E-Invoice under GST regime refers to a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal. Under the electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP) to be managed by the GST Network (GSTN).
E-invoicing is a technique under which invoices are electronically generated in a prescribed format Aggregate turnover for e-invoicing will include the turnover of all GSTINs under a single PAN across India. E-invoicing under GST regime in India, has been implemented in a phased manner in India, since October 1, 2020.
E-invoicing allows real time tracking of invoices prepared by a supplier, reducing scope of frauds.
Key Highlights
- From April 1, GST e-invoice is mandatory for businesses with Rs. 20 crore turnover.
- The CBIC (Central Board of Indirect Taxes and Customs) has reduced the turnover limit for mandatory issuance of e-invoice (electronic invoice) under the goods and services Tax (GST) to INR 20 Cr. from the earlier prescribed limit of INR 50 Cr.
- This step is expected to affect smaller businesses, who will now have to mandatorily issue electronic invoices.
- On failure to produce a valid invoice, the input tax credit (ITC) on the same cannot be availed by the recipient, besides attracting penalties.
- This amendment seems to be tailored to suit the Government's digital economy agenda.
- Notification 01/2022 which is published on 24th February 2022, it is said by the Central Board of Indirect Taxes & Custom that the minimum threshold is going to be Rs. 20 Crore from 01 April 2022.
- As a result, small businesses, mainly with Rs. 20 crore turnover, who usually issue informal sale invoices or "kacha bills" will have to mandatorily issue e-invoices.
- It must be noted that only a registered e-invoice with Invoice Reference Number (IRN) is considered to be valid and non-adherence will result in non-compliance.
- This is required to avail of input tax credit (ITC).
- The new system, which takes effect on 1 April, will add 180,000 GST identification numbers (GSTINs), up from the existing 240,000, to around 420,000, the official said on condition of anonymity.
Exemption from e-invoicing
E-invoicing shall not be applicable to the following categories of GST registered persons irrespective of the turnover:
- Special Economic Zone Units (excluded via CBIC Notification No. 61/2020 - Central Tax)
- insurer or a banking company or a financial institution, including an 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 the exhibition of cinematograph films in multiplex screens.
Link of the Circular: Click Here
Note: The principal notification No. 13/2020 - Central Tax, dated the 21st March, 2020 was published in the Gazette of India, Extraordinary, vide number G.S.R. 196(E), dated 21st March, 2020 and was last amended vide notification No. 23/2021-Central Tax, dated the 1st June, 2021, published vide number G.S.R. 367(E), dated the 1st June, 2021.
Disclaimer: Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information.
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