The applicability of e-invoicing for a business is determined by its aggregate turnover, and as the regulatory landscape evolves, compliance requirements have undergone transformative shifts. In this article, we explore the latest development in the realm of e-invoicing with the introduction of the “E-invoice Exemption Declaration Functionality.”
This new feature has been made available on the e-Invoice portal to cater specifically to taxpayers who are by default enabled for e-invoicing but are exempted from implementing it under the Central Goods and Services Tax (CGST) Rules. We delve into the significance of this functionality, its benefits for exempted businesses, and the implications it holds for the broader e-invoice ecosystem.
The E-invoicing Mandate
As per GST Notification 10/23, the E-invoice Mandate has been extended to encompass companies with a turnover exceeding Rs. 5 crores from 1st August 2023. This development highlights the crucial importance of generating E-invoicing under GST for organizations, as the consequences of non-compliance with e-invoicing could lead to heavy penalties.
Exemptions from E-invoice Mandate
According to Rule 48(4), the following classes of people are exempt from the e-invoice mandate and need not generate an e-invoice under GST.
- Banks, Insurance Companies, and Financial Institutions including but not limited to NBFCs.
- Goods Transport Agency
- Passenger Transport Services
- Supplier of Services by way of admission to the exhibition of films.
- Special Economic Zones (SEZ) Units. (Note: E-invoicing is applicable to Economic Zone Developers)
"I/We hereby declare that though our aggregate turnover in any preceding financial year from 2017-18 onwards is more than the aggregate turnover notified under sub-rule (4) of rule 48, we are not required to prepare an invoice in terms of the provisions of the said sub-rule."
Read about Invoice Printing: Process, Mandatory Fields, Modes of IRN generation
E-invoice Exemption Declaration Functionality: New GSTN Advisory
E-invoicing under GST is crucial for making an invoice legally valid. Businesses have been seeking confirmation from their vendors regarding e-invoice applicability. A new feature on the GST portal allows businesses to declare their exemption status, but it will not override the enablement status.
The new GSTN advisory states that the E-invoice Exemption Declaration Functionality is now available on the e-Invoice portal and is optional. This feature is specifically for taxpayers who have to use e-invoicing but are exempted from doing so under the CGST (Central Goods and Services Tax) Rules.
Here are the main points about this feature
- The E-invoice Exemption Declaration is optional and can be accessed on the e-invoice portal.
- This feature is for taxpayers who are exempt from e-invoicing as per the CGST Rules.
- It’s important to know that making a declaration using this feature will not change the taxpayer’s e-Invoice status.
- The responsibility to decide on exemptions based on Government Notifications and report it on the portal lies with the taxpayer.
- The facility to report exemption declaration is there to make business processes easier.
As the e-invoice mandate extends to businesses with a turnover exceeding Rs. 5 crores, a new batch of companies will begin their e-invoice journey. Exempt businesses should be aware that, besides declaring their exemption status on the GST portal, their invoices must also contain a specific declaration confirming their exemption despite crossing the threshold. For e-invoicing veterans, it’s time to streamline the purchase side of the process to ensure a seamless invoicing system. Addressing both sales and purchase sides will enhance efficiency and compliance in this evolving invoicing landscape.
In conclusion, the “E-invoice Exemption Declaration Functionality” streamlines the process for exempted taxpayers to declare their status. Compliance and transparency are vital as businesses embark on their e-invoice journey, ensuring a more efficient invoicing landscape. Incorporating this new feature on the e-Invoice portal empowers businesses to navigate the changing invoicing landscape with ease. By adhering to the declaration requirements and embracing the advancements in electronic invoicing, organizations can achieve seamless operations.
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