Key points to consider for the applicability of e-invoices under GST in India are as follows.

Understanding E-Invoicing under GST.

E-invoicing, or electronic invoicing, under GST in India is a significant step towards digitizing the tax administration system. By introducing e-invoicing, the goal is to reduce tax evasion, increase transparency, and ease the compliance process. Here’s a guide to understanding the essential aspects of e-invoice applicability for GST in India:

First, let us understand what is E-Invoice?

E-Invoice is an acknowledgment process of uploading your original Tax Invoice to the Government portal. We can upload these invoices on the portal through the web (portal it self), API Based softwares like tally and others, through SMS, offline tool or through GSP.

The portal usually transfers all uploaded invoices on a real-time basis to the GST return portal or E-way bill portal. I have observed that it takes more time to get uploaded on GST return portal as compared to E-way bill portal.

Turnover Threshold for E-Invoice Applicability.

1. Current Threshold: As of August 2024, e-invoicing is mandatory for businesses with an aggregate turnover exceeding ₹5 crore in any financial year from 2017-18 onwards (See the deetailed notification for limits). This threshold has gradually decreased since e-invoicing was first introduced in 2020.
2. Calculation of Turnover: The aggregate turnover is calculated on an all-India basis for a PAN (Permanent Account Number). It includes all the supplies made, whether interstate, intrastate, export, or exempt.

Detailed turnover wise applicability of E-Invoice.

1st October 2020 for taxpayers with an aggregate turnover exceeding Rs.500 crore as per Notification No 61/2020-Central Tax and 71/2020-Central Tax.

1st January 2021 for taxpayers with an aggregated turnover exceeding Rs.100 crore as per Notification No. 88/2020.

1st April 2021 for taxpayers with an aggregated turnover exceeding Rs.50 crore as per Notification No.  5/2021.

1st April 2022 for taxpayers with an aggregated turnover exceeding Rs.20 crore as per Notification No.  1/2022.

1st October 2022 for taxpayers with an aggregated turnover exceeding Rs.10 crore as per Notification No.  17/2022.

1st August 2023 for taxpayers with an aggregated turnover exceeding Rs.5 crore as per Notification No.  10/2023.

Imp To note - The word or term is used in notification is “Any year” so don’t get confuse your self with this as “previous year”.

So if your turnover is say 5Cr in 2017-18 and 2Cr in 2022-23, still you will required to get your self register on E invoice portal and issue the E-Invoices.

Exemptions from E-Invoicing

• Certain entities are exempt from the mandatory e-invoicing requirement, irrespective of their turnover. These include:
• Insurers, banking companies, or financial institutions.
• Goods Transport Agencies (GTAs).
• Passenger transport services.
• Special Economic Zones (SEZs).
• Government departments and local authorities.

Documents Covered under E-Invoicing

• Invoices: Issued for B2B (Business-to-Business) transactions.
• Credit and Debit Notes: Issued by taxpayers registered under GST.
• Export Invoices: Treated as B2B invoices for e-invoicing purposes.

Invoice Registration Portal (IRP)

• Users need to upload e-invoices to the Invoice Registration Portal (IRP), where the system validates them and assigns a unique Invoice Reference Number (IRN) and a QR code. The IRP returns the e-invoice digitally signed to the taxpayer.

Integration with GST and E-Way Bill Systems

• The data from the e-invoice is auto-populated into GSTR-1 (outward supplies) and Part A of the e-way bill, streamlining compliance and reducing manual errors.

Penalty for Non-Compliance

• Penalty for non generation of e invoice – 100% of the tax due or Rs.10,000, whichever is higher, for every invoice.
• The penalty for incorrect invoicing is Rs. 25,000 per invoice.

Implementation Considerations

• Software and Integration: Businesses need to ensure that their ERP or billing systems are compatible with the e-invoice schema and can integrate with the IRP.
• Training and Awareness: Employees responsible for invoicing need to be trained on the e-invoicing process, ensuring accuracy and compliance.

Updates and Changes

• The government periodically updates the rules regarding e-invoicing. Businesses must stay informed about the latest changes to ensure compliance.

Conclusion

E-invoicing under GST has streamlined the invoicing process, making it more efficient and transparent. For businesses, understanding the applicability and complying with the e-invoice regulations is crucial to avoid penalties and ensure smooth operations. As the government continues to refine the system, staying updated on the rules and integrating them seamlessly into business processes is essential for long-term compliance and efficiency.