Recent update by Central Board of Indirect Taxes and Customs in E-invoicing

A.   Exemption from E-Invoicing mandate for invoices issued till October 31, 2020

On September 30th, 2020, the CBIC issued Press release which dealt with the taxpayers of the Indian industry who are not very familiar with the E-invoicing. For such taxpayers the invoices issued by them for the month of October, 2020 without keeping in mind the manner prescribed under GST Rule 48(4), shall stand validated and the penalty mentioned under Section 122 of the CGST Act which followed the non-adherence will not apply if the Invoice Reference number (IRN) is acquired from the portal of invoice Reference within a period of 30 days of such date of invoice.

B.   The Applicability of the QR Code has been postponed to December 2020

Under Rule 46, Proviso 6 of the CGST Rules it is specifically mentioned that by passing notification to that effect, the government shall notify keeping in mind the restrictions that Quick Response (QR) Code shall be annexed to the Invoices.

Through Notification No. 14/2020 dated March 21st, 2020 the CBIC informed that a registered individual issuing an invoice to an unregistered individual and income of such individual during one financial year is more than Rs. 500 Crores, other than the individuals mentioned in Rule 54 sub-rule 2, 3, 4, and 4A along with the registered individuals mentioned in Section 14 of the IGST Act, 2017 are required to obtain Dynamic Quick Response (QR) code.

The Notification further gave that where such enlisted individual makes a Dynamic Quick Reaction (QR) code accessible to the beneficiary through a computerized show, such B2C receipt gave by such enlisted individual containing cross-reference of the instalment utilizing a Dynamic Quick Reaction (QR) code, will be regarded to have Quick Response (QR) code.

The above notice will be applicable from October 1, 2020.

As per the ongoing Notification No. 71/2020-Central Tax dated September 30th2020, the said QR Code has been conceded till December 1st, 2020 and the Aggregate Turnover in any of the first FY from 2017-18 onwards if is Rs. 500 Crore will presently fall inside the ambit of e-invoicing in opposition to a characterized budgetary year as was recommended before.

C.   GST Rule 46 makes QR Code mandatory

Through Notification no.72/2020 dated September 30th, 2020 makes the QR Code mandatory to have IRN on individual invoices as well which are issued in consonance with the specific rules dealing with the same aspect mentioned under Rule 48(4) after inserting in Rule 46, a sub-rule (r).

D.  Exemption from E-invoicing allowed

GST Rule 48(4) talks about the preparation of the invoice by pre decided registered persons which shall include the particulars as mentioned under GST FORM INV-01 and after receiving an IR number from the GST Portal after filing the portal with the required information further subject to the restrictions mentioned if any.

E.   Notification dealing with E-invoicing specifically for the Exports business person

Rule 48(4) of the CGST Rules, 2017 informed the registered persons, other than the ones falling under Special Economic Zone unit and apart from those mentioned under Rule 54 sub-rule 2, 3, 4, and 4A and whose aggregate income in one financial year is more than Rs. 500 Crores, as a category ofregistered individual who shall prepare invoice and other prescribed documents, in accordance with Rule 48 sub-rule 4, in respect of supply of goods or services or both to a registered individual.

Notification No. 70/2020-Central Tax dated September 30th, 2020 introduced the following Changes:

a.      The total turnover in any of the previousfinancial year from 2017-18 onwards if is Rs. 500 Crore shall as of present lie within the ambit of e-invoicing contrary to a defined financial year aswas mentionedpreviously.

b.     Unlike earlier, now such e-invoices shall be produced for exports as well. Earlier the position was unclear as to whether the e-invoices are to be prepared by individuals dealing in the business of export.

F.    Physical copy of tax invoice required along with electronic one for QR Code

Notification No. 72/2020-Central Tax dated September 30th, 2020 provides additionally for Rule 138A sub-rule 2, mentioning that in conditions where invoice is issued under Rule 48(4), the QR Code having an implanted IR Number may be shown electronically, for getting it verifiedthrough the appropriate officer along with the Physical Copy of such Tax Invoice.

-By Ronak Tyagi