e-Invoicing under GST: Applicability & New Limit

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.

What are the Documents Required for e-invoicing?

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.
• A local authority or government department is also exempt from e-invoicing under GST.
• Persons registered under Rule 14 of CGST rules are also exempt from e-invoicing under GST.

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.

Time Limit for Generating E-invoice

Until 30th April 2023, the GST system and law did not specify a time limit for generating e-invoices. However, from 1st May 2023, the government announced that taxpayers with an Annual Aggregate Turnover (AATO) of Rs. 100 crore or more must generate e-invoices for tax invoices and credit-debit notes within seven days of the invoice date. Non-compliance would render such invoices and notes invalid. Despite the announcement, the seven-day rule was not implemented.

Later, from 1st November 2023, the government mandated businesses with an AATO of Rs. 100 crore or more to report all tax invoices, credit notes, and debit notes to a notified IRP within 30 days of issuance. Subsequently, as per the GSTN portal advisory issued on 5th November 2024, this 30-day reporting requirement was extended to taxpayers with an AATO of Rs. 10 crore or more. To ensure smooth compliance, this change will take effect from 1st April 2025.

Process of Getting an E-invoice

Here are the steps you need to follow for getting an e-invoice -

• Prepare the ERP System: The taxpayer must use a reconfigured ERP system aligned with PEPPOL standards. Collaborate with the software service provider to incorporate the e-invoice schema (standards) and include all mandatory parameters, as CBIC has noted.
• Choose a Method for IRN Generation: Whitelist the computer system's IP address on the e-invoice portal for direct API integration or integration via a GST Suvidha Provider (GSP). Use the bulk generation tool to upload invoices in bulk. This tool generates a JSON file for uploading to the e-invoice portal to create multiple IRNs.
• Create the Invoice: Raise a regular invoice on the ERP or billing software, including mandatory details such as:
  • Billing name and address
  • Supplier GSTIN
  • Transaction value
  • Item rate
  • Applicable GST rate
  • Tax amount
• Upload Invoice Details: Depending on the chosen method, upload invoice details (including mandatory fields) to the Invoice Registration Portal (IRP) via:
  • JSON file
  • Application service provider (app or GSP)
  • Direct API integration
  • Other modes, like SMS or mobile app
• IRP Validation and IRN Generation: The IRP validates key invoice details, checks for duplication, and generates an Invoice Reference Number (IRN) using four parameters:
  • Seller GSTIN
  • Invoice number
  • Financial year (YYYY-YY)
  • Document type (INV/DN/CN)
  The IRP digitally signs the invoice, generates a QR code, and sends an Output JSON file to the supplier.
• Notification and Integration with GST Portal: The supplier receives an email notification (if provided) about the e-invoice generation. The IRP sends the authenticated payload to:
  • The GST portal for auto-population of the seller’s GSTR-1 return for the applicable tax period.
  • The e-way bill portal (if applicable), aids in determining the tax liability.

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 related to taxes, you can get in touch with our experts. Call us at 91166 84439 or email us at [email protected].