• Notification Date: 24-05-2023
• Notification No: N/A

GST E-invoicing to Evidence a New Era of Efficiency and Accountability in Indian Taxation

Goods and Services Tax (GST) e-invoicing is a system implemented in India for generating and reporting invoices in a standardized electronic format. It was introduced to simplify the invoicing process and reduce errors while facilitating seamless data exchange between businesses and the Government. Under this system, businesses must generate invoices on their accounting or billing software and upload them to the GSTN portal, validating the information and issuing an Invoice Reference Number (IRN) and a digitally signed QR code.  

Initially, the e-invoicing system was made mandatory for businesses with an annual turnover of more than Rs 500 crores. Subsequently, it was extended to businesses with an annual turnover of more than Rs 100 crores, and then to those with an annual turnover of more than Rs 50 crores. The phased implementation was done to ensure a smooth transition to the new system, provide sufficient time to businesses to make necessary changes to their systems and processes and address any issues that arose during the implementation. 

The e-invoicing system is now mandatory for all businesses with an annual turnover of more than Rs 50 crores. This threshold was lowered to Rs.20 crore; however, from 1 October 2022, e-invoicing applies to businesses with a turnover of more than Rs.10 crore.  The threshold is further lowered to Rs. 5 crore with effect from 01.08.2023. 
 
Despite the implementation of the e-invoicing system, there have been compliance issues. Suppliers are uploading such invoices on the IRP portal on the current date, irrespective of the date of issue of such invoice. Technologically, these E-invoices have been accepted by GSTN until now, covering up for the non-compliance. Rule 48(5) provides that if a specified registered person issues any invoice other than an E-invoice, such invoice shall not be treated as an invoice. The immediate impact of this clause is that no Input Tax Credit would be available to the recipient of such an invoice.