The Central Board of Indirect Taxes and Customs (CBIC) furnished a vide circular no. 198/10/2023-GST dated July 17th, 2023 describing the obligatory e-invoice for the GST-registered individuals towards the Supply to Government departments in accordance with the suggestions of the 50th GST Council.
Clarification has been asked for the application of e-invoicing under rule 48(4) of the Central Goods and Services Tax Rules, 2017 (referred to as the “CGST Rules”) for the supplies that have been made by a registered person, as per the board.
These supplies have been incurred for the Govt Departments, establishments, govt agencies, local authorities, or Public Sector Undertakings (PSUs) that are registered exclusively for the objective of tax deduction at source (TDS) under the provisions of Section 51 of the Central Goods and Services Tax Act, 2017 (CGST Act).
The Board, acting in accordance with its authority granted by section 168 (1) of the CGST Act, hereby explains the matter as follows in order to address it and promote consistency in the application of the law’s requirements across the field formations:
Whether e-invoicing would be applied to the supplies made via the registered person, whose turnover would be more than the prescribed limit towards the generation of e-invoicing, to Govt Departments or establishments/ Govt agencies/ local authorities/ PSUs which are registered exclusively for the objective of deduction of tax at source under provisions of section 51 of the CGST Act?
The CBIC, the Govt Departments or establishments/ Government agencies/ local authorities/ PSUs, that needs to deduct tax at source under the provisions of section 51 of the CGST/SGST Act, are responsible for mandatory registration as per section 24(vi) of the CGST Act. Hence the Govt Departments or establishments/ Government agencies/ local authorities/ PSUs, registered exclusively for the objective of deduction of tax at source according to the provisions of section 51 of the CGST Act, would be deemed as registered individuals under the GST law according to the provisions of clause (94) of section 2 of CGST Act.
Therefore, the registered person, whose turnover would be more than the specified limit for the generation of GST e-invoicing, is needed to provide the e-invoices for the supplies that have been provided to these Govt Departments or establishments/ Govt agencies/ local authorities/ PSUs, etc under GST rule 48(4).
