In the GST regime, E-Invoicing is one of the most spoken about topics for over a year now. This new invoicing mechanism was made mandatory for businesses with an annual turnover of more than INR 500 crores on 1 October 2020. Furthermore, for businesses with an annual turnover of more than INR 100 crores, e-Invoicing had to be implemented from 1 January 2021. Additionally, the Government has already enabled Sandbox testing for businesses with turnover between INR 50-100 crores. That means this section of GST registered Businesses will have to implement the e-Invoicing process mandatorily soon.
Under e-Invoicing, notified taxpayers have to generate their B2B invoices on their internal accounting system/ERP and upload them on the Invoice Registration Portal (IRP) for validation. To ensure that these invoices are interoperable, the Government has notified a standard format (e-Invoice schema) for the invoices that will be uploaded. The IRP will then verify the details in these uploaded invoices and digitally sign the invoice and send the e-Invoice back to the taxpayer with the Invoice Reference Number (IRN) and the Quick Response (QR) code.
According to the GST rules, e-Invoicing is mandatory under Rule 48, sub-rules (4), (5), and (6). If any business falls under the ambit of e-Invoicing but fails to generate the same:
Furthermore, If a business is not compliant with the e-Invoicing rules (when applicable), there can also be a significant impact on the continuity of the business. We can say so because:
To avoid these consequences, it is imperative that businesses comply with all the GST rules and issue valid e-invoices in time.