Applicability of E invoice on Exempt Supply
This query is : Resolved
02 August 2022
Respected Sir/ Madam,
In case of a Corporate engaged in Supply of exempt goods ---Annual Turnover exceeding 1000 crores. Out of this 1000 crores( 0.1 % represents scrap sales which is taxable and e invoice is raised by the company for scrap sales. Is e invoice to be raised for exempt goods supply also ( (SINCE IN SUCH CASE BILL OF SUPPLY IS ISSUED AND NOT TAX INVOICE)or it is not applicable??
In case of a Corporate engaged in Supply of exempt goods ---Annual Turnover exceeding 1000 crores. Out of this 1000 crores( 0.1 % represents scrap sales which is taxable and e invoice is raised by the company for scrap sales. Is e invoice to be raised for exempt goods supply also ( (SINCE IN SUCH CASE BILL OF SUPPLY IS ISSUED AND NOT TAX INVOICE)or it is not applicable??
06 July 2024
In the case of a corporate entity engaged in the supply of exempt goods with an annual turnover exceeding 1000 crores, and considering a small percentage (0.1%) of their turnover is from taxable scrap sales, here’s how invoicing would typically apply:
1. **Exempt Goods Supply**:
- For supplies of exempt goods, a Tax Invoice is generally not issued because these supplies are not subject to GST. Instead, a Bill of Supply is issued as per GST rules.
2. **Taxable Scrap Sales**:
- Since scrap sales are taxable, the company must issue a Tax Invoice for these transactions. This Tax Invoice can be an electronic invoice (e-invoice) as per the requirements under GST.
### Specific Points to Consider:
- **E-Invoice Requirement**:
- E-invoicing under GST is mandatory for businesses with an annual turnover exceeding specified thresholds (currently 100 crores, expected to be raised to 500 crores from January 2023). For taxable scrap sales, e-invoicing applies regardless of the annual turnover threshold because GST is applicable.
- **Exempt Goods Supply**:
- Exempt goods are not subject to GST, so a Bill of Supply is issued instead of a Tax Invoice. E-invoicing requirements do not apply to exempt supplies.
### Conclusion:
- **Taxable Scrap Sales**: Issue e-invoices as per GST regulations for taxable scrap sales, irrespective of the annual turnover, to comply with GST invoicing rules.
- **Exempt Goods Supply**: Issue Bills of Supply for exempt goods supply. E-invoicing is not applicable for exempt supplies.
By distinguishing between taxable and exempt supplies and following the respective invoicing rules (Tax Invoice for taxable supplies and Bill of Supply for exempt supplies), the corporate entity can ensure compliance with GST requirements effectively.
1. **Exempt Goods Supply**:
- For supplies of exempt goods, a Tax Invoice is generally not issued because these supplies are not subject to GST. Instead, a Bill of Supply is issued as per GST rules.
2. **Taxable Scrap Sales**:
- Since scrap sales are taxable, the company must issue a Tax Invoice for these transactions. This Tax Invoice can be an electronic invoice (e-invoice) as per the requirements under GST.
### Specific Points to Consider:
- **E-Invoice Requirement**:
- E-invoicing under GST is mandatory for businesses with an annual turnover exceeding specified thresholds (currently 100 crores, expected to be raised to 500 crores from January 2023). For taxable scrap sales, e-invoicing applies regardless of the annual turnover threshold because GST is applicable.
- **Exempt Goods Supply**:
- Exempt goods are not subject to GST, so a Bill of Supply is issued instead of a Tax Invoice. E-invoicing requirements do not apply to exempt supplies.
### Conclusion:
- **Taxable Scrap Sales**: Issue e-invoices as per GST regulations for taxable scrap sales, irrespective of the annual turnover, to comply with GST invoicing rules.
- **Exempt Goods Supply**: Issue Bills of Supply for exempt goods supply. E-invoicing is not applicable for exempt supplies.
By distinguishing between taxable and exempt supplies and following the respective invoicing rules (Tax Invoice for taxable supplies and Bill of Supply for exempt supplies), the corporate entity can ensure compliance with GST requirements effectively.
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