On September 14, 2023, the National Informatics Centre, operating under the Ministry of Electronics and Information Technology (MeiTY), issued a clarification concerning Goods and Services Tax (GST) e-invoicing for Government Supplies.
The GST Policy Wing has issued this clarification in reference to the implementation of e-invoicing for transactions involving Government departments or agencies, as detailed in Circular No. 198/10/2023-GST dated July 17, 2023.
Government departments, institutions, government agencies, local authorities, and public sector undertakings (PSUs) that are mandated to deduct tax at source under Section 51 of the Central GST/State GST Act are required to undergo mandatory registration under Section 24(vi) of the CGST Act, 2017.
Therefore, entities falling into the aforementioned categories, which register exclusively for the purpose of tax deduction at source in accordance with section 51 of the CGST Act, should be recognized as registered entities under the GST law, as stipulated by clause (94) of section 2 of the CGST Act.
Consequently, if a registered individual surpasses the specified turnover threshold necessitating e-invoice generation, they are obligated to issue e-invoices for their supplies to Government departments, establishments, government agencies, local authorities, PSUs, and similar entities, as per rule 48(4) of the CGST Rules.
It is strongly recommended that taxpayers, who have been notified to generate e-invoices and provide goods or services to government departments or agencies, must generate B2B GST e-invoices containing the GSTIN of the respective Government department or agency.
Furthermore, on August 18, 2023, the Goods and Services Tax Network (GSTN) issued an advisory containing an E-Invoice and step-by-step instructions for e-invoicing, which can serve as a valuable reference for taxpayers.
For all taxpayers with an Annual Aggregate Turnover (AATO) above Rs. 20 crores, the GST e-invoice system has updated that the two-factor authentication is mandatory until November 1st, 2023.
The taxpayers with an Aggregate Annual Turnover (AATO) of up to 2 crore are exempted from filing the Annual Turnover (GSTR-9) for the Financial Year 2022-23, stated by the Central Board of Indirect Taxes and Customs (CBIC) vide notification No. 32/2023 – Central Tax issued on 31st July 2023.
