Decoding GST Compliance – FAQs

GST e-invoicing originally came into force on 1st October 2020 for business with annual turnover exceeding INR 500 crore. It was then extended to businesses exceeding annual turnover of INR 100 crore and came into effect on 1st January 2021. Coming back to the present, the new mandate of GST e-invoicing now includes businesses having a turnover of INR 50+ crore. It is set to come to effect from 1st April 2022.

And it has been far from easy for businesses to adapt and comply with it. Mostly on the software front as their old & current software isn’t equipped to deal with GST e-invoicing to begin with. Complicating matters is the fact that businesses will attract penalties if they fail to comply with the mandate. This has left many scrambling to search for a software that helps them comply with the mandate.

While having the right software like GST One is a big part of compliance with the rules, we also need to address queries that are still linger in regards to E-invoicing and GST Returns.

And we are here to answer some of them here.

Q- What is a GST Return?

A return is a document that contains the income details of a taxpayer. The taxpayer is liable to file it with the tax administrative authorities and it is to calculate the tax liability of the taxpayer.

Here’s what a registered dealers has to file under GST returns:

  • Purchases
  • Sales
  • Output GST (On sales)
  • Input tax credit (GST paid on purchases)

In order to file GST returns, sales and purchase invoices that are GST compliant are necessary.

Q- Prerequisites to generate an e-invoice?

Here are the prerequisites for generation of e-invoices:

  • The person/business generating an e-invoice should be registered on the GST portal and e-invoice or e-way bill portal.
  • There should be a valid document to report, such as an invoice, debit note, or credit note available with him.
  • If the taxpayer is generating e-invoices in bulk, then he should have a valid JSON file as per the e-invoice schema, or should have integrated his ERP system with APIs.

Q- How will the e-Invoicing model work?

Businesses will continue to generating invoices on their respective ERPs, just as before. The only difference is in the standard, schema and format for the generation of the invoices. It has been specified in order to ensure a level of standardisation and the machine-readability of these invoices.

Generated e-invoices need to be reported to the Invoice Registration Portal (IRP) of GST. The IRP will then generate a unique Invoice Reference Number (IRN) and will add digital signature and QR code for the invoice. The QR Code will contain vital parameters of the e-Invoice and return the same to the taxpayer who generated the document. The IRP will also send the signed e-Invoice to the seller on the registered email ID.

Q- Who should & should not file GST Returns?

All businesses & owners/dealers with a turnover of INR 50+ crore are required to file GST returns. There are some exemptions though. As notified in the CBIC Notification No.13/2020, e-invoicing is not be applicable to the following categories of registered persons, irrespective of the turnover:

  • An insurer or a banking company or a financial institution, including an NBFC
  • A Goods Transport Agency (GTA)
  • A registered person supplying passenger transportation services
  • A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services
  • An SEZ unit (excluded via CBIC Notification No. 61/2020 – Central Tax)
  • A government department and local authority (excluded via CBIC Notification No. 23/2021 – Central Tax)

Q- How will imports & exports be taxed under GST?

Imports of goods and services will be treated as interstate supplies, and IGST will be levied. Exports will be handled as zero-rated supplies. No tax will be payable on exports of goods or services; however, input tax credit (ITC) will be refundable to the exporters.

Q- What results in Non-Compliance & the consequences of it?

Non-compliance happens when:

  • The buyer is refused or isn’t issued an e-invoice is not issued to the buyer
  • Eligible invoices not reported to the IRP.
  • Also as per the CGST Rule 48(5), invoices will be considered invalid if issued without IRN.

As for the consequences, there are more than a few heavy ones a business can attract for non-issuance of invoice or incorrect invoicing. They are:


  • Heavy penalties of up to INR 10,000 per invoice is applicable.
  • Incorrect E-Invoicing could invite penalties of up to INR 25,000.

Hindrance in E-Way Bill Generation

  • As per the latest regulations and IRN is a must to generate E-way bills. You won’t have an IRN if you don’t generate e-invoices.
  • Goods will be detained and their movements hit due to no e-way bills & will attract additional penalties being levied.

We hope the information we have provided above helps clear some of your queries regarding GST E-invoicing compliance. And we also hope that you are ready to comply with it as the 1st April 2022 deadline is right around the corner.

In case you aren’t or are still looking for an ERP software that will help you comply with the e-invoicing mandate, then we advise you to check out GST One. It is a SAP Business One add-on developed specifically to handle everything e-invoicing, e-way billing & more. You can generate b2b e-invoices & e-way bills with IRN, do bulk operations, use & create custom templates, even get data reconciliation done through it.

Get in touch with us today to know more about GST One and be GST e-invoicing ready & compliant.

Want more helpful information about processes in SAP Business One? Or would you like a more in-depth understanding of SAP Business One? Then get in touch with Accelon - a Certified SAP Business One Gold Partner & the most reliable ERP software provider in India.

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