It is important to follow government guidelines, and failing to do so can lead to penalties, and unnecessary loss of time, and money. With the introduction of the new e-invoicing law by the government, all eligible taxpayers for this are required to generate e-invoices that are pre-validated through the government portal and provided with a unique IRN and a QR code.
Therefore as a business owner, one needs to check if they are eligible for e-invoices and adhere to the compliances in case you are.
As a recipient of services, one should ideally check if their supplier is eligible for e-invoices, and validate receipt of e-invoices in such cases. Failure to this can lead to a break in the GST process and would require additional time, and costs opportunity.
What is the eligibility for e-invoices?
e-Invoicing has been made applicable from 1st October 2020 to all businesses whose aggregate turnover has exceeded Rs.500 crore limit in any of the preceding financial years from 2017-18 to 2019-20.
Notification No.61/2020 – Central Tax prescribed the turnover limit for the implementation of e-Invoicing from 1st October 2020. Notification No.71/2020 – Central Tax prescribes the time period considered for determining eligibility under e-Invoicing.
Further, from 1st January 2021, e-Invoicing will be applicable to businesses exceeding the Rs.100 crore turnover limit in any of the financial years between 2017-18 to 2019-20, as intimated in Notification No.88/2020 – Central Tax.
On 8th March 2021, the CBIC notified that e-Invoicing will be applicable from 1st April 2021 for businesses with a turnover of more than Rs.50 crores (in any financial year from FY 2017-18 onwards, as intimated in Notification No. 5/2021 – Central Tax.
How to check if we are eligible for e-invoices
- Check for the eligibility on this link
- Enter basic details such as GST number, company name, taxpayer type, and the displayed captcha
- With just these details, one will be notified if they are eligible for e-invoices or not
There are multiple advantages of checking for e-invoices – It saves time, it allows people to check for e-invoice eligibility of their suppliers, and this also helps you validate the trustworthiness of an existing business.
How to apply for e-invoices?
All eligible GST taxpayers who need to generate IRNs and QR codes should register on the trial e-invoice system using their GSTIN. The taxpayers who are already registered on the e-way bill portal can use EWB credentials for login and need not register on the e-invoice system again.
One can first check for their eligibility on the link, and if they are eligible, in such cases they can follow these steps to successfully create e-invoices.
Who is exempted from e-invoices?
There are some exemptions that the government has stated. These business entities will not be required to share generate e-invoice,s and can operate like before.
- Insurance Companies
- Banking Company or a Financial Institution, including a Non-Banking Financial Company (NBFC)
- Goods Transport Agency (GTA) transporting goods by road in a goods carriage
- Transport service provider, providing passenger transportation service
- Registered person providing services of – admission to an exhibition of cinematograph films on multiple screens
- Special Economic Zone (SEZ) units
- Free Trade & Warehousing Zones (FTWZ)