What is e-Invoicing Under GST? Applicability, Limit & Implementation Date

e-Invoicing under GST denotes electronic invoicing defined by the GST law. Just like how a GST-registered business uses an e-way bill while transporting goods from one place to another. Similarly, certain notified GST-registered businesses must generate e invoice for Business-to-Business (B2B) transactions.

Mandatory E-Invoicing

Registered persons whose aggregate turnover in any preceding financial year from 2017-18 onwards exceed following amounts are required to prepare E-Invoice. 

Also, the aggregate turnover will include the turnover of all GSTINs under a single PAN across India.

[13/2020-CT dt. 21.03.2020]

Transactions and documents criteria

The following transactions and documents listed below fall under E-invoicing applicability –

(a) Documents :

• Invoices
• Credit notes
• Debit notes

when issued by notified class of taxpayers (to registered persons (B2B) or for the purpose of Exports) are currently covered under e-invoice.

FAQ : Whether the financial/commercial credit notes also need to be reported to IRP?

Answer : No, only the credit and debit notes issued under Section 34 of CGST/SGST Act have to be reported. 

(b) Transactions

• Taxable Business-to-Business sale of goods or services,
• Business-to-government sale of goods or services,
• Exports,
• Deemed exports,
• Supplies to SEZ (with or without tax payment),
• Stock transfers or supply of services to distinct persons,
• SEZ developers, and
• Supplies under reverse charge covered by Section 9(3) of the CGST Act.

Who need not comply with e-Invoicing?

(a) Notified Businesses :

E-Invoice provisons not appliable on :

• Government departments,
• Local authorities and
• An SEZ unit (excluded via CBIC Notification No. 61/2020 – Central Tax)  and
• those referred to in 
  • Rule 54(2) - An insurer or a banking company or a financial institution, including an NBFC,
  • Rule 54(3) - A Goods Transport Agency (GTA)  
  • Rule 54(4) - A registered person supplying passenger transportation services and
  • Rule 54(4A) - A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services 

[13/2020-CT dt. 21.03.2020]

(b) Documents : 

• Delivery challans,
• Bill of supply,
• Financial or commercial credit note or debit note,
• Bill of entry, and
• ISD invoices.

(c) Tansactions : 

• Any Business-to-Consumers (B2C) sales,
• Nil-rated or non-taxable or exempt B2B sale of goods or services,
• Nil-rated or non-taxable or exempt B2G sale of goods or services,
• Imports,
• High sea sales and bonded warehouse sales,
• Free Trade & Warehousing Zones (FTWZ), and
• Supplies under Reverse Charge covered by Section 9(4) of the CGST Act.

Penalty for non-issuance of e-invoice

As per section 122(3) of CGST Act, any person who fails to issue invoice in accordance with the provisions of this Act or the rules made thereunder or fails to account for an invoice in his books of account shall be liable to a penalty which may extend to twenty-five thousand rupees.