Indirect Tax Alert: GST: One-time relaxation in implementation of E-invoice

E-invoicing under GST- Implementation phase

The government had in December 2019 prescribed that GST taxpayers having an aggregate annual turnover of more than INR 01bn in any preceding Financial Year would be required to issue e-invoices for all Business to Business (B2B) supplies, in the manner prescribed under rule 48(4) of the CGST Rules, 2017 w.e.f. 01 April 2020. Further, it was also mandated under rule 48(5) of the CGST Rules, 2017 that a B2B invoice or an export invoice issued by such a taxpayer, in any other manner, shall not be treated as an invoice. In March 2020, the date of implementation of e-invoice was extended to 01 October 2020. Keeping in view the hardships faced by the taxpayers due to COVID-19, in July 2020, it was further prescribed that taxpayers having an aggregate turnover of INR 05bn and above only would be required to issue e-invoices w.e.f. 01 October 2020.

Taxpayers’ preparedness and relaxation of penal provisions for specified period

It has been reported that even after more than 9 months of the first notification, some taxpayers having aggregate turnover of INR 05bn and above are still not ready. Accordingly, as a last chance, in the initial phase of implementation of e-invoice, it has been decided that the invoices issued by such taxpayers during October 2020 without following the manner prescribed under rule 48(4), shall be deemed to be valid and the penalty leviable under section 122 of the CGST Act, 2017, for such non-adherence to provisions, shall stand waived if the Invoice Reference Number (IRN) for such invoices is obtained from the Invoice Reference Portal (IRP) within 30 days of the date of invoice.

The same is illustrated with an example: In case a registered person has issued an invoice dated 03 October 2020 without obtaining IRN but reports the details of such invoice to IRP and obtains the IRN of the invoice on or before 02 November 2020 then it shall be deemed that the provisions of rule 48 (5) of the CGST Rules, 2017 are complied with and the penalty imposable under section 122 of the CGST Act, 2017 shall also stand waived. Relevant notifications are yet to be released by the government.

It may be noted that no such relaxation would be available for the invoices issued from 01 November 2020 and such invoices issued in violation of rule 48(4) of the CGST Rules 2017 would not be valid and all the applicable provisions of CGST Act and Rules would apply for the said violation.

[ Press release dated 30 September 2020, by CBIC]