported after 30th April 2025. The validation built into the invoice registration portals (IRP) would disallow the user from reporting the e-Invoice after the 30-day window. Hence, it is essential for taxpayers to ensure that they report the e-Invoice within the 30-day window provided by the new time limit.

For taxpayers with an AATO below Rs. 10 Crores, there is no specific deadline for generating e-invoices. However, it is advisable to generate the e-invoice as soon as possible, preferably before filing the GSTR-1 return.

Time Limit for Cancellation or alteration of E-invoices:
The cancellation or alteration of e-invoices must be done within 24 hours from the time of issuance.

How E-invoicing helps in filing GSTR-1:

• Auto-population of e-invoice details into GSTR-1:
  Upon successful generation of IRN, details of such e-invoices will be auto-populated in respective tables of GSTR-1. The details of e-invoices available for auto-population along with status of auto-population can also be downloaded as excel file. Thus once the taxpayer has successfully generated the e-invoice of tax invoices, credit notes, debit notes issued by them the respective tables of GSTR-1 would be auto filed by the said details along with IRN details. Hence the taxpayer is not required to upload the JSON file of invoices/credit/debit notes on the common portal to file their GSTR-1. The taxpayer has to just match the details by downloading the excel file of e-invoice summary available on the portal.

• Auto-population of HSN-wise summary from e-invoices:
  A new feature to auto-populates the HSN-wise summary from e-Invoices into Table 12 of GSTR-1 is now available on the GST portal. This allows for direct auto-drafting of HSN data into Table 12 based on e-Invoice data. The taxpayer has to just reconcile the data with their records before its final submission. Any discrepancies or errors should be manually corrected or added in Table 12 before final submission.

Apps available on play store to verify E-invoice:

• E-Invoice Verifier App:
  To download this app visit the Google Play Store and search for "E-Invoice QR Code Verifier. "The app allows users to scan the QR code on an e-Invoice and authenticate the embedded value within the code. This helps in identifying the accuracy and authenticity of the e-invoice. The app provides a user friendly interface with intuitive navigation, making it easy for users to navigate through the app's features and functionalities. The app supports verification of e-Invoices reported across all six IRPs, ensuring comprehensive coverage and convenience. The app operates on a non-login basis, meaning users are not required to create an account or provide sensitive personal information to access its functionalities. This simplifies the user experience and makes it more convenient for users.

• GSTN e-Services App to Replace e-Invoice QR Code Verifier App:
  The new app has been launched by GSTN i.e., the GSTN e-Services app, which replaces the old e-Invoice QR Code Verifier App. Through this app the QR Code can be scanned to verify the B2B e-invoices and the live status of the Invoice Reference Number (IRN) can be checked. The user can also search for GSTIN details using the GSTIN or PAN. The return filing history for a GSTIN can also be viewed through this app and also no login is required to use the app.

No need to carry physical copy of invoice:
Once the invoice has been prepared in the manner prescribed under Rule 48(4) i.e., E-invoice has been generated then it is not compulsory required to carry the physical copy of the invoice. The same also clarified in Para 2 of Circular No. 160/16/2021 that there is no need to carry the physical copy of tax invoice in cases where invoice has been generated by the supplier in the manner prescribed under rule 48(4) of the CGST Rules and for verification by the proper officer the production of the Quick Response (QR) code having an embedded Invoice Reference Number (IRN) electronically would suffice.

Conclusion: The registered persons whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds five crore rupees shall prepare an e-invoice. The concept of e-invoicing helps in maintaining the transparency of transactions and also support in filing the GST Returns accurately in an effective manner. Very soon the e-invoicing would also be implemented on B2C transactions.

Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.