Effective from today, businesses with a turnover of over Rs. 100 crore are required by the Goods and Service Tax (GST) network to upload invoices into the Invoice Registration Portal (IRP) within seven days of receipt. Failure to comply with this new regulation will result in the inability of recipients to claim input tax credit under the goods and services tax regime for invoices older than seven days.

Ms. Shilpa Dhobale, Head, Product & Strategy IRISGST, at IRIS Business Services, a stock exchange listed regtech company which recently launched one of the private GST e-IRP out of total four private e-IRPs, emphasizes the significance of this regulation by stating that, "With the new 7-day time limit for generation of e-invoices, we are moving towards near real time recording of economic activities in the country. Industries where batch processing for e-invoices is followed should definitely evaluate the impact of the permissible time gap between invoice issuance and its IRN."

Dhobale also highlights the importance of businesses being mindful of the seven-day window for e-invoicing during book closures at month end or year-end. She suggests implementing additional checks and balances to ensure IRNs are generated within the time frame, and integrated solutions that provide visibility from IRN generation to its population in GST returns shall prove useful in the upcoming days.

This policy is applicable only to invoices and not to reporting credit or debit notes. A validation system has been established, which will reject invoices uploaded after the seven-day deadline. Mr. Vivek Jalan, Partner, Tax Connect Advisory, a multi-disciplinary tax consultancy firm, explains that, "The advisories seek to impose a time limit of seven days on reporting old invoices, credit notes and debit notes on the e-invoice IRP portals for taxpayers with AATO greater than or equal to Rs. 100 crores."

Jalan provides an example to illustrate the implications of non-compliance with this regulation. He says that if an invoice has a date of May 31, 2023, it cannot be reported after June 7, 2023. If e-invoice is not made due to tech glitches on May 31 and the taxpayer comes to know this only on June 11, 2023, while filing GSTR-1, then a credit note (with IRN) also has to be generated on June 11, 2023, to reverse this transaction. A new e-invoice needs to be generated for a transaction that took place on May 31, 2023. This new post-dated e-invoice shall be liable to interest for 11 days, and a general penalty of Rs. 20,000 may be applicable. The recipient of the e-invoice can take ITC only in the next month of generation of e-invoice