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e-Invoicing under GST: Applicability & New Limit

Updated on: 27 May, 2024 04:40 PM

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. In this article, we explore the various aspects of e-invoicing under GST.

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.


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

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?

The following registered persons are exempt from e-invoicing provisions -

  • 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.

In order to be compliant with the provisions and rules of the GST Act, it is important to gain an understanding of the same. However, GST can be complex and sound intimidating. Don’t worry; our tax experts are here to help you with every tax-related problem. So, if you have any queries,

get tax consultancy now!


Frequently Asked Questions

Q- Is a physical GST invoice required if an e-invoice is provided?

As per the Central Board of Indirect Taxes (CBIC), there is no need to present a physical invoice if an e-invoice has been provided.


Q- Can an e-invoice be canceled fully or partially?

While an e-invoice cannot be canceled partially, it can be canceled fully. It must be reported to the IRN within 24 hours of cancellation.


Q- 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.


CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

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