14 April 2023
Restrictions on generating IRN & QR codes while raising e-invoices on IRP Portal(s)
  • The Indian Government has recently issued an advisory to impose restrictions on reporting of invoices on the Invoice Registration Portal (IRP) to ensure timely compliance.
  • The advisory states that all taxpayers with an aggregate annual turnover greater than or equal to INR 100 crores (INR 1 billion) shall not be allowed to report invoices older than seven days from the date of reporting. For instance, for an invoice dated 1 June 2023, the Invoice Reference Number (IRN) & QR code cannot be generated after 8 June 2023.
  • The said restriction is applicable for all types of documents including Debit/Credit Notes for which IRN & QR code is required to be generated.
  • The above advisory shall not have any impact on reporting of invoices by taxpayers having an aggregate annual turnover amounting to less than INR 100 crores (INR 1 billion).
  • The restriction shall be imposed from 1 May 2023 onwards.
Our Comments
 
With the above restriction, the government wants to restrict the back-dating of e-invoices by large taxpayers and ensure timely compliance. The above change will also help in the timely passing on of Input Tax Credit (ITC) to recipients. A few important points to ponder are mentioned below:
  • Immediate actions should be taken on invoices for which the taxpayers missed the time limit on account of genuine reasons in the initial phase of such restriction being imposed.
  • There will be a change in the current process being followed for taxpayers whose billing systems are not integrated with the IRP and where the activity of generation of e-invoices was separately carried out after the month-end.
  • Set up internal processes in case the time limit of seven days is missed due to genuine reasons.
  • Reconcile the Sales Register with the e-invoice database for earlier tax period(s) and ensure that IRN and QR codes are generated for all pending transactions as the same may not be allowed after 1 May 2023.
  • As a recipient, follow up with vendors/suppliers who are liable to issue e-invoices but have not generated e-invoices. This is required so that there is no dispute in the near future that may lead to the disallowance of ITC.
  • The industry can expect similar restrictions for taxpayers with turnover amounting to less than INR 100 crores (INR 1 billion), which will be implemented in a phased manner.
USA | Canada | Poland | UAE | India | Hong Kong | Japan
DISCLAIMER
This alert contains general information which is provided on an "as is" basis without warranties of any kind, express or implied and is not intended to address any particular situation. The information contained herein may not be comprehensive and should not be construed as specific advice or opinion. This alert should not be substituted for any professional advice or service, and it should not be acted or relied upon or used as a basis for any decision or action that may affect you or your business. It is also expressly clarified that this alert is not intended to be a form of solicitation or invitation or advertisement to create any adviser-client relationship.

Whilst every effort has been made to ensure the accuracy of the information contained in this alert, the same cannot be guaranteed. We accept no liability or responsibility to any person for any loss or damage incurred by relying on the information contained in this alert.

© 2023 Nexdigm. All rights reserved.