Checking vendor compliance in e-Invoicing

E-invoicing was implemented in India with the purpose to reduce tax evasion. E-invoicing facilitates real-time data availability with the tax officials and authentication of invoices by Invoice Registration Portal before carrying out a transaction. This reduces the scope of fake invoices, and thus only genuine Input Tax Credits can be claimed by the taxpayers. So, buyers must check if their suppliers are e-invoicing compliant.

Latest Updates on e-Invoicing

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.

How to check if a GSTIN is required to raise an e-invoice?

E-invoicing was implemented in a phased manner in India. It was made applicable to all businesses with turnover greater than Rs. 500 crore from 1st October 2020. Later it was made applicable to businesses with turnover greater than Rs. 100 crore from 1st January 2021.

e-invoicing then became applicable to all businesses with turnover greater than Rs.50 crore in any of the financial years from FY 2017-2018 from 1st April 2021 except a few categories of taxpayers who are exempt from e-invoicing vide notification No. 13/2020- Central Tax. Any person, whether or not registered under GST, can use a facility on an e-invoice portal where a list of GSTINs generating IRNs are hosted and updated regularly.

Currently, it applies to those with a turnover limit of more than Rs.20 crore since 1st April 2022. From 1st October 2022, it shall apply to those with a turnover limit of Rs.10 crore.

A taxpayer shall follow the steps mentioned below to go to this link:

Step 1: Visit the e-invoice portal.
Step 2: Go to the search tab and select “GSTINs generating IRN”.

‘GSTINs generating IRN’ page will be displayed.

Click on the ‘Download’ button for one to download the excel file from here. 

Also, this list keeps on updating, so one can refer to the last updated date before downloading the file. This list will help the taxpayer to find out if a particular GSTIN is listed or not for generating IRN. 

Here is a direct link: https://einvoice1.gst.gov.in/Others/GSTINsGeneratingIRN

How to know if e-invoicing is enabled for a GSTIN?

A taxpayer shall ensure the applicability of e-invoicing to its vendors. He can search the status of e-invoice enablement on the e-invoice portal at https://einvoice1.gst.gov.in/Others/EinvEnabled.

A taxpayer shall follow the below steps:

Step 1: Visit the e-invoice portal.
Step 2: Go to the search tab and select “e-invoice status of taxpayer”.

Step 3: Enter the GSTIN and the captcha code. Click Go.

This status is based on the turnover reported by a GSTIN in its GSTR-3B. However, it should be noted that the enablement status on the e-invoice portal doesn’t mean e-invoicing is applicable to a particular taxpayer. If a particular category of the taxpayer is exempt from e-invoicing, then the e-invoicing enablement status can be ignored.

Ways to find if a vendor is non-compliant with e-invoicing norms

ITC is ineligible in the hands of the recipient if a proper e-invoice is not issued by its vendor to whom e-invoice is applicable. So, it is very important for a taxpayer to check whether the vendor is compliant with e-invoicing norms. He can check the below fields in the e-invoice to ensure compliance-

• Invoice Reference number- A taxpayer sends invoice information to the GSTN for validation. At this time, this field will be empty, but after verification by the GSTN, an acknowledgement will be sent to the taxpayer along with the invoice reference number. Hence, the buyer must look for the IRN to appear on the invoice that is sent to him.
• QR code- The invoice and QR code should be digitally signed by the Invoice Registration Portal. The QR code should appear on the invoice that is sent to the buyer. The buyer can, in turn, use the QR code verifying app to either scan the QR code or upload a JSON file, where it is available from his ERP system. Thereafter, a valid QR code shall provide details of the invoice such as GSTIN of the invoice number, supplier and buyer, date of invoice generation, HSN code, invoice value, unique invoice reference number and the digital signature of IRP.
• Supplier’s GSTIN and legal name- The same should be mentioned in the e-invoice. Buyer can use the ClearTax GSTIN verifying tool to search and validate a GSTIN easily.

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