E-Invoicing - An Introduction

The Central Board of Indirect Taxes & Custom had published a new notification about the E-Invoice Under GST, which contains the new rules of electronic invoicing.

Who should comply with e-Invoicing and Roadmap Notified?

The government mandated e-invoicing to avoid GST tax evasion. The first Committee was set up in May 2019 to discuss the usability of e-invoicing and its implementation plan in India, considering global implementations. Since then, several to be mandatory from 1st April 2020 but was later pushed by the GST Council, and finally, it became live drafts were issued, and finally, the e-invoice scheme was introduced in January 2020. E-invoicing was supposed from 1st October 2020 in a phased manner.

In the first phase, companies with turnover higher than 500 crore had to issue e-invoices from 1st October 2020. In the second phase, companies with turnover greater than 100 crore had to issue e-invoices from 1st January 2021. In the third phase, companies with turnover higher than 50 crore must issue e-invoices from 1st April 2021.

The Central Board of Direct taxes and Customs (CBIC) has made the e-invoicing system amndatory for taxpayers with a turnover higher than 20 crore from 1st April 2022 vide Notification No. 01/2022 – Central issued on 24th February, 2022.

What is the E-Invoice in GST?

E-Invoice stands for the electronic invoice which is issued by the Business and Corporate regarding the buying and purchasing of the products. It prescribes the standard format creating an invoice; E-invoice system basically authenticates the Business-to-business invoices, which makes the system more and more user-friendly. The invoices which are created between two corporations or businesses are authenticated electronically by the Goods & Services Tax Network.

Invoice Registration Portal which is managed by Goods & Services Tax Network issues an identification number for every single generated invoice. E-invoice under GST has various advantages, it helps in auto reporting Goods and Service Tax returns and it also helps to generate e-way bills or invoices when required. Out of these, two advantages are first to simplify the transaction methods and second is that it helps in reduction of billing process cost.

What happens if an e-invoice is not generated?

Non-generation of e-invoice is an offence and attracts penal provisions. It attracts heavy penal provisions of up to 10,000 per invoice. Further, incorrect invoicing can lead to a penalty of 25,000 per invoice.Other than penal provisions, if a taxpayer delays in generation of e-invoice-