Govt waives penalties on e-invoices issued during Oct if cos get reference numbers within 30 days


The government has waived penalties on e-invoices issued during October, if companies issuing them get reference numbers within 30 days.

The one-time relaxation does not defer e-invoicing per se, but provides a breather to industry just ahead of the critical festive season.

“As a last chance, in the initial phase of implementation of e-invoice, it has been decided that the invoices issued by such taxpayers during October 2020 without following the manner prescribed under rule 48(4), shall be deemed to be valid and the penalty leviable under section 122of the CGST Act, 2017, for such non-adherence to provisions, shall stand waived if the Invoice Reference Number (IRN) for such invoices is obtained from the Invoice Reference Portal (IRP) within 30 days of date of invoice,” the Central Board of Indirect Taxes and Customs (CBIC) said in a statement late Wednesday evening.


No such relaxation would be available for the invoices issued from November 1, 2020 and such invoices would be considered invalid, inviting penalties.

Industry has been seeking voluntary e-invoicing till January 1, 2021, and make it mandatory post this limit, so as to reduce compliance burden.

Experts lauded the relaxation. “This relaxation provides the much needed relief for businesses and is a win-win for the government and businesses with neither the implementation/ anti-evasion objective being deferred nor businesses facing the penalties of non-compliance. This flexibility was a much needed one and would be significantly applauded by the industry,” said Abhishek Jain, Tax Partner, EY.

“Waiver of penalty, for one month on non compliance with B2B e-invoicing procedure is in a way an indirect extension and should definitely provide a sigh of relief to the industry,” said Harpreet Singh, partner indirect tax at KPMG India.

Companies in the FMCG, consumer durables, auto and other sectors are relying on the October to December quarter, which will have Diwali and Christmas, for revival in demand following an extended lull that began from April this year. The relief would have helped industry already suffering from the impact of the Covid 19 pandemic and the lockdowns that followed.

In a separate relaxation, the government has allowed companies with turnover more than Rs 500 crore will have till December 1 instead of October 1, to implement dynamic quick response (QR) code on their invoices issued to customers.

Customers typically scan a QR code to make digital payments. The Central Board of Indirect Taxes and Customs (CBIC) had mandated that companies must publish QR code on their invoices issued to customers.

Earlier in the month, the GST Network issued clarifications through frequently asked questions on electronic invoicing standards for businesses above Rs 500 crore turnover, where it said that a dedicated mobile app to scan and verify the validity of QR codes will be provided by the government.

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