E-invoicing has become an important aspect of the compliance requirements for GST in India. There have been various amendments to the compliance requirements related to the applicability of e-invoicing. As per the latest amendment in August 2023, all the businesses registered under the GST Act, with a total turnover exceeding Rs.5 crores, are required to generate an e-invoice. Earlier, this threshold was Rs.10 crores. However, in line with the government’s initiative to promote digital India, the government brought about this amendment.
e-Invoicing under GST denotes electronic invoicing defined by the GST law. Just like how a GST-registered business uses an e-way bill while transporting goods from one place to another. Similarly, certain notified GST-registered businesses must generate e invoice for Business-to-Business (B2B) transactions.
What is e-invoicing Under GST?
Electronic invoicing or e-invoicing is a system in which the B2B invoices and other important documents are verified and authenticated electronically with the help of GSTN for use on the GST portal. In the 35th Council of GST, a system of e-invoicing was implemented, which covers all types of enterprises.
Under this electronic invoicing system, an identification number is issued for every invoice generated by the Invoice Registration Portal (IRP) and managed by the GST Network (GSTN).
All the information on the invoice is transferred from this portal to the e-way bill portal or the GST portal in real time. This way eliminates manual data entry requirements at the time of generating the invoice.
e-Invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices and a few other documents are authenticated electronically by GSTN for further use on the common GST portal.
In its 35th meeting, the GST Council decided to implement a system of e-Invoicing, covering specific categories of persons, mostly large enterprises. Later on, it has been expanded to cover mid-sized businesses and small businesses as well.
e-Invoicing does not imply the generation of invoices on the GST portal but it means submitting an already generated standard invoice on a common e invoice portal. Thus, it automates multi-purpose reporting with a one-time input of invoice details. The CBIC notified a set of common portals to prepare e invoice via Notification No.69/2019 – Central Tax.
Under the electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP), managed by the GST Network (GSTN). The National Informatics Centre launched the first IRP at einvoice1.gst.gov.in.
All invoice information gets transferred from this portal to both the GST portal and the e-way bill portal in real-time. Therefore, it eliminates the need for manual data entry while filing GSTR-1 returns and generation of part-A of the e-way bills, as the information is passed directly by the IRP to the GST portal.
Who is Required to Generate e-invoice, and What is its Applicability?
As per the new rules of GST on e-invoicing, all businesses having a turnover exceeding Rs.5 crore have to generate e-invoice. This threshold was Rs.10 crore before the latest amendment.
Ever since the introduction of the e-invoicing system, there have been significant changes in the threshold from time to time. Below is a table that shows the journey of e-invoice implementation in India.
| S. No. | Threshold Limit | Date of Applicability |
|---|---|---|
| 1 | 500Cr | 1st October 2020 |
| 2 | 100 Cr | 1st January 2021 |
| 3 | 50 Cr | 1st April 2021 |
| 4 | 20 Cr | 1st April 2022 |
| 5 | 10 Cr | 1st October 2022 |
| 6 | 5 Cr | 1st August 2023 |
If the turnover in the last FY was below the threshold limit but it increased beyond the threshold limit in the current year, then e-Invoicing would apply from the beginning of the next financial year i.e. FY 2023-24.
Suppose, ABC ltd aggregate turnover was as follows-
FY 2017-18: Rs 15 crore
FY 2018-19: Rs 17 crore
FY 2019-20: Rs 24 crore
FY 2020-21: Rs 19 crore
FY 2021-22: Rs 18 crore
Suppose, QPR ltd started business in FY 2019-20 and earned aggregate turnover as follows-
FY 2019-20: Rs 4 crore
FY 2020-21: Rs 7 crore
FY 2021-22: Rs 11 crore
The ABC Ltd shall mandatorily generate e invoices from 01.04.2022 irrespective of the current year’s aggregate turnover as it has crossed the Rs 20 crore turnover limit in FY 2019-20.
On the other hand, QPR ltd should comply with e-Invoicing from 1st October 2022 since its previous year’s annual turnover exceeds Rs.10 crore.
Who need not comply with e-Invoicing?
| Notified Businesses | Documents | Transactions |
| 1)An insurer or a banking company or a financial institution, including an NBFC 2) A Goods Transport Agency (GTA) 3) A registered person supplying passenger transportation services 4) A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services 5) An SEZ unit (excluded via CBIC Notification No. 61/2020 – Central Tax) 6) A government department and Local authority (excluded via CBIC Notification No. 23/2021 – Central Tax) 7) Persons registered in terms of Rule 14 of CGST Rules (OIDAR) | Delivery challans, Bill of supply, financial or commercial credit note or debit note, bill of entry, and ISD invoices. | Any Business-to-Consumers (B2C) sales, Nil-rated or non-taxable or exempt B2B sale of goods or services, nil-rated or non-taxable or exempt B2G sale of goods or services, imports, high sea sales and bonded warehouse sales, Free Trade & Warehousing Zones (FTWZ), and supplies under reverse charge covered by Section 9(4) of the CGST Act. |
What are the Documents Required for e-invoicing?
| Documents | Transactions |
|---|---|
| Tax invoices, credit notes, and debit notes under Section 34 of the CGST Act | Taxable Business-to-Business sale of goods or services, Business-to-government sale of goods or services, exports, deemed exports, supplies to SEZ (with or without tax payment), stock transfers or supply of services to distinct persons, SEZ developers, and supplies under reverse charge covered by Section 9(3) of the CGST Act. |
What is Aggregate Turnover as per GST?
As per section 2(6) of the GST Act, ‘Aggregate Turnover’ can be understood as the aggregate value of –
- All the taxable supplies
- Exported goods/services
- All exempted supplies
- All inter-state supplies of a person with the same PAN.
Therefore, a registered individual with multiple GSTINs under the same PAN can consolidate all taxable, exempt, and export turnovers generated across different GSTINs associated with that PAN. The calculation of aggregate turnover is based on the PAN and is not determined separately for each individual GSTIN.
This computation is performed on an all-India basis and excludes taxes levied under the CGST Act, SGST Act, UTGST Act, and the IGST Act. The aggregate turnover encompasses all supplies made by the taxable person, whether conducted on their own behalf or on behalf of all their principals.
What are the Documents and Supplies on which e-invoicing is Applicable?
Documents
- Invoices
- Credit Notes
- Debit note
Supplies
- B2B Supplies
It includes the supplies made to people registered under the same PAN but having different GSTNs. However, B2C supplies are not covered under e-invoicing. - SEZ Supplies
Supplies made to SEZ units with or without making payment for IGST - Export Supplies
- Deemed Exports
- Supplies to government departments
Supplies made to government departments exceeding the threshold for turnover are required to issue e-invoices
What are the Exceptions to the Applicability of e-invoicing?
- Banking and Insurance Sector
Any supplier of a taxable service who is an insurer, banking company, financial institution, or Non-banking financial company is exempt from the applicability of e-invoicing. - Goods Transport Agency
When the supplier is a goods transport agency providing services related to the transportation of goods by road in a goods carriage. - Passenger Transport Service Supplier
When the supplier is supplying passenger transportation service, it is exempt from e-invoicing applicability. - Admission to an exhibition of cinematograph films in Multiplex
A registered individual engaged in providing services through admission to the exhibition of cinematograph films on multiplex screens is exempt from the applicability of e-invoicing provisions. - SEZ Unit
SEZ units are exempt from e-invoicing. However, SEZ developers are not exempt from e-invoicing.
FAQs
Can an e-invoice be cancelled partially/fully?
An e-invoice cannot be cancelled partially but can be cancelled wholly. On cancellation, it must be reported to the IRN within 24 hours. Any attempt to cancel thereafter cannot be done on the IRN and must be manually cancelled on the GST portal before the returns are filed.
What type of documents need to be reported to the IRP?
Invoices by the supplier, credit notes as per the GST law, debit notes, and other documents required by the GST law must be reported as an e-invoice.