An e-invoice is a digital document used to record a commercial transaction. These documents eliminate the need for paper invoices thus considered more efficient and secure.
The GST eInvoice system recently introduced a time limit for reporting invoices on eInvoice portals. A time limit of 30 days has been imposed for reporting of invoices on the e-invoice portal from the date of invoice. This 30-day time limit is applicable for taxpayers with AATO of 100 crores or more.
Let us understand the impact of the introduction of a time limit for reporting e-invoices on businesses.
What is the e-invoice Reporting Time Limit?
Under the updated advisory, taxpayers falling into this category will not be permitted to report invoices older than 30 days from the date of reporting. The time limit extends to all documents for which Invoice reference Numbers (IRNs) are required.
Initially, a 7-day time limit was proposed by the government for such invoice reporting, which was strenuously objected to by the industry. Now, the deadline for reporting invoices on the E-invoicing portal has been extended to 30 days.
The enforcement of this new validation for reporting invoices began on November 1, 2023. Now, the taxpayers meeting the AATO criteria are required to adhere to the 30-day time frame for reporting all invoices and related documents.
This development comes as a move by the GST authority to further strengthen the GST framework while simplifying tax compliance for businesses.
How does the e-invoicing Time Limit work?
The in-built validation system will not allow taxpayers to report the invoice after a 30-day time frame. This is a significant change in the GST compliance landscape, especially for taxpayers with an aggregate annual turnover of 100 crore or more. They need to make the necessary adjustments in internal processes to meet the reporting deadline on the GST eInvoice Portal. This move aims to enhance transparency and efficiency in the e-invoicing process.
Consequences of non-compliance with the e-invoicing time limit
If the taxpayer misses the 30-day window for reporting e-invoices, credit, and debit notes they will be considered non-compliant under the GST law. There is a heavy penalty for non-compliance which includes:
• Penalty of Rs. 25,000 per invoice for incorrect invoicing.
• A penalty of Rs. 10,000 or 100% of the tax due for non-generation of e-invoice.
The time limit is targeted at taxpayers falling in the bracket of aggregate annual turnover of Rs. 100 crore or more. However, taxpayers below this threshold are not subject to this restriction.
The introduction of a time limit for reporting invoices poses new challenges for businesses falling in the AATO Threshold which makes it crucial to have ERPs or billing systems modified. This can help automate redundant compliance tasks and generate e-invoices and e-way bills instantly.
TaxPro makes e-Invoicing easy and fast with TaxPro GSP. The value-added GST eInvoice portal can generate, print, create IRN codes, and cancel e-Invoices in bulk. TaxPro GSP can be integrated within existing ERP software for bulk e-Invoicing operations.