GST Update on E-Invoice Applicability from 01st April 2022

This article is written to update our kind readers on E-Invoice Applicability from 01st April 2022 that has been made mandatory from 1st April 2022 for the Notified class of registered persons (i.e., Other than those exempt as provided below) having an aggregate turnover of INR 20 crore or more in any preceding financial year from 2017-18 onwards. The Ministry of Finance on 24th February 2022 has reduced the e-invoice turnover limit from Rs. 50 crores to Rs. 20 Crore with effect from 1st April 2022, by way of issuing Notification No. 01/2022- Central tax dated 24th Feb 22.

E invoice turnover limit & effective date history

The turnover limit for applicability of e-invoicing and history of change in turnover criteria for generating e-invoice is as follows:

Notification No.Effective Date of e-invoice applicabilityTurnover Limit for E-invoice
N. No. 13/2020 dated 21st Mar 20201st October 2020Turnover higher than Rs.100 crore in a year (later modified)
N. No. 61/2020 dated 30th Jul 20201st October 2020Turnover limit was increased from Rs.100 crore to Rs. 500 crore
N. No. 88/2020 dated 10th Nov 20201st January 2021Turnover limit reduced to Rs.100 crores from Rs. 500 crore
N. No. 05/2021 dated 08th Mar 20211st April 2021Turnover limit reduced to Rs. 50 crore from Rs. 100 crore
N. No. 01/2022 dated 24th Feb 221st April 2022Turnover limit reduced to Rs. 20 crore from Rs. 50 crore

Exemption from E-invoice applicability from 01st April 2022

The following sectors/entities are exempt from E-invoicing:

  • Special Economic Zone Units (including FTWZs),
  • Insurer or a banking company or a financial institution, including a non-banking financial company,
  • Goods transport agency supplying services in relation to transportation of goods by road in a goods carriage,
  • Suppliers of passenger transportation service,
  • Suppliers of services by way of admission to exhibition of cinematograph films in multiplex screens.

Supplies covered under applicability of e-invoices

Following Supplies by notified class of taxpayers are covered under e- invoice:

  • Supplies to registered person (B2B)
  • Supplies to SEZs
  • Export (With/without payment)
  • Deemed export 

It is also applicable in the below-mentioned cases (for entities having aggregate turnover exceeding the above limit i.e., notified person) :

  • Supply to Govt. department having a GSTIN (as entity supplying goods/services/ deducting TDS).
  • Invoices between two different GSTINs under same PAN
  • Invoices issued by SEZ Developers
  • Invoice issued by notified person to SEZ units
  • Invoices issued by notified person for supplies made by him but attracting reverse charge under Section 9(3)

Supplies covered under applicability of e-invoices

Following Supplies by notified class of taxpayers are not covered under e- invoice:

  • NIL-rated or wholly-exempt supplies
  • Supplies to unregistered person (B2C)
  • Financial/commercial credit notes
  • Invoices issued by Input Service Distributors (ISDs)
  • High sea sales and bonded warehouse sales
  • Supplies to Government Departments where they don’t have any registration under GST
  • Where supplies are received by notified person from an unregistered person attracting reverse charge under Section 9(4) or through import of services

Documents covered under e-invoice

Following documents (issued by Notified persons) are covered under e invoice:

  • Invoices
  • Credit notes
  • Debit Notes

Hence, in case your turnover exceeds the notified limit and does not fall in the criteria of the exempt supplier, issuing e-invoicing from 01st April 2022 is mandatory. Hence, necessary preparation is required to be done beforehand to ensure proper GST compliance from the applicable date.

Further, in case you receive any inward supplies from a notified person requiring to issue e-invoice, please ensure such person issues e-invoice to you otherwise ITC availed by you based on invoice (other the e-invoice) will become invalid. Therefore, we suggest you to take prior declaration(attached along) from your vendors regarding the applicability of E-Invoicing on them so as to avoid disallowance of ITC.

E-invoicing turnover limit from 01st April 2022 Notification

Download Notification

Disclaimer: the above note is based on Notifications, FAQs etc issued till date. In case of details understanding of provisions, you may refer to Act/Rules/Notification etc issued by Government.

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