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e-Invoicing applies to transactions that fall under the ambit of the reverse charge mechanism under GST. This article covers the different types of RCM transactions and e-invoicing applicability on the same.
1st August 2022
The e-Invoicing system for B2B transactions has now been extended to those with an annual aggregate turnover of more than Rs.10 crore up to Rs.20 crore starting from 1st October 2022, vide notification no. 17/2022.
24th February 2022
The e-Invoicing system will get extended to those annual aggregate turnover of more than Rs.20 crore up to Rs.50 crore starting from 1st April 2022, vide notification no. 1/2022
30th June 2021
The CBIC has issued a notification seeking to waive the penalty imposed on non-compliance of dynamic QR code provisions for B2C invoices between 1st December 2020 and 30th September 2021.
1st June 2021
CBIC has notified vide Central Tax Notification no.23 dated 1st June 2021 that the e-invoicing system shall not apply to a government department and local authority.
30th March 2021
The CBIC has issued a notification seeking to waive the penalty imposed on non-compliance of dynamic QR code provisions for B2C invoices between 1st December 2020 and 30th June 2021, provided the said person complies with the provisions of the said notification from 1st July 2021.
Under GST, normally, the supplier of goods and services is liable to pay the tax. However, under the reverse charge mechanism, the recipient of goods and services is liable to pay GST instead of the supplier. This could be because the supplier is not a registered person under GST law, or the supplier falls in the category of service providers notified by the government, or any other reason. Hence, the recipient of supplies pays the GST on behalf of the supplier to the government and reports the same in his GST returns.
Reverse charge is applicable in the cases mentioned below:
e-Invoicing was implemented in India in a phased manner from 1st October 2020 for companies having turnover higher than Rs.500 crore in any financial year from FY 2017-18 onwards. Later, it was made applicable to businesses with turnover higher than Rs.100 crore and Rs.50 crores from 1st January 2021 and 1st April 2021, respectively. Currently, the limit of Rs.20 crore applies from 1st April 2022. Later from 1st October 2022, it shall apply to a limit of more than Rs.10 crore.
Under e-invoicing, a supplier must upload all their B2B invoices on the Invoice Registration Portal (IRP). The IRP authenticates the invoice and issues an Invoice Reference Number (IRN). The supplier carries out this process. But, in the case of reverse charge transactions, the recipient of supplies generates the invoice and reports the same to the government in the GST returns. The invoice will now need to be reported to the IRP first, and from there, the same will get auto-populated in the GST returns.
Now, let’s discuss the applicability of e-invoicing on different types of RCM transactions:
The following are the validations provided by the IRP for reverse charge mechanism: