New 30-Day Time Limit for
E-Invoice Reporting and Reduced Turnover Threshold From 100 Cr. To 10 Cr. : GST
Advisory Update
By Yogesh Verma (CS/LLB) / 2 min read / GST Article
Introduction: In a recent advisory dated November 5, 2024, the GST Network
(GSTN) announced an update to the e-invoicing requirements that affects a large
number of businesses. Effective from April 1, 2025, all taxpayers with
an Annual Aggregate Turnover (AATO) of ₹10 crores and above will be
required to report e-invoices on the Invoice Registration Portal (IRP) within 30
days from the date of the invoice. This update introduces a stricter
timeline for e-invoice reporting and aims to enhance compliance, transparency,
and accountability in the GST ecosystem.
Key Points of the Recent E-Invoicing
Advisory
1.
30-Day
Reporting Time Limit:
o From April 1, 2025, businesses with a turnover of ₹10 crores
and above must report e-invoices within 30 days from the invoice date.
This limit applies to all document types for which an Invoice Reference Number
(IRN) is generated, including invoices, credit notes, and debit notes.
2.
Lowered
Turnover Threshold:
o The turnover threshold for mandatory e-invoicing has been
lowered from ₹100 crores to ₹10 crores, making this requirement applicable to a
larger number of businesses across various industries.
3.
Automatic
Validation and Restriction:
o The IRP will validate the e-invoice based on the date,
disallowing the reporting of invoices that exceed the 30-day window. For
instance, an invoice dated April 1, 2025, must be reported no later than April
30, 2025, to comply with the new rule.
4.
Exemptions
for Small Businesses:
o Businesses with an AATO below ₹10 crores remain exempt from
the 30-day reporting restriction and may continue to report invoices without
this time constraint.
Impact on Businesses
1. Stricter Compliance Requirements
- The
new 30-day reporting window necessitates that businesses monitor their
invoicing and reporting timelines more closely. Delays in reporting could
lead to non-compliance, affecting tax filing and Input Tax Credit (ITC)
claims.
2. ERP and System Adjustments
- Businesses
must ensure their ERP and accounting systems are updated to track the
30-day timeline and enable seamless integration with the IRP to avoid
manual errors and delays.
3. Training and Internal Processes
- Staff
responsible for invoicing and GST compliance will require additional
training to manage the new timeline effectively. Many businesses may need
to revise internal workflows to guarantee timely submission.
4. Faster ITC Processing for Buyers
- Timely
e-invoicing can speed up ITC availability for buyers, improving cash flow
and financial planning.
Step-by-Step Process for E-Invoicing
Within the New Time Limit
1.
Generate
Invoice:
o Use your business’s existing software to create the invoice
in the prescribed e-invoice format (FORM GST INV-01).
2.
Convert to
JSON and Send to IRP:
o Submit the invoice details to the IRP in JSON format.
3.
IRP
Validation and Authentication:
o The IRP will validate the invoice details and assign a
unique IRN along with a QR code. If the invoice is submitted within 30 days,
the IRP will generate and return the validated e-invoice to the business.
4.
Data Sync
with GST and E-Way Bill Systems:
o The IRP automatically shares the validated e-invoice with
the GST and e-way bill systems, simplifying further compliance steps.
5.
Issue
E-Invoice to Buyer:
o Provide the authenticated e-invoice, with IRN and QR code,
to the buyer within the 30-day timeframe.
Benefits of the Updated E-Invoicing
Time Limit
1.
Improved
Compliance and Standardization:
o The uniform 30-day limit ensures timely reporting,
minimizing discrepancies and making GST compliance more efficient.
2.
Enhanced
Transparency and Reduced Tax Evasion:
o Real-time reporting strengthens the tracking of invoices and
reduces the risk of tax evasion, providing greater transparency to tax
authorities.
3.
Streamlined
ITC Claims:
o The faster reporting enabled by the new rule benefits buyers
with timely ITC processing, allowing smoother cash flow and reconciliation.
4.
Reduced
Errors and Audit Risks:
o The restriction reduces the chances of errors or missed
reporting periods, decreasing the likelihood of audit risks or penalties.
Preparations for Compliance by April
1, 2025
Businesses should prepare by:
- Updating
ERP Systems: Make sure that the ERP system
is capable of managing the 30-day reporting window automatically.
- Internal
Audits: Regularly audit e-invoicing
practices to identify and rectify any process gaps.
- Employee
Training: Conduct training sessions for
staff to ensure they are aware of the new timeline and reporting
requirements.
- Routine
Checks and Alerts: Set
up notifications or alerts within systems to remind relevant personnel of
approaching reporting deadlines.
Conclusion: The revised advisory on e-invoicing introduces a
significant update for GST-compliant businesses with an AATO of ₹10 crores and
above. By imposing a 30-day reporting limit and reducing the turnover
threshold, the GSTN aims to streamline compliance and enhance transparency.
Businesses must proactively update their systems and processes to adapt to this
change by April 1, 2025, ensuring they remain compliant while reaping the
benefits of faster ITC processing and reduced compliance risk.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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