If an e-invoice is not posted to the GST system within 30 days, there will be no input tax credit: Soon to be a new rule.

 If an e-invoice is not posted to the GST system within 30 days, there will be no input tax credit: Soon to be a new rule. 

For a broad group of GST taxpayers, the Goods and Services Tax Network (GSTN) has implemented a new rule that, as of April 1, 2025, prohibits the upload of electronic invoices that are more than 30 days old on the invoice registration portal (IRP). Businesses (sellers/suppliers) with a certain annual aggregate turnover (AATO) are required by GST law to create an electronic invoice, or "e-invoice," and submit it to the IRP portal so that the buyer can claim input tax credit. After uploading, a QR code and an invoice reference number (IRN) are produced.

Taxpayers with an AATO of Rs 10 crore or more will not be permitted to report (i.e., upload in portal) e-invoices that are more than 30 days over the deadline of reporting on IRP portals as of April 1, 2025. In an advisory dated November 5, 2024, GSTN stated that this restriction would be applicable to all document types (invoices, credit notes, and debit notes) for which an IRN is required. At the moment, only GST taxpayers having an AATO of Rs 100 crore or above are subject to this provision. However, starting on April 1, 2025, it will be applicable to a far greater number of GST taxpayers, or those with an AATO of Rs 10 crore and higher.

Taxpayers with an AATO of Rs 10 crore or more will not be permitted to report (i.e., upload in portal) e-invoices that are more than 30 days over the deadline of reporting on IRP portals as of April 1, 2025. In an advisory dated November 5, 2024, GSTN stated that this restriction would be applicable to all document types (invoices, credit notes, and debit notes) for which an IRN is required. At the moment, only GST taxpayers having an AATO of Rs 100 crore or above are subject to this provision. However, starting on April 1, 2025, it will be applicable to a far greater number of GST taxpayers, or those with an AATO of Rs 10 crore and higher.

What occurs if an electronic invoice is not posted to the IRP portal? In its advice, GSTN stated that if an electronic invoice is posted more than 30 days after the invoice's creation date, the GST portal will immediately reject it. "Invoices that are dated April 1, 2025, cannot be reported after April 30, 2025. After the 30-day period, the user would not be able to report (i.e., upload) the electronic invoice due to the validation that is integrated into the invoice registration portals (IRP). Therefore, it is crucial that taxpayers make sure they submit the electronic invoice within the 30-day window that the new time limit provides," the GSTN stated in its advice.According to experts, there could be serious repercussions if e-invoices are not uploaded to the IRP portal within 30 days.

The invoice will not be considered valid, preventing the recipient from claiming input tax credit (ITC). This can also disrupt business operations as recipients and transporters may refuse goods without a valid e-invoice. Additionally, non-compliance can lead to penalties and increased scrutiny from tax authorities," says Divya Bhushan, Tax Partner, EY India.

As per normal procedure, after an e-invoice is uploaded, the GSTN portal automatically informs the taxpayer if any GST is payable by the seller or input tax credit can be claimed by the buyer. The seller may have a delay in the related tax payment if the e-invoice is not uploaded on time, or the buyer may experience a disallowance of the input tax credit, depending on the circumstances. In certain situations, where the transaction is GST exempt, there would be no tax due and no input tax credit available. Legitimacy and account reconciliation would still be required for record-keeping purposes, nevertheless, if invoices were uploaded within the allotted period.The founder of A2Z Taxcorp LLP, chartered accountant Bimal Jain, uses an example to illustrate the idea. Assume that on April 1, 2025, Mr. A provided Mr. B with some items and sent him an invoice on the same day.

Therefore, Mr. A must upload this electronic invoice to the IRP portal by April 30, 2025, at the latest, within 30 days. An invoice registration number and QR code will be produced after the e-invoice has been uploaded. The legitimacy of the invoice may be confirmed using this QR code," explains Jain. Failure to generate an electronic invoice would result in a deficient invoice, which would violate rule 46. Brijesh Gandhi, Partner, GST Advisory, NPV & Associates LLP, states that such a failure would make invoices that are not posted invalid, which would have major repercussions, such as the recipient not being able to receive ITC.For individuals who are unable to make the 30-day deadline, chartered accountant Siddharth Surana offers a remedy. However, because it entails paying interest and a penalty, he suggests that this approach be used only as a last choice.

"The portal will prevent the generation of an electronic invoice if a taxpayer does not create one within 30 days of the document date, resulting in permanent non-compliance. GST officials may impose penalties as a result of this. In certain situations, Form GSTR-1 for the same or subsequent month must manually submit the transaction and its GST data. The tax must be paid using Form GSTR-3B in addition to this manual reporting. In addition to a penalty, interest at the rate of 18 percent per year may be applied if any tax payment is past due and not made on time. In order to prevent further fees, taxpayers are encouraged to swiftly record any missed electronic invoices manually in their GST filings, according to Surana.This advisory's effects on GST-registered taxpayers

According to GSTN, taxpayers with an AATO of less than 10 crores would not currently be subject to this reporting restriction. ET Wealth Online has consulted a number of specialists to determine the potential effects of this guidance on taxpayers who are registered for GST. What they said was as follows:

 To improve tax efficiency and reduce leakage, the e-invoice threshold limit has been lowered to Rs. 10 crore. Data accuracy is increased, manual error is decreased, and compliance is reinforced by requiring real-time data capturing and automating billing operations. A more transparent tax system with less paperwork and quicker reconciliation results from this. In the end, this promotes a more open and effective tax system that is advantageous to both the government and enterprises.