Managing Modifications and Voiding of E-Invoices under GST

The electronic invoicing system enhances automation and simplifies the tax return filing process, while also strengthening measures against tax evasion. This article will examine the procedures for amending and canceling e-invoices.

Recent Updates

The Central Board of Indirect Taxes and Customs (CBIC) announced the sixth phase of e-invoicing on May 10, 2023. Businesses with an annual turnover exceeding ₹5 crore in any financial year since 2017-18 must now issue e-invoices starting August 1, 2023.

On May 6, 2023, the GST department extended the 7-day deadline for reporting older e-invoices on the Invoice Registration Portal (IRP) by three months, with a new implementation date still pending.

Previously, on April 12 and 13, 2023, the GSTN advised that taxpayers with an annual turnover of ₹100 crore or more were required to report tax invoices, credit, and debit notes to the IRP within seven days of issuance, effective May 1, 2023.

Key Functions of the IRP

Before exploring modifications and voiding of e-invoices, it is essential to understand that each e-invoice is generated according to a specified schema and assigned a unique Invoice Reference Number (IRN) through a hash algorithm. Taxpayers can either generate the IRN themselves or upload the invoice to the Invoice Registration Portal (IRP) for IRN generation. If the taxpayer generates the IRN, the IRP must validate it.

An advisory from GSTN on April 13, 2023, stipulated that businesses with an annual turnover of ₹100 crore or more must report tax invoices, credit, and debit notes to the IRP within seven days of their issuance, effective May 1, 2023. However, on May 6, 2023, the department temporarily postponed this 7-day reporting deadline for older e-invoices by three months, with a new date to be announced.

The IRP's role is to authenticate e-invoices by verifying their adherence to the schema, mandatory parameters, and IRN uniqueness. The IRP operates independently of the GST portal. After validating an e-invoice, the IRP transmits the details to the GST portal.

Amending and Cancelling E-Invoices via IRP

Invoice Registration Portals (IRPs) process individual invoices sequentially. To prevent server overload and maintain efficiency, IRPs are designed with a streamlined system that does not require them to retain e-invoices for more than 24 hours. Consequently, an e-invoice can only be cancelled via the IRP within 24 hours of its generation.

It is important to note that only a full cancellation is permitted, as partial cancellation of an e-invoice is not supported on the IRP. Furthermore, e-invoices cannot be amended through the IRP.

Amending and Cancelling E-Invoices via GST Portal

While IRPs allow e-invoice cancellation only within 24 hours, the GST portal permits both amendment and cancellation of e-invoices in accordance with GST regulations. This means that any necessary amendments or cancellations to e-invoices will continue to be processed when filing Form GSTR-1.

Procedure for Cancelling an E-Invoice

E-invoices can be cancelled under three specific circumstances: in cases of incorrect data entry, duplicate entries, or when a buyer decides to cancel an order. When initiating a cancellation, ensure you have the e-invoice readily available.

Here are the steps:

1. Access the e-invoice dashboard on the e-Invoice portal and select 'Cancel' from the 'E-Invoice' menu.
2. Input either the acknowledgement number or the IRN into the designated field, then click 'Go'. The system will then display the e-invoice slated for cancellation.
3. Choose the appropriate reason for cancellation, provide any relevant remarks, and click 'Submit'.

After successful cancellation, the system will show a confirmation message, and the e-invoice will be marked with a 'cancelled' watermark.

The general provisions for amending and cancelling invoices remain consistent with the introduction of e-invoicing, with the notable distinction that e-invoices can be cancelled directly on the IRP within a 24-hour window.

Procedure for Bulk E-Invoice Cancellation

To cancel multiple e-invoices simultaneously, follow these steps:

1. Navigate to the 'Help' section on the e-Invoice portal and select 'Bulk Generation Tools'.
2. Download the offline utility titled 'e-Invoice Cancel by IRN – JSON Preparation'.
3. Populate the required fields, such as IRN, 'Reason for Cancellation', and 'Cancel Remarks', then click 'Validate' to identify and correct any errors.
4. Once the file is validated, click 'Prepare JSON'.
5. Log back into the e-Invoice portal, proceed to the e-Invoice section, click 'Bulk IRN Cancel', and upload the prepared JSON file.