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E-invoice GST limit

E-invoice GST Limit (2023 Updated)

E-invoice GST limit has been a hot topic in the GST world. The government is attempting to accommodate MSMEs through e-invoicing. Finance department issues several circulars and GST notices for the smooth implementation of electronic billing in the country.

So if you’re wondering if your business has crossed the e-invoicing threshold, you’ve come to the right place.

Table of Contents

What Are E-invoice GST?

Einvoicing is an electronic authentication mechanism under GST. All B2B and export invoices created by a company must be registered with a government system or invoice registration portal (IRP) and provided with a unique identification number called an invoice reference number (IRN).   

 The IRP works with the IRN to create a digitally signed QR code with the selected invoice details and digitally sign the uploaded invoice data. An e-invoice is therefore a printed document containing a digitally signed QR code and an associated IRN. The IRN details should be readily accessible on both the GST and EWB portals after the invoice has been generated and validated.  

Documents required 

  Taxpayers are required to report the following document

  • Invoice by Supplier
  • Credit Note by Supplier
  • Debit Note by Supplier

What Is E-invoice Cancellation Process? 

Steps to cancel an electronic invoice from the portal. 

  1. Log in to GST Portal. 
  1. Select ‘e-invoive’ in the main menu. 
  1. Select ‘Cancel’ in the e-invoicing menu. 
  1. Select and mention E-Bill Acknowledgement Number or IRN. Click Go.
  1. Then you will see the e-invoice you want to cancel.
  1. Select a reason for cancellation and submit.  
  1. After submission, you will see a success message with a cancelled e-invoice and a ‘Cancelled’ watermark.

What Is the Limit for E-invoice?

Any GST-registered taxpayer whose turnover in any of the financial years from 2017-2018 exceeds INR 500 crores must implement an electronic invoicing mechanism from October 1, 2020.

In addition, any taxpayer with a turnover exceeding Rs 100 crore in any financial year 2017-2018 will have to implement this new invoicing system from January 1, 2021. The electronic invoicing system requires taxpayers to create invoices in their internal system and submit them to the Invoice Registration Portal (IRP).

Aggregate Annual Turnover (AATO) (FY 17-18 onwards)Effective Date
Rs. 500 Cr.1st October 2020
Rs. 100 Cr.1st January 2021
Rs. 50 Cr.1st April 2021
Rs. 20 Cr.1st April 2022
Rs. 10 Cr.1st October 2022

E- Invoice Limit

Who Is Exempted from E-invoicing?

E-invoice does not apply to the following categories of persons, irrespective of turnover:

  • Special Economic Zone units
  • An issuer
  • An NBFC
  • A Goods Transport Agency
  • A banking company 
  • A financial institution
  • A person supplying passenger transportation services
  • A person who provides admission services to cinematographic film exhibitions in multiplex services.

What Are the Mandatory Fields of an E-invoice?

The mandatory field of an E-invoice are:

 In Documents

  • Document No. should be required.
  • Document Date should be in “DD/MM/YYYY” this format.

 Suppliers Information

  • Supplier’s Legal name as per PAN Card.
  • GSTIN of the Supplier.
  • Supplier’s address and place
  • Supplier’s State Code and Pin Code.

Recipients Information

  • Recipient’s Legal name as per PAN Card.
  • GSTIN of Recipient.
  • Place of Supply (State Code).
  • Recipients address.
  • Recipient’s place and State Code.
  • Invoice item details
  • Item list

What Is the Minimum Amount for an Invoice?

A tax invoice is not required when the value of the goods or services supplied is less than INR 200, if –  

  • Recipient is not registered and 
  • Recipient does not request an invoice, however, if the recipient requests one, one should be issued.

What Is the Penalty If an E-invoice Is Not Generated?

The penalties for failing to generate an e-invoice are as follows:

Penalty for non-issuance of invoice: Each instance of non-compliance will result in a fine of 100% of the tax due or INR 10,000 (whichever is greater).

Penalty for incorrect invoice: The e-invoice penalty will be INR.25,000.

For transportation of goods without a valid invoice, the department has the authority to seize both the goods and the vehicle. A penalty may be imposed in this case.

E-Way Bill (EWB) generation will be impossible without a valid IRN. This may result in additional penalties (related to EWBs).

However, by taking the following precautions, you can avoid the penalties for a second e-invoice.

  • Once the IRN is generated, the e-invoice cannot be changed. You can only cancel the wrong e-invoice.
  • If you exceed this limit, you must create credit and cancel your e-invoice.

How Can I Modify My E-bill after 72 Hours?

After 24 hours, the recipient of the consignment can cancel an e-Way Bill at the request of the consignor. After 72-hour window, there is no procedure for cancelling an e-Way Bill.

FAQs:E-invoice GST Limit

Is e-invoicing mandatory for turnover above 5 crores?

E-invoicing is mandatory for taxpayers with turnover between Rs. 5 Cr. and Rs. 20 Cr.

Is e-invoice mandatory for B2B?

For all B2B transactions, businesses with a turnover of Rs 20 crore or more must mandatorily generate an electronic invoice.

Is e-invoice mandatory for B2C?

B2C invoices are exempt from electronic invoicing.

Can we cancel the e-invoice after 24 hours?

There is no provision for the cancellation of Electronic invoices after 24 hours.

Can I generate an e-invoice after the invoice date?

There is no time limit for making electronic invoices under the law. You can create an e-invoice within days of your B2B invoice date.

Is a Signature mandatory on an e-invoice?

Supplier or its authorized representative must sign/digitally sign e-invoices

Can the e-invoice be edited?

If an electronic invoice contains errors, inaccuracies, or incorrect entries, then is no option for editing or correction. Your only option is to cancel this invoice/IRN, upload a new invoice (with a new number), and generate a new IRN.

Is e way bill required for an invoice value less than 50000?

There is no requirement for an e-way bill if the invoice value is less than Rs.50,000.

Wrapping Up

Electronic invoices are an important aspect of India’s GST rules for B2B businesses.

The agency responsible for e-invoicing is the GST Council, which is part of  the Central Indirect Taxes and Customs Council. 

However, E-invoicing can be a laborious process. If you need assistance with e-invoice to enable GST compliance features, contact InstaFiling right away.

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