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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.