Consequences of not generating e-invoices from 1st April 2022
Image Source: Shutterstock

The businesses having more than Rs 20 crore turnover have to start generating e-invoices from 1st April 2022. This recent extension will increase the number by 1.8 lakh businesses, and the total businesses raising e-invoices will cross 4 lakh.

As the applicability date is a few days away, you should have re-configured their ERP/accounting software to generate e-invoices. Under e-invoicing, you have to upload B2B invoices on the government portal and get authentication before sharing them with the customers/buyers. Also, the same data will be auto-populated to the GST portal and e-way bill portal.

Now, let’s see what happens if e-invoicing applies to you from 1st April 2022 and you don’t generate e-invoices.

The non-generation of e-invoice for a B2B transaction will be considered as the invoice was never issued. It leads to the below penalties for each instance:

  • Penalty for non-issuance of invoice – 100% of the tax due or Rs.10,000, whichever is higher
  • Penalty for incorrect invoicing – Rs.25,000

Invoice being the primary document/proof for a transaction, you’ll face other severe consequences. Firstly, the invoice data will not be auto-populated to your GSTR-1 and your buyer’s GSTR-2A. In this scenario, your buyer can not claim Input Tax Credit (ITC) for the tax already paid. Then the buyers will not accept the goods or make payments without a valid tax invoice being issued. Ultimately it will hamper your business.

Also, if you have transported the goods without a valid e-invoice, the department may detain the goods and the vehicle and impose a penalty accordingly. Further, the department also plans to restrict the generation of e-way bills without an Invoice Reference Number (IRN). So this will lead to further complications in generating e-way bills and movement of goods from your premises.

Hence, to avoid all these severe consequences and penalties, it is recommended to adopt a smart e-invoicing solution to integrate your ERP/accounting system with the e-invoice portal within minutes. Also, your e-invoicing solution shall be auto-scalable, fast, reliable, secure. Last but not least, your e-invoicing solution shall reduce all the reconciliation complications by managing e-invoice generation using advanced tools, insightful dashboards and reports.

For any clarifications/feedback on the topic, don’t hesitate to contact the writer at dvsr.anjaneyulu@cleartax.in.

You May Also Like

Taxation of dividend income received on or after 1 April 2020 (FY 2020-21)

You may receive a dividend from your equity or mutual fund investments.…
Gold Jewellery

24K Gold Rate in India for November 2019: Week 4

The fourth week began with the gold rate in India holding at…
GSTR-9

CBIC has notified an extension of two months to various GST compliance

The government of India has notified yet another extension for the completion…
Tax Exemption

CBDT issues guidelines under section 194Q

The income tax department issued a circular dated 30th June 2021 laying…