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Amendment and Cancellation of e-invoice

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The system of e-invoicing brings in further automation and ease in the process of filing returns while also improving the controls against tax evasion. Let us take a look at the system of amendment and cancellation of an e-invoice.

Latest Updates on e-Invoicing

Update as on 29th November 2020

The CBIC 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 31st March 2021, provided the eligible registered person complies with these provisions from 1st April 2021.

Update as on 10th November 2020

The taxpayers having an aggregate turnover exceeding Rs.100 crore in any preceding financial year starting from 2017-18, should implement e-invoicing from 1st January 2021.

Update as on 1st October 2020

The applicable taxpayers have been given a grace period of 30 days for generating an Invoice Reference Number (IRN). However, this grace period is valid for the invoices issued between 1st October 2020 to 31st October 2020.

Update as on 30th September 2020

Now, the aggregate turnover should be checked from FY 2017-18 till FY 2019-20, for checking the applicability of e-invoicing. Also, the date of implementation of the dynamic QR Code for B2C invoices has been extended until 1st December 2020.

Update as on 30th July 2020

1. A new refined format of e-invoice has been notified by CBIC adding 20 new fields and removing 13 fields. Certain fields have undergone changes in character length as well.

2. e-Invoicing system shall apply to those taxpayers with annual turnover exceeding Rs 500 crore instead of Rs 100 crore.

3. Special Economic Zones (SEZ) units shall also be exempted from issuing e-invoices.

Update as on 23rd March 2020

The implementation of e-invoicing and the QR code has been deferred to 1st October 2020. Exemption from e-Invoicing and QR code has been granted to sectors such as the insurance, banking, financial institutions, NBFCs, GTA, and passenger transportation service, etc.

Functions of IRP: A quick glance

Before diving into amendment and cancellation of an e-invoice, we need to be aware that an e-invoice is created on the basis of a prescribed schema and a unique Invoice Reference Number (IRN) is assigned to each such invoice using a hash generation algorithm. The taxpayer can either generate the IRN or upload the invoice onto the IRP as it is and the IRP would generate the IRN. In case the taxpayer generates the IRN, the IRP will have to validate the same.

The IRP is an entity responsible for authenticating e-invoices by checking whether the invoice follows the prescribed schema and mandatory parameters, whether the IRN is unique, etc. Hence, the website of an IRP and that of the GST portal is separate. Once an IRP validates an e-invoice, it forwards the details to the GST portal.

Amendment and cancellation on the IRP

IRPs will process each invoice one at a time. However, to ensure that this process is not slowed down due to the burden on the servers, the IRP will have a very lean and focused system. To achieve this, one of the measures that will be used is that the IRP will not be required to store e-invoices for more than 24 hours.

Therefore, an e-invoice can be cancelled on the IRP only within 24 hours. Further, the whole of the invoice would have to be cancelled since partial cancellation is not possible. Amendments to an e-invoice cannot be carried out on the IRP.

Amendment and cancellation on the GST portal

While cancellation on IRP is allowed only within 24 hours, amendment and cancellation of e-invoices are allowed on the GST portal as per the provisions of GST law. This implies that amendments and cancellations of e-invoice would continue to be made while reporting in Form GSTR-1.

Conclusion

There has been no change in the scope for amendment and cancellation of invoices with the introduction of the e-invoicing system with the exception that e-invoices can be cancelled within 24 hours on the IRP.