e-Invoicing is a system where notified businesses crossing a turnover limit of Rs.10 crore have to mandatorily generate invoices in an electronic and standardised format. While enterprises raise these invoices on their own ERP solutions, the same need to be uploaded to and validated by the Invoice Registration Portal, also known as the IRP.
Until now, there was no restriction on when this validation and e-invoice generation could take place. Most large enterprises in India typically generate e-invoices in real-time, while smaller enterprises may opt to consolidate and generate e-invoices in bulk at a later date. However, for the first time since the introduction of e-invoicing, the government has imposed a time limit on the reporting of e-invoices to the IRP.
According to the recent GSTN advisory, the government has imposed this time limit restriction on taxpayers with an annual aggregate turnover (AATO) of Rs.100 crore and above. Such taxpayers will not be allowed to report invoices older than seven days as on the date of reporting. It is important to note here that this time restriction applies to all document types for which an Invoice Reference Number (IRN) needs to be generated.
For example, for an invoice dated 1st May 2023, there will be time up to 8th May 2023 to upload and validate the same on the e-invoice portal. Post 8th May 2023, there will be no option to generate an e-invoice. Validations built into the IRP will disallow the user from reporting such invoices after the seven-day window has elapsed. Hence, it is critical that these notified taxpayers ensure timely reporting within this seven-day window.
To allow taxpayers sufficient time to comply with this new requirement and make changes to their accounting and ERP systems, the government proposes to implement this restriction from 1st May 2023. This move was introduced in a bid to ensure timely compliance and pushes e-invoicing-eligible enterprises to look at incorporating real-time e-invoice generation solutions.
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