Is e-invoicing mandatory for my business and what happens if I do not generate one

Question

My turnover has crossed a certain limit and someone mentioned I now need to generate e-invoices, but I am still issuing regular invoices from my accounting software. Before I spend money on it, I want to know whether Central Goods and Services Tax Act, 2017, Rule 48(4) gives me a remedy here and what proof I would need. Any Section numbers I can quote when I write to them would be useful.

MyVakeel Legal Desk · Accepted Answer

Central Goods and Services Tax Act, 2017, Rule 48(4), Central Goods and Services Tax Act, 2017, Section 122 and Central Goods and Services Tax Act, 2017 is what decides this question in India. Read it alongside the provisions named, because the relief available to you turns on the facts you can prove on paper.

Rule 48(4) of the CGST Rules, made under the CGST Act, 2017, mandates that specified classes of registered persons whose aggregate turnover exceeds the notified threshold must prepare invoices for business-to-business supplies by uploading specified particulars to the Invoice Registration Portal and obtaining an Invoice Reference Number along with a QR code, a process commonly called e-invoicing, and the threshold has been progressively lowered over time to cover smaller businesses.

An invoice that is required to be issued as an e-invoice but is not generated through the Invoice Registration Portal is treated as not a valid tax invoice under the GST law, even if it looks like a normal invoice, which means the recipient may face difficulty claiming input tax credit on such an invoice, in addition to the supplier's own compliance exposure.

Failure to issue an e-invoice where required can attract penalty under Section 122 of the CGST Act, which covers various invoicing contraventions, and can also result in goods being detained during transit under Section 129 if the accompanying documents are found not to be a valid e-invoice where one was mandatorily required.

You should check the current notified turnover threshold, since it applies based on aggregate turnover in any preceding financial year from the appointed date of the GST law and not just the current year, meaning even a business whose turnover has since reduced can remain covered once it has crossed the threshold in any earlier year.

What to do next: 1) Check whether your aggregate turnover in any year has crossed the notified e-invoicing threshold; 2) Integrate your billing or accounting software with the Invoice Registration Portal; 3) Ensure every business-to-business invoice carries a valid Invoice Reference Number and QR code; 4) Correct past non-compliant invoices going forward to avoid credit disputes with customers.

If you are unsure whether your facts fall inside Central Goods and Services Tax Act, 2017, Rule 48(4), that is worth checking with an advocate before you commit to a route, because switching later costs time. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in tax law.