Note on e-invoicing

The Central Goods and Services Act, 2017 (the “GST Act”) and the rules framed
thereunder prescribe the procedure for issue of invoices by applicable taxpayers
in terms of the GST Act.

e-Invoice is a system in which B2B invoices are authenticated electronically by

GSTN for further use on the common GST portal. Under the electronic invoicing
system, an identification number will be issued against every invoice by the
Invoice Registration Portal (IRP) to be managed by the GST Network (GSTN

Under the GST 2020 regime, the e-Invoicing system was implemented from 1st
October 2020 for taxpayers with an aggregate turnover exceeding Rs.500 crore.
E-invoicing was extended to businesses with an aggregate turnover exceeding
Rs.100 crore from 1st January 2021.

On 8th March 2021, the CBIC also notified applicability of the e-invoicing system
from 1st April 2021 for businesses with total turnover ranging between Rs.50
crore to Rs.100 crore.

The government recently vide. notification No. 1/2022 Dated 24.02.2022, has
made e-Invoicing mandatory for the taxpayers with annual turnover more than
Rs.20 crores from 01st April 2022.

As per Rule 48(4) of CGST Rules, notified class of registered persons (whose
aggregate turnover in any preceding financial year from 2017-18 onwards, is
more than prescribed limit), in the instant case being more than Rs. 20 crore,
have to prepare invoice by uploading specified particulars of invoice (in FORM
GST INV-01) on Invoice Registration Portal (IRP) and obtain an Invoice
Reference Number (IRN). This is essentially the e-invoicing process.

In terms of Rule 46(r) of the CGST Rules, after following the above e-invoicing
process and receiving an IRN, a Quick Response (“QR”) code, with the IRN
embedded in it, must be included in the invoice.

The invoice copy containing inter alia, the IRN (with QR Code) issued by the
notified supplier to buyer is commonly referred to as ‘e-invoice’ in GST.

Is e-invoice signed?

While generating, the e-invoice needs to be reported to the Invoice Registration

Portal (IRP) of GST. The IRP will generate a unique Invoice Reference Number
(IRN) and adds the digital signature for the e-Invoice, along with the QR code.
The QR Code will contain vital parameters of the e-Invoice and return the same
to the taxpayer who generated the document in the first place. The IRP will also
send the signed e-Invoice to the seller on the registered email ID.
Does the e-invoice need to be signed again by the supplier?

The provisions of Rule 46 of the Central Goods and Services (CGST) Rules, 2017
apply here. According to Rule 46, the signature/digital signature of the supplier
or his authorised representative is required while issuing invoices. However, a
proviso to Rule 46 states that the signature/digital signature shall not be
required in the case of issuance of an electronic invoice that is in accordance
with the provisions of the Information Technology Act, 2000. Hence, it is
understood that in the case of e-invoices, a supplier will not be required to
sign/digitally sign the document as the IRP validates the data contained in that
invoice and generates an IRN and QR code, as well as digitally signs the invoice,
before returning it back to the supplier.

Is e-invoice mandatory for Mott MacDonald Private Limited?

As per Rule 48(5), any invoice issued by a notified person, i.e. taxpayer having a
turnover of more than Rs. 20 crore w.e.f. from 1 st April 2022, in any manner
other than the manner specified in Rule 48(4), the same shall not be treated as
an invoice.

Accordingly, in terms of the above, with effect from 1 st April 2022, every tax
payer having a turnover of more than Rs. 20 crore must follow the e-invoicing
process enumerated above and must issue only e-invoices i.e. invoices containing
the QR code with the IRP embedded in it, to the buyer.

Therefore, if Mott MacDonald Private Limited has an annual turnover above INR
20 crores it is mandatory for them to issue e-invoices.