8^th August, 2023

To All Members,

Dear Friends,

Subject: Legal requirement of issuing e-invoices from 1^st August, 2023 in the case of Members having aggregate Turnover more than Rs.5 Crore in any of the F.Y. 2017-18 and onwards.

Dear Members,

As you may be aware, the GST law mandates taxpayers to issue e-invoice to their customers who are willing to avail input tax credit as B2B sales. Registered taxpayers having Turnover of above Rs.500 Crore in any of the F.Y. 2017-18 (when GST law came into operation) or onwards supplying goods or services or both to registered persons were initially required to issue e-invoices to their buyers w.e.f. 1^st October, 2020.

2.        The turnover limit of Rs.500 Crore was scaled down to Rs.100 Crore w.e.f. 01.01.2021, Rs.50 Crore from 01.04.2021, Rs.20 Crore from 01.04.2022 and Rs.10 Crore from 01.10.2022. Now, the Government vide Notification No. 10/2023-Central Tax dt. 10.05.2023 has reduced the turnover limit to Rs.5 Crore from 01.08.2023. This means that the taxpayers including the members of the Association having their turnover of more than Rs.5 Crore in F.Y. 2017-18 or 2018-19 or 2019-20 or 2020-21 or 2021-22 or 2022-23 will be required to go for e-invoicing from 1^st August, 2023.

3.        We may clarify that the turnover would include aggregate turnover of all kinds of supplies i.e., taxable supplies, exempt supplies, export of goods or services and inter-State supplies between branches / offices under the same PAN. Secondly, the turnover of all the offices of the assessee registered under single PAN across India will be clubbed together for the purpose of computing threshold limit of Rs.5 Crore. The exception being taxes viz. CGST, SGST or IGST and the value of input supplies on which tax is paid under reverse charge are excluded from the turnover of Rs.5 Crore.

4.        E-invoicing is not applicable on the following transactions:-

• Taxpayers who could not achieve turnover of Rs.5 Crore on PAN India   basis in any of the previous financial years (2017-18 onwards).
• Government Departments / local authorities and SEZ units.
• Banks, insurance companies and NBFCs.
• Goods Transport Agencies (GTA) engaged in transportation of goods by road.
• Suppliers of Passenger Transportation Services.
• B2C billing where the retail customer is not registered under GST law and therefore, not availing input tax credit benefit.
• Reverse Charge cases where GST is paid by the taxpayer as recipient of services.

5.        As regards, the requirement of issuing e-invoices by the members (tour operators / travel agents), we would like to mention the following special points:-

E-invoicing is required for B2B billing / transactions only i.e., where the supplier and recipient / customer are registered under GST law. In the case of B2C billing, the members are not required to generate and issue e-invoices. 

In the case of B2C billing, the members may continue to raise invoices as in the past.

Instances where e-invoicing may or may not be applicable for tour operators are explained below:-

E-invoicing applies to suppliers who are registered under GST law. It is not applicable to the taxpayers who are recipient of goods or services from others and are liable to pay GST under reverse charge in the notified transactions.

Whereas passenger transportation service (SAC 9964) is exempted from e-invoicing, the services of renting / hiring of motor vehicles for transport of passengers (SAC 9966) are not exempted from the requirement of e-invoicing. Hence, tour operators arranging private cabs for their tourists / clients are providing services by way of renting or hiring of motor vehicles and not providing passenger transportation services, which is usually provided by State carriages, contract carriages / chartered buses or by the Airlines. Thus, the exemption from e-invoicing would not apply for the members providing renting / hiring of motor vehicles to their B2B customers.

Tour and Travel agents issuing / arranging air-tickets for the corporates (registered under GST) will be required to issue e-invoices for their B2B customers / corporates and there is no exemption from this requirement.

E-invoicing will also be required in respect of commission charged to the hotels (B2B customers) on payment of GST / IGST.  

6.        As regards procedure and interface with the GST portal / Invoice Reporting Portal (IRP), you may consult your software team / engineer and get the ERP software integrated with e-invoicing software so that e-invoice can be directly generated from your ERP itself. 

7.        Since the requirement of e-invoicing for B2B customers is going to be implemented from 1^st August, 2023 i.e. in the middle of current F.Y. 2023-24, the serial numbering of the invoices may not be disturbed or renumbered. You may continue with the serial numbering of the invoices from 31^st July, 2023 onwards whether the invoices are B2B or B2C invoices. For instance, the invoice number used upto 31.07.2023 is 0064, you may assign the running number 0065 as document number to the invoice issued on 1^st August, 2023 and so on. This running number will be valid for B2B or B2C invoice, as the case may be. In the case of B2B invoice, the portal / ERP will generate 64-digit unique invoice number. This unique number will be a hash of supplier’s GSTIN + Financial Year + Doc Type + Doc Number. Document type are INV for invoice, CRN for Credit Note, DBN for Debit Note. The e-invoice number or Invoice Reference Number (IRN) shall be unique for every B2B invoice raised in a financial year by GSTIN in the entire GST system.

8.        We would like to update you that once e-invoice is uploaded on the IRP (Invoice Reporting Portal) and IRN is generated by this portal, e-invoice cannot be amended or modified. Such e-invoice will have to be cancelled on the IRP and the cancellation can be done only within 24 hours of generation and not afterwards. After cancellation, you may generate a fresh e-invoice in lieu of cancelled e-invoice. However, the IRP would not accept the same document number for generating fresh e-invoice.

9.        In case e-invoice is not cancelled within 24 hours, the taxpayer can issue debit note or credit note to modify the details of e-invoice already generated and issued. The data of e-invoice as well as debit / credit note will be auto-populated to GSTR-1 return that is filed by the taxpayer on the GST portal. However, we advise you to recheck the details of e-invoices before uploading the same on the IRP.

We hope you will find the above update in order and useful for invoicing to your B2B as well as B2C customers.

In case of any clarification, please write to IATO GST and Taxation Consultant

Mr. S.C. Kamra,

Advocate,

Email ID : sckamra@kamraandco.com

Thanking you and with best regards,