E-INVOICE UNDER GST: Meaning, Applicability and Non-applicability#1

E-INVOICE UNDER GST: Meaning, Applicability and Non-applicability

What is E-invoicing ?

E-invoicing has emerged as a crucial facet of GST compliance in India, undergoing several revisions regarding its applicability. The most recent amendment, implemented in August 2023, mandates that businesses registered under the GST Act with a turnover exceeding Rs. 5 crores must generate e-invoices. Previously, this threshold stood at Rs. 10 crores. This adjustment aligns with the government’s drive to advance digitalization in India. This article delves into the multifaceted realm of e-invoicing within the GST framework

Electronic invoicing, commonly known as e-invoicing, is a method wherein B2B invoices and essential documents undergo electronic verification and authentication via the GSTN, facilitating their utilization on the GST portal. The implementation of e-invoicing, initiated during the 35th GST Council, encompasses all forms of enterprises.

Within this electronic invoicing framework, an identification number is assigned to each invoice generated through the Invoice Registration Portal (IRP), overseen by the GST Network (GSTN).

Subsequently, all invoice details are seamlessly transmitted from this portal to either the e-way bill portal or the GST portal in real-time, thereby obviating the need for manual data entry during invoice generation.

Applicability to generate E-invoice:

According to the updated GST regulations regarding e-invoicing, businesses with turnovers surpassing Rs.5 crore are now mandated to produce e-invoices. Previously, this threshold stood at Rs.10 crore prior to the recent amendment.

Since the inception of the e-invoicing system, there have been notable fluctuations in the threshold over time. The following table illustrates the evolution of e-invoice implementation in India.

S. No.	Threshold Limit	Date of Applicability
1	500 Cr	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

Documents Required for e-invoicing

Tax invoices,
credit notes and
and debit notes under Section 34 of the CGST Act

NON-APPLICABILITY OF E-INVOICING UNDER GST:

According to Rule 48(4), the following classes of people are exempt from the e-invoice mandate and need not generate an e-invoice under GST;

Banks, Insurance Companies, and Financial Institutions including but not limited to NBFCs.
Goods Transport Agency
Passenger Transport Services
Supplier of Services by way of admission to the exhibition of films.
Special Economic Zones (SEZ) Units. (Note: E-invoicing is applicable to Economic Zone Developers)

A recent advisory from GSTN highlights the availability of the E-invoice Exemption Declaration Functionality on the e-Invoice portal, which is optional for users. This feature caters specifically to taxpayers obligated to use e-invoicing but are exempted from doing so under the CGST (Central Goods and Services Tax) Rules.