GST Network (GSTN) has enabled e-invoicing for taxpayers with Annual Aggregate Turnover (AATO) between ₹5 crore to ₹10 crore.  This will help assesses to get ready for new system in advance.

Businesses with a turnover of ₹5 crore or more will be required to adopt e-invoicing from August 1. The current threshold stands at ₹10 crore.

What is an e-invoice?

As per Rule 48(4) of CGST Rules, notified class of registered persons have to prepare an invoice by uploading specified particulars (in Form GST INV-01) on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN). The invoice copy thus obtained with the IRN (with QR code) is issued by the notified supplier to buyer and is commonly referred to as ‘e-invoice’ in GST terms.

E-invoicing facilitates exchange of the invoice document between a supplier and a buyer in an integrated electronic format. It is important to note that ‘e-invoice’ not registered on the portal will not be valid. In such a situation, input tax credit (ITC) on the same cannot be availed by the recipient and will attract applicable penalties. 

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Experts feel that the enablement of e-invoice will help the small taxpayers. Harpreet Singh, Partner, KPMG India said that the small taxpayers should timely configure and integrate their accounting systems (ERP) with the government’s e-invoice portal using tax technology tools to ensure seamless business operations. “Non-compliance with e-invoicing compliance by a supplier could result in loss of GST input credit to the buyer and thus may impact the profits,” added Singh.

Step towards automation

e-invoicing also helps with compliance. Gunjan Prabhakaran, Partner with BDO India says, e-invoicing is the first logical step towards achieving tax automation. Half the battle is won once the invoice details are made available electronically. Taxpayers who are subjected to e-invoicing mode from August 1, 2023, should take this as an opportunity to review and automate GST compliances, she advised.

Presently, GST return preparation and filing, managing input tax credit availment and utilisation is an arduous task, and if undertaken manually requires substantial time and effort. Depending on the volume of transactions, a taxpayer must undertake a review of invoicing requirement and the degree of information available in the ERP, and ERP integration with ASP-GSP (GST Suvidha Provider- Application Service providers).

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“Once the gap analysis is completed, one must ensure that all the data fields are available in the ERP as per the e-invoicing requirements and a seamless channel is established through ASP-GSP for real-time generation of e-invoice,” she said.

According to Prateek Bansal, Tax Partner with White and Brief – Advocates & Solicitors, issuance of e-invoices facilitates auto-reporting of invoice details in GSTR-1 of supplier and GSTR-2A of recipient, and auto-generation of e-way bills. While IRP does not allow amendment in an e-invoice, the said invoice can only be cancelled within 24 hours of reporting/generation. Therefore, “it is advisable that a Standard Operating Procedure (SOP) be put in place along with impartation of adequate training to the system users so as to avoid any inadvertent human error while capturing details and issuance of e-invoices,” he said.