E-Invoicing Goes Live… But There is Time…

E-Invoicing Goes Live

Amidst a lot of speculation, the Government has decided to go ahead with the E-Invoicing implementation for certain specified persons. E-invoicing is going to be implemented from 01 October 2020 for registered persons with a turnover exceeding the threshold of INR 500 Crores.

Many requests have been submitted before the Board from the businesses and trade associations for relaxations from E-invoicing. Considering this the Board has advised the field officers to not impose penalties in case of initial defaults. Also, the department has issued various notifications pertaining to E-Invoicing which are summarized as follows:

Notification No. 70/2020-Central Tax dated 30 September 2020.

  • Calculation of aggregate Turnover: The CBIC has clarified that for the purpose of calculation of turnover to determine the applicability of E-invoicing, aggregate turnover in any preceding financial year from 2017-18 onwards shall be considered. Therefore if the aggregate turnover in any financial year i.e. 2017-18, 2018-19, or 2019-20 exceeds INR 500 Crores, then E-invoicing shall be applicable to such a registered person.
  • E-invoicing applicable on Exports: Earlier there were a lot of ambiguities relating to the applicability of E-invoicing on export transactions as the earlier Notification No.  13/2020- Central Tax dated 21 March 2020 notified that the E-invoicing shall be applicable in respect of the supply of goods or services or both to a registered person i.e. B2B transactions. The Board has now clarified that E-invoicing shall be applicable in respect of supplies of goods and services for exports as well.

Notification No. 71/2020-Central Tax dated 30 September 2020.

  • Deferment of QR code for B2C Transactions: The CBIC has decided to postpone the applicability of mandatory dynamic QR Code for B2C Transaction to 01 December 2020. Please note that the requirement of QR code for B2C transaction is different than for B2B transactions. The deferment is only provided for B2C transactions by the Board.

Press Release by CBIC dated 30 September 2020.

  • As per Rule 48(5) of Central Goods and Service Tax Rules, 2017 (‘CGST Rules’, 2017), every invoice issued by a person to whom E-invoicing is applicable in any manner other than the manner specified shall not be treated as an invoice.
  • However looking at the initial phase of implementation, the Board has decided to provide relaxation for issuance of E-invoice for the month of October 2020. Therefore, invoices issued by specified taxpayers during October 2020 without following the manner prescribed under rule 48(4) of CGST Rules, 2017, shall be deemed to be valid and the penalty leviable under section 122 of the CGST Act, 2017, for such non-adherence to provisions, shall stand waived if the Invoice Reference Number (IRN) for such invoices is obtained from the Invoice Reference Portal (IRP) within 30 days of date of invoice.
  • For example- In case a registered person has issued an Invoice dated 02 October 2020 without obtaining IRN at the time of issuance but obtains the IRN from the IRP on or before 30 days of the invoice i.e. 01 November 2020, then it shall be deemed that provisions of Rule 48(5) of the CGST Rules, 2017 are complied with and the invoice shall be treated as a valid invoice.

Please note that the relaxation to generate IRN is only provided for the month of October 2020. No such relaxation would be available for the invoices issued from 1st November 2020.  For ease of reference, we have tabulated the examples below:

Date Of Invoice

IRN Be Generated 

Comments

5 October 2020

Up to 4 November 2020

The invoice shall be deemed to be valid in terms of Rule 46 and no penalty will be levied. Considering notification, it appears the movement of goods will not be effected due to the non-generation of IRN. No other penal provisions will attract.

21 October 2020

Up to 20 November 2020

1 November 2020

On 1 November 2020

No relaxation has been granted for invoices generated on or after 1 November 2020. IRN along with the e-way bill (if applicable) and QR code will be required for the movement of goods.

 

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