E-invoicing – Important step towards digitalization and automation

What Do You Mean By E Invoicing?

  • As per Rule 48(4) of CGST Rules, notified class of registered persons must prepare invoice by uploading specified particulars of invoice (in FORM GST INV-01) on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN);
  • E-Invoicing is a system of raising invoices, under which invoices generated by one software can be read by any other software, eliminating the need for any fresh data entry or errors. E-invoicing helps you with data reconciliation and accuracy during manual data entry.

To Whom Is The System Of E-Invoicing Applicable?

  • As per the latest notification No.17/2022 of Central Tax, tax payers whose turnover in any financial year exceeds Rs. 10 crores (on PAN level & not GSTIN wise) are mandated to follow the E-invoicing procedure.

What Are All The Supplies For Which E-Invoicing Is Applicable?

  • Supplies to registered persons (i.e. B2B transactions);
  • Supplies to SEZ (with/without payment);
  • Export (with/without payment);
  • Deemed Exports.

What Are All The Entities Exempt From E-Invoicing?

  • Insurer or a banking company or a financial institution, including NBFC;
  • Goods transport agency supplying services in relation to transportation of goods by road in a goods carriage;
  • Registered person supplying passenger transportation service;
  • Registered person supplying services by way of admission to exhibition of cinematograph films in multiplex screens;
  • SEZ Units.

How Does The E-Invoicing System Make The Compliance Mechanism Easier?

  • The e-invoice details will be auto-populated on tax return forms, making the tax return process easy. The supplier is allowed to edit the auto populated data;
  • In case the e-invoice is cancelled within 24 hours of the generation, the auto-populated details will be removed from GSTR-1, automatically and such details are shown in GSTR 1 under the cancelled invoices check box. However, post 24 hours, the cancellation option is not available. The tax payer needs to issue a credit note to reverse the invoice;
  • The details of the e-invoice, also gets auto populated in the GSTR-2A of the recipient;
  • The details are also sent to the e-way bill system;

Advisory: Time limit for Reporting Invoices on the IRP Portal

  • Businesses with turnover of Rs. 100 crore and above will have to upload their electronic invoices on IRP within 7 days of the issue of such invoice with effect from 1st May 2023.To ensure timely compliance, taxpayers in this category will not be allowed to report invoices older than 7 days on the date of reporting;
  • This restriction will apply to the all document types for which IRN is to be generated. Thus, once issued, the credit / Debit note will also have to be reported within 7 days of issue;
  • It will also prevent the entities from booking any back dated invoices/credit/debit notes and no fraud can be done on this account.

Updated Advisory: Deferment of Implementation of Time Limit on Reporting Old e-Invoices

  • There is a new advisory dated May 06, 2023 on time limit for reporting E-invoices on the IRP portal issued by the government which has been summarized in the following manner:-


“It has been decided by the competent authority to defer the imposition of time limit of 7 days on reporting old e-invoices on the e- invoice IRP portals for taxpayers with aggregate turnover greater than or equal to 100 crores by three months”.

Lowering of the threshold for E-Invoicing

On 10th May’2023, Ministry of Finance by Notification No. 10/2023 central tax has notified lowering of the threshold for E-Invoicing from Rs 10 crore to Rs 5 crore following which it will be mandatory for smaller businesses to carry business transactions via e-invoices from August 1, 2023.