Businesses with AATO of ₹10 Cr and above Must Report e-Invoices Within 30 Days
TALK TO EXPERTS
Starting from April 1, 2025, businesses with an Annual Aggregate Turnover (AATO) of ₹10 Crore or more must report e-Invoices, including invoices, credit notes, and debit notes, within 30 days of issuance on the Invoice Registration Portal (IRP). For instance, an invoice dated April 1, 2025, must be reported no later than April 30, 2025.
Overview of the New Compliance Requirement
In an effort to strengthen compliance and optimize the e-invoicing framework under GST, the Goods and Services Tax Network (GSTN) has introduced a mandatory time limit for reporting e-invoices. The revised guideline, effective from April 1, 2025, lowers the turnover threshold for this requirement from ₹100 Crore to ₹10 Crore in AATO.
Key Changes in the Advisory
Previous Restriction for Businesses with ₹100+ Crore AATO
According to an advisory issued on September 13, 2023, businesses with an AATO of ₹100 Crore or more were required to report e-Invoices within 30 days of issuance. Any invoice, credit note, or debit note exceeding this timeframe was not permitted for reporting on the IRP.
Expansion to Businesses with ₹10+ Crore AATO
With the latest directive released on November 5, 2024, the threshold has been lowered to ₹10 Crore. As a result, from April 1, 2025, businesses falling under this category will be unable to generate an Invoice Reference Number (IRN) for any invoice, credit note, or debit note that exceeds 30 days from its issuance date.
Implementation Timeline
To allow businesses sufficient time to adapt to the new regulation, the implementation is scheduled for April 1, 2025. This transition period ensures that affected taxpayers can update their invoicing systems and workflows accordingly.
No Impact on Businesses Below ₹10 Crore AATO
This new compliance requirement does not apply to businesses with an AATO of less than ₹10 Crore. Such businesses can continue reporting e-Invoices without any specific time restriction.
Understanding e-Invoicing Under GST
E-invoicing is an electronic mechanism for authenticating invoices, ensuring that all business transactions are recorded with the GSTN and reported to the central GST portal. Initially designed for large corporations, the e-invoicing mandate has gradually been expanded to include small and medium-sized enterprises (SMEs).
Unlike conventional invoice generation directly on the GST portal, businesses prepare invoices through their internal accounting systems and then upload them to the IRP. The portal validates each invoice and assigns it a unique Invoice Reference Number (IRN), ensuring its authenticity. This validated data is then automatically shared with the GST and e-way bill portals, reducing manual data entry and enhancing compliance accuracy.
Benefits of the 30-Day e-Invoice Reporting Limit for SMEs
The extension of the 30-day reporting mandate to businesses with an AATO of ₹10 Crore brings multiple benefits:
- Reduced Compliance Burden: SMEs now have a defined timeframe for reporting e-Invoices, minimizing last-minute rush and potential non-compliance.
- Enhanced Cash Flow Management: By providing additional time for reporting invoices, businesses can manage their cash flow more effectively, improving financial planning.
- Encouraging Adoption of E-Invoicing: The extended timeframe is expected to drive wider adoption of the e-invoicing system among SMEs, fostering greater transparency and operational efficiency.
Consequences of Failing to Report Within 30 Days
Failing to adhere to the 30-day reporting limit may result in significant challenges for businesses:
- Invoice Rejection by IRP: If an invoice is submitted beyond the stipulated timeframe, it will be automatically rejected, making it impossible to generate an IRN.
- Need for Re-Issuance: Businesses will be required to regenerate invoices, leading to potential confusion, duplication, and additional administrative efforts.
- Delays in Cash Flow and ITC Processing: Late reporting may hinder the seamless processing of input tax credits (ITC), which could impact relationships with vendors and customers.
- Risk of Penalties and Non-Compliance Issues: Consistent non-adherence to reporting timelines can trigger GST audits, legal notices, and financial penalties, adding to the compliance burden.
Final Thoughts
To comply with the revised e-invoicing regulations, businesses must ensure timely reporting of invoices. Implementing a structured invoicing system will not only help prevent penalties but also streamline overall GST compliance. Staying informed about regulatory updates and adopting efficient invoicing practices will enable businesses to manage compliance obligations effectively and avoid potential disruptions.