Scope of the notification
The present notification covers only B2B and export transactions (but not B2C transactions or purchases under reverse charge). The requirements are briefly summarized below:
- Documents against which IRN must be generated:
- Debit notes
- Credit notes
- Domestic supplies to registered person (B2B)
- Exports with payment of tax or under LUT
- Supplies to SEZ with payment of tax or under LUT
- Invoices issued by ISD
- Supplies to unregistered persons (B2C)
- Supplies under Bill of Supply i.e. exempt or nil-rated supplies
- Commercial credit or debit notes
- Self-invoices for procurements under reverse charge
Auto-population of GST returns
The details of e-Invoices generated will be auto-populated in the GST returns, resulting in the auto-population of the returns to the extent of B2B and export transactions. Although the system would allow rectification or deletion of the auto-populated details during filing the returns, any significant discrepancy between the liabilities as per e-Invoices generated and the returns may invite further scrutiny.
Tracking of movement of goods
e-Invoicing and generation of e-Way Bills on the basis of IRN will help in tracking the goods from their origin to destination. Thus, every such movement of goods would have to be backed by a valid e-Invoice. The absence of GST e-Invoicing may lead to confiscating goods in transit, penalties, and prosecution on the charges of attempt to evade the taxes.
What are valid e-Invoices?
If the taxpayer is required to generate an e-Invoice but has not generated it, such document shall not be considered as a valid invoice. Thus, recipients of such invoices would not be able to claim the input tax credit of the tax paid by them, resulting in the additional cost for the buyers.
Non-compliance & penalties
Continued defaults or non-compliances, such as missing e-Invoices wherever required, may put the small businesses at the risk of being blacklisted due to penal consequences attached to it for their recipients, such as blocking of the input tax credits, reversal of credits along with interest when utilized.
While small and medium businesses constitute the key pillar of the Indian economy, e-Invoicing will definitely pull these businesses towards digitalization.
If you are one such business looking forward to comply with the government mandate and start an e-Invoicing journey before 1st April, Cygnet Tax Tech can surely help you. Contact us today: firstname.lastname@example.org and leverage the extensive suite of e-Invoicing solutions that are affordable and easy to use. Automate the e-Invoicing process and start generating valid e-Invoices within 24 hours.