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- Nowadays most business have to mandatory comply with the concept of E-Invoicing in GST for their business operations.
Let us understand what is E-Invoicing and its compliances.
- Meaning/Concept of E invoicing in GST
‘E-invoice’(Electronic Invoicing) is a concept in which all B2B invoices are electronically uploaded by the supplier and authenticated by invoice registration portal (IRP) with an IRN and QR code. In turn, the IRN and QR code should be printed on the invoice by the supplier before issuing it to the buyer.
- Applicability of E invoicing in GST
E-Invoicing business applicability from 1st April,2022
The 4th phase of e-invoice implementation is said to begin from 1st April,2022 and will be applicable for businesses with an annual turnover of 20 crores or above in the previous financial year.
- What are the supplies currently covered under E-invoicing in GST?
E-Invoicing currently applies to:
- Supplies to registered persons (i.e., B2B supplies),
- Supplies to SEZs (with/without payment of tax),
- Exports (with/without payment of tax), and
- Deemed exports,
that are made by the notified class of taxpayers.
- E-invoicing is not applicable to nil-rated or wholly-exempt supplies as in these cases, only a bill of supply is issued and not a tax invoice.
- Non -Applicability of E invoicing in GST-
However, E-invoicing shall not be applicable to the following categories of registered persons, irrespective of the turnover, as notified in the CBIC Notification No.13/2020 – Central Tax:
- An insurer or a banking company or a financial institution, including an NBFC
- A Goods Transport Agency (GTA)
- A registered person supplying passenger transportation services
- A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services
- An SEZ unit (excluded via CBIC Notification No. 61/2020 – Central Tax)
- A government department and local authority
(excluded via CBIC Notification No. 23/2021 – Central Tax)
- Primary consequences of non-compliance of E Invoicing in GST-
The non-generation of e-invoice for a B2B transaction will be considered as the invoice was never issued. It leads to the below penalties for each instance:
Penalty for non-issuance of invoice – 100% of the tax due or Rs.10,000, whichever is higher
Penalty for incorrect invoicing – Rs.25,000.
- Other consequences-
- Invoice being the primary document/proof for a transaction, you’ll face other severe consequences. Firstly, the invoice data will not be auto-populated to your GSTR-1 and your buyer’s GSTR-2A.
- In this scenario, your buyer can not claim Input Tax Credit (ITC) for the tax already paid. Then the buyers will not accept the goods or make payments without a valid tax invoice being issued. Ultimately it will hamper your business.
- Also, if you have transported the goods without a valid e-invoice, the department may detain the goods and the vehicle and impose a penalty accordingly.
- Further, the department also plans to restrict the generation of e-way bills without an Invoice Reference Number (IRN). So this will lead to further complications in generating e-way bills and movement of goods from your premises.
- What is the link between an E-invoicing and e-way bills?
- An e-way bill is generated when there is movement of goods in a vehicle whose value exceeds Rs. 50,000. A GST registered individual or business cannot transport goods that have value of more than Rs. 50,000 without an e-way bill.
- On generation of an e-way bill, a unique E-way Bill Number (EBN) is allocated that is available to the supplier, recipient, and the transporter.
- E-way bills are directly integrated with the e-invoicing system. It is totally the taxpayer’s choice if they want to generate the E-way bill at the time of e-invoice generation or later by using the IRN as a reference. However, it should be noted that an e-waybill will be invalid without a valid e-invoice.
- The government of India has also linked e-way bills to the GST return filing. E-way bill generation will be blocked for taxpayers who have two or more consecutive GST returns pending to be filed.
- Registration Process for E-Invoicing in GST-
- To generate e-invoices, businesses must register to the Invoice Registration Portal (IRP). They have to log in or signup to this portal. If they are already registered on the e-way bill portal, then they can use the same credentials to log in to the IRP.
- Once logged in as a registered tax payer, click on the “Registration” tab in the IRP home page
Fill the registration form, enter the GSTIN and the captcha code
Details such as name, address, trade name, and contact details will be auto-populated based on GSTIN - Check and verify the details or click “Update from GST common portal” if it needs to be updated
- Click on “Send OTP”, OTP will be received on the registered mobile number
- Enter OTP to validate and provide a unique username
- Once username is validated, create password to access the IRP account
- For any assistance on E- Invoicing in GST Contact us– Call/ WhatsApp us at 8839799210 or email us at info@eazybahi.com.