Clarification on Rule 17AA of IT Rules, 1962 (Maintenance of Books of Accounts)

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Nike_rox (Querist)
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19 February 2024 Hi All,

as per 17AA(a)(v) original bills needs to be obtained from vendor and as per 17AA(2) all the bills can be electronic form.

Case: suppose an NGO based out of Delhi got a service of printing NGO brand logo T-shirts from a vendor of Mumbai, vendor sent the PDF copy of invoice via email, where image of signature is attached

Now my questions are:
1. Do we need to obtain original PHYSICAL invoice from vendor?
2. Do physical invoice needs to be signed by vendor and should also have stamp/seal of vendor?
2. What is the meaning of electronic form (digital invoice)?
3. Does only a digitally signed invoices with DSC signature are only valid as digital invoices ?
4. Where image of signature is copied in word document and PDF of same invoice is generated, will this be considered as digital invoice?
5. Suppose if we insist on getting the PHYSICAL invoice from vendor and he sent us the printed copy of that same PDF, that can we done by us, so what is the point of getting PYSICAL invoice from vendor, if we can also print the same ?

Our auditor is making big deal of this and insisting us to get the physical bill from vendor unless the digital invoice has DSC signature signed?

please give me some clarity on above rule, if possible please also share some source from where we can get the clarity on this rule, thanks in advance.

Best,
Nirmal

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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06 July 2024 The questions you have raised pertain to the compliance requirements under GST rules regarding the format and acceptance of invoices, particularly electronic invoices (e-invoices). Here’s a detailed clarification based on the queries:

1. Need for Physical Invoice:
• As per GST rules (Section 17AA(a)(v)), for claiming input tax credit (ITC), the recipient should possess the “tax invoice issued by the supplier containing such particulars as may be prescribed.”
• Physical vs. Electronic: The requirement is to have a tax invoice, and it can be in physical form or electronic form. It does not necessarily have to be a physically signed copy from the vendor unless specified by the recipient.
2. Physical Invoice Requirements:
• There is no specific requirement in GST rules that a physical invoice must be physically signed or stamped/sealed by the vendor to be valid. The key requirement is that it should contain the prescribed particulars of a tax invoice.
3. Electronic Form (Digital Invoice):
• An electronic invoice (e-invoice) in GST terms refers to an invoice generated, uploaded, and maintained electronically on the GST portal. It must comply with the technical standards and requirements laid down by GSTN (GST Network).
• It can be digitally signed using a Digital Signature Certificate (DSC) or authenticated through other electronic methods as specified.
4. Validity of Digital Invoices:
• DSC Signature: While a DSC signature on an electronic invoice is one method of authentication, it is not the only valid form. Other electronic methods of authentication can also be used, such as QR codes, digital tokens, or other secure electronic methods.
5. Creation of Digital Invoices:
• If a vendor sends an invoice electronically (like via email), and it includes an image of a signature, this can be considered a digital invoice.
• Creating a PDF from an electronically generated invoice (like from a Word document with an image of a signature) does not invalidate its status as a digital invoice, as long as it complies with GSTN’s requirements.

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