Eligibility for e-invoices

It is important to follow government guidelines, and failing to do so can lead to penalties, and unnecessary loss of time, and money. With the introduction of the new e-invoicing law by the government, all eligible taxpayers for this are required to generate e-invoices that are pre-validated through the government portal and provided with a unique IRN and a QR code. 

Therefore as a business owner, one needs to check if they are eligible for e-invoices and adhere to the compliances in case you are. 

As a recipient of services, one should ideally check if their supplier is eligible for e-invoices, and validate receipt of e-invoices in such cases. Failure to this can lead to a break in the GST process and would require additional time, and costs opportunity. 

What is the eligibility for e-invoices? 

e-Invoicing has been made applicable from 1st October 2020 to all businesses whose aggregate turnover has exceeded Rs.500 crore limit in any of the preceding financial years from 2017-18 to 2019-20. 

Notification No.61/2020 – Central Tax prescribed the turnover limit for the implementation of e-Invoicing from 1st October 2020. Notification No.71/2020 – Central Tax prescribes the time period considered for determining eligibility under e-Invoicing.

Further, from 1st January 2021, e-Invoicing will be applicable to businesses exceeding the Rs.100 crore turnover limit in any of the financial years between 2017-18 to 2019-20, as intimated in Notification No.88/2020 – Central Tax.

On 8th March 2021, the CBIC notified that e-Invoicing will be applicable from 1st April 2021 for businesses with a turnover of more than Rs.50 crores (in any financial year from FY 2017-18 onwards, as intimated in Notification No. 5/2021 – Central Tax.

How to check  if we are eligible for e-invoices 

  • Check for the eligibility on this link
  • Enter basic details such as GST number, company name, taxpayer type, and the displayed captcha
  • With just these details, one will be notified if they are eligible for e-invoices or not 

There are multiple advantages of checking for e-invoices – It saves time, it allows people to check for e-invoice eligibility of their suppliers, and this also helps you validate the trustworthiness of an existing business. 

How to apply for e-invoices? 

All eligible GST taxpayers who need to generate IRNs and QR codes should register on the trial e-invoice system using their GSTIN. The taxpayers who are already registered on the e-way bill portal can use EWB credentials for login and need not register on the e-invoice system again. 

One can first check for their eligibility on the link, and if they are eligible, in such cases they can follow these steps to successfully create e-invoices. 

Who is exempted from e-invoices? 

There are some exemptions that the government has stated. These business entities will not be required to share generate e-invoice,s and can operate like before. 

  • Insurance Companies
  • Banking Company or a Financial Institution, including a Non-Banking Financial Company (NBFC)
  • Goods Transport Agency (GTA) transporting goods by road in a goods carriage
  • Transport service provider, providing passenger transportation service
  • Registered person providing services of – admission to an exhibition of cinematograph films on multiple screens
  • Special Economic Zone (SEZ) units
  • Free Trade & Warehousing Zones (FTWZ)