Amendment and Cancellation of e-Invoice

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:

10th May 2023
CBIC notified the 6th phase of e-invoicing. Hence, taxpayers with ₹5 Cr+ turnover in any financial year from 2017-18 shall issue e-invoices w.e.f 1st August 2023.

06th May 2023
The GST department has deferred the time limit of 7 days to report the old e-invoices on the e-invoice IRP portals by three months. Further, the department is yet to announce the new implementation date.

13th April 2023
The GSTN released an advisory on 12th and 13th April 2023 stating that taxpayers with an annual turnover of Rs.100 crore and more must report tax invoices and credit-debit notes to the IRP within 7 days from the date of issue of the invoice/CDN from 1st May 2023.

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. 

Functions of IRP: A quick glance

Before diving into the 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. It is important to note that as per the GSTN advisory dated 13th April 2023, taxpayers with an annual turnover of Rs.100 crore and more must report tax invoices and credit-debit notes to the IRP within 7 days from the date of issue of the invoice/CDN beginning 1st May 2023.

However, on 6th May 2023, the department has deferred the time limit of 7 days to report the old e-invoices on the IRP portals by three months. Also, the department is yet to announce the new implementation date.

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.

Step by step process to cancel e-Invoice

Cancellation of e-invoice can be done in three cases-

• Incorrect entry,
• Duplicate entry, or
• Buyer cancels the order

Keep the e-invoice handy at the time of cancellation.

Step 1: Go to the e-invoice dashboard on the 
the e-Invoice portal and click on ‘Cancel’ under the ‘E-Invoice’ menu.

Step 2: Enter either the acknowledgement number or IRN in the field and click on ‘Go’ button.

The system displays the e-invoice to be cancelled.

Step 3: Select the reason for cancellation. Also, type in the remarks and click on the ‘Submit’ button.

The system will display a confirmation message upon cancellation with the e-invoice having ‘cancelled’ watermark.

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.

Steps to cancel e-invoices in bulk

Step 1: Go to ‘Help’ section on the e-Invoice portal. Click on the ‘Bulk Generation Tools‘.

Step 2: Download the offline utility called ‘e-Invoice Cancel by IRN – JSON Preparation’.

Step 3: Enter details in fields/cells such as IRN, ‘Reason for Cancellation’, and ‘Cancel Remarks’ and click on ‘Validate’ to check if there are any errors. Rectify the errors, if any.

Step 4: Click on Prepare JSON once the file is validated.

Step 5: Login once again to the e-Invoice portal and go to e-Invoice section. Click on ‘Bulk IRN Cancel’ and upload the JSON file.