The CBIC has notified some key changes in the e-invoicing mechanism which came into force from 1st October 2020. All businesses in India with a turnover exceeding Rs.500 crore in the preceding financial year were required to generate e-invoices, except for a few sectors who had been exempted from the same.
With the latest update, the CBIC has notified that instead of the preceding financial year, any year from the financial year 2017-18 will now be considered to determine the applicability of e-invoicing to a business. This means that if a business’ turnover has exceeded Rs.500 crore in any year from the financial year 2017-18, the business will be covered under the e-invoicing mechanism. This was notified through Notification No. 70/2020 – Central Tax, which was issued by the CBIC on 30th September 2020.
Also Read: Decoding the Revised Format of e-Invoice Notified by CBIC
The CBIC has also relaxed the time period for generating IRNs, keeping in mind the hardships faced by taxpayers due to COVID-19 lockdown. As certain taxpayers required to generate e-invoices are still not ready, the government relaxed the e-invoicing norms of uploading invoice details on e-invoice portal (i.e. the IRP), obtaining the IRN and issuing e-invoices with the QR code. These invoices will be deemed to be valid and no penalties applicable as long as the IRN for such invoices is obtained within 30 days from the date of the invoice.
In the recently concluded GST Council meeting, Finance Secretary Ajay Bhushan Pandey said that e-invoicing will soon be extended to businesses with turnover exceeding Rs.100 crore as well, from 1st January 2020. From 1st April 2021, the remaining categories of taxpayers having B2B transactions will also get covered under e-invoicing.
For any clarifications/feedback on the topic, please contact the writer at athena.rebello@cleartax.in
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