As per the latest decision of the GST Council, businesses with an annual turnover of Rs 50 crore or more will have to generate e-invoices for business-to-business (B2B) transactions from April 1, 2021. The e-invoicing system aims to enhance the ease of doing business while also improving tax compliance by reducing the risk of tax evasion. In this article, we will explore the provisions related to e-invoicing under GST and answer some frequently asked questions on the topic.
E-invoicing is a system in which invoices are generated electronically in a standard format, which is then authenticated by a central system. The e-invoicing system under GST is designed to make the process of generating and reporting invoices more efficient and accurate. The invoices generated through this system will have a unique invoice reference number (IRN) and a QR code, which will help in verifying the authenticity of the invoice.
As mentioned earlier, businesses with an annual turnover of Rs 50 crore or more are required to generate e-invoices for B2B transactions from April 1, 2021. It is important to note that this turnover threshold is based on the aggregate turnover of all registered entities under the same PAN. Therefore, if a business has multiple GST registrations under the same PAN, the turnover of all these registrations will be considered for determining the eligibility for e-invoicing.
E-invoicing under GST has several benefits, some of which are as follows:
The process for generating e-invoices under GST is as follows:
The technical requirements for generating e-invoices under GST are as follows:
If a taxpayer who is required to generate e-invoices under GST does not comply with the provisions, they may be subject to penalties and fines. The penalty amount may be up to Rs 10,000 per invoice, subject to a maximum of Rs 1,00,000. Therefore, it is important for businesses to ensure compliance with the e-invoicing provisions to avoid these penalties.
E-invoicing under GST is an important step towards improving tax compliance and making the process of generating and reporting invoices more efficient. While the initial rollout of e-invoicing is limited to businesses with an annual turnover of Rs 50 crore or more, it is expected that the threshold will be lowered in the future. Therefore, it is important for all businesses to be aware of the provisions related to e-invoicing under GST and ensure compliance with the same.
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