E-Invoicing (electronic invoicing) is the process of sending and receiving invoices electronically, usually in a standardized format that can be read by both the sender and the recipient’s accounting systems. With E-Invoicing, the invoice data is transmitted electronically between the sender and the recipient, which eliminates the need for manual data entry and reduces the risk of errors.
The E-Invoicing format is a common format authenticated by the Goods and Services Tax Network (GSTN). It is used to ensure that a standard set of guidelines are followed for uploading the invoices on the GST portal.
The Invoice Registration Portal (IRP) generates a distinct Invoice Reference Number (IRN), digital authentication signatures, and a QR code for each invoice. This entire process is called E-invoicing under GST.
Who is applicable for E-invoicing?
- All major businesses with a turnover exceeding ₹500 crore were a part of the first phase of E-invoicing starting October 1st 2020 (Notification No. 61/2020 – Central Tax).
- Businesses with a revenue of ₹100 crores were later included in the second phase (Notification No. 88/2020 – Central Tax).
- Starting April 1st 2021, those with a turnover of ₹50 crores were included in the third phase (Notification No. 05/2021 – Central Tax).
- In 2022, the government decided to include small and medium-sized businesses as well, notifying them that the terms of E-invoicing also apply to companies with a turnover of ₹20 crores & ₹10 crores, as of 1st of April 2022 and 1st of October 2022 respectively (Central Tax Notification No. 01/2022 & Central Tax Notification No. 17/2022).
- From 01 August 2023, E-Invoicing will be mandatory for businesses with an annual aggregate turnover exceeding Rs. 5 crores. Currently the limit is 10 Crores which is been reduced to 5 crores (Notification No. 10/2023 – CT dated 10th May 2023)
Penalties for Non-Generation Of E-Invoice
An even greater fine of ₹25,000 per invoice may be imposed if an invoice is submitted with incorrect details to the invoice registration portal.
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The information provided in this presentation does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This presentation is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi-judicial authorities may not take a position contrary to the views mentioned herein.