Clarification was needed regarding the use of e-invoices for registered businesses that surpass a certain turnover limit. This applies specifically to supplies made to Government Departments, Government agencies, local authorities, and PSUs that are registered solely for the purpose of deducting tax at the source, according to Section 51 of the CGST Act.
CBIC has released a new Circular No. 198/10/2023-GST on 17th July 2023 providing a clarification on the issue pertaining to the same.
Government Departments, Government agencies, local authorities, and PSUs that are obligated to deduct tax at source under Section 51 of the CGST/SGST Act must register themselves according to Section 24(vi) of the CGST Act. As a result, if a registered person’s turnover exceeds the specified threshold for e-invoice generation, they are required to issue e-invoices for the supplies made to these Government Departments, establishments, agencies, local authorities, PSUs, etc. This is in accordance with Rule 48(4) of the CGST Rules.