E-Invoicing Applicable OR Not ?, Goods and Services Tax - GST

[RCPLLOGISTICS PVTLTD]

We provide the following services as mentioned below...

# Transportation by Road ( GTA with 12% FCM)

# Transportation by Train

# Transportation By Air

And our turnover is exceeding 50 Crores in exiting financial year.

So, Please guide to us whether e-invoicing will be applicable.?

Posts / Replies

[ABHISHEK TRIPATHI]

Dear Sir,

NN 13/2020 dated 21.03.2020 has exempted the registered person referred in Rule 54(3) [i.e.,GTA] - So GTA is exempted from e-invoicing.

You have mentioned other services also. That means you are just not providing GTA services. In such a situation I highly doubt that you are exempted under the aforesaid notification. Hence, need to issue e-invoice.

 

[Rajagopalan Ranganathan]

Sir,

Notification No. 13/2020-C.T. dated 21.03.2020 exempts the following registered persons from issuing e-invoices. They are-

1. a Special Economic Zone unit and not SEZ Developer;

2. supplier of taxable service is an insurer or a banking company or a financial institution, including a non-banking financial company; (rule 54 (2))

3. supplier of taxable service is a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage; (rule 54 (3) of CGST Rules, 2017 (herein after called 'the rules')

4.supplier of taxable service is supplying passenger transportation service (rule 54 (4)) of the rules); Passenger transportation service include transportation of passengers by road, rail by air etc.

5.A registered person supplying services by way of admission to exhibition of cinematograph films in multiplex screens (rule 54 (4A) of the rules).

In view of the above, you are exempted from e-invoice procedue.

[KASTURI SETHI]

Dear Sir, I think 2nd query is about transportation of goods by train (may be goods train or passenger train) and 3rd query is about transportation of goods by air. It is my wild guess. The querist is requested to confirm whether my guess is right or wrong.

[KASTURI SETHI]

Dear Querist,

If we peruse Notification No. 70/2019-C.T., dated 13-12-2019 Notification No. 13/2020-C.T., dated 21-3-202 (Basic notifications regarding E-invoicing), both talk of " not exceeding aggregate turnover'(now 50 crores) for the purpose of availing exemption from e-invoice. Emphasis is on the word 'aggregate'.

What I want to say exemption from e-invoicing is nature-of-supply wise and NOT entity-wise. For example ; in the scenario given by the querist, GTA service is exempted from maintenance of e-invoicing but transportation by train and by air are not exempted (supposing because full facts are not known at present) from e-invoicing, e-invoicing will be applicable to the querist on the basis of aggregate turnover exceeding 50 crores. This very aggregate turnover consists of all three supplies of service. (GTA -exempted but other two are not exempted from e-invoicing.). Turnover of all the three supplies are to be clubbed and the supplier is not exempted from e-invoicing in this scenario.

[GB Rao]

Dear sir,

By plain reading of the query, it appears that querist is not exempted from e-invoice as he is doing 2 more services in addition to GTA by Road and further he is crossing ₹ 50 crore turnover .

[Alkesh Jani]

Dear Experts,

Please help me find "Special Economic Zone Unit" in the Notification mentioned in the reply.

Thanks in advance.

[KASTURI SETHI]

Sh.Alkesh Jani Ji,

Pl. see Notification No.61/20-CT dated 30.7.2020 which amends Notification No.13/20-CT dated 21.3.20.

 

[Alkesh Jani]

Shri Kasturiji Sir,

Thanks a lot, Do this means 100%EOU, STP, ETP etc. and all registered person above prescribed turnover shall prepare E-Invoice for Export? What about DTA Sale?

Thanks,

With due regards

[KASTURI SETHI]

Sh.Alkesh Jani Ji,

NO exemption from E-invoicing to EOU. .It is at par with other domestic units An EOU cannot be called 100% EOU as partial sale is permitted in DTA. After implementation of GST w.e.f. 1.7.17, ALMOST all benefits are gone. Only the benefit of Basic Customs Duty exemption on imports is continued.

[KASTURI SETHI]

Benefit of exemption from IGST has also been permitted to EOU. Both benefits stand extended up to 31.3.2022. Just for knowledge sake. Not linked with exemption frpm E-invoicing.

[RCPLLOGISTICS PVTLTD]

As per our consultant

Notification no. 13/2020 - CT (attached) exempts a class of registered persons falling under Rule 54 (3) or (4) from the applicability of E-Invoicing Notification.

Rule 53 (3) & (4) is reproduced hereunder:

(3) Where the supplier of taxable service is a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage, the said supplier shall issue a tax invoice or any other document in lieu thereof, by whatever name called, containing the gross weight of the consignment, name of the consigner and the consignee, registration number of goods carriage in which the goods are transported, details of goods transported, details of place of origin and destination, Goods and Services Tax Identification Number of the person liable for paying tax whether as consigner, consignee or goods transport agency, and also containing other information as mentioned under rule 46.

(4) Where the supplier of taxable service is supplying passenger transportation service, a tax invoice shall include ticket in any form, by whatever name called, whether or not serially numbered, and whether or not containing the address of the recipient of service but containing other information as mentioned under rule 46.

Provided that the signature or digital signature of the supplier or his authorised representative shall not be required in the case of issuance of ticket in accordance with the provisions of the Information Technology Act, 2000 (21 of 2000).

Sub rule 3 deals with goods transportation agency and sub rule 4 deals with supplier of passenger transportation services. Now as per the language of the Notification no 13/2020-CT, e-invoicing provisions shall not be applicable on both these persons even though they are providing any other service also.

Further, FAQs (version 1.3 dated 11.11.2020) on e-invoice as available on NIC website (copy also enclosed herewith for reference please) - Question No 17 and 18 of the FAQs read as under:

"17.Which entities/sectors are exempt from the e-invoicing mandate?

a. Special Economic Zone Units

b. insurer or a banking company or a financial institution, including a non-banking financial company

c. goods transport agency supplying services in relation to transportation of goods by road in a goods carriage

d. Suppliers of passenger transportation service

e. Suppliers of services by way of admission to exhibition of cinematograph films in multiplex screens

18.The exemption from e-invoicing is w.r.t the nature of supply/transaction or w.r.t the entity?

It is for the entity."

Therefore, in view of above, Querist engaged in the business of transportation of goods by road in a goods carriage service falls under the exempted class of persons and therefore it is not required to issue e-invoice even in case of supply of other category of services.

[KASTURI SETHI]

Dear Querist, Are you not supplying other two services mentioned in the query ? If you supply services exempted from e-nvoicing and NOT exempted from e-invoicing both, both are to be clubbed.

[KASTURI SETHI]

Nature of service cannot be brushed aside.

[ABHISHEK TRIPATHI]

Dear Sir,

Exemption is on the registered person those referred in Rule 54(3). So, who will be the registered person under Rule 54(3)? Directly there is no such registered person mentioned under the aforesaid rule. All these rules talk about “supplier” who might be registered or not. So, we have to construe who might be the registered person for the purpose of the NN 13/2020-CT. According to rule 54(3), “the supplier of taxable service is a goods transport agency supplying services in relation to transportation of goods by road”. “GTA” and “in relation to transportation of goods” are the two conditions of the supplier as envisaged by the Rule. If someone has to construe registered person from such rule then the same has to have the same two conditions as stated before. Hence, registered person for the exemption under NN 13/2020-CT will be someone who is solely/exclusively registered as GTA supplying services in relation to transportation of goods by road. If you're not solely/exclusively providing the same and supplying other services then you will not fall under the registered person as envisaged under rule 54(3).

Indeed, it is with respect to the entity only, the entity is “goods transport agency supplying services in relation to transportation of goods by road”. If the rule says GTA entity its exclusively GTA entity and you just cannot presume other taxable services into this GTA entity. Are you exclusively providing GTA services to be called as GTA entity? I would answer in negation.

Imagine a situation in which you are providing “transport of goods by air” for an aggregate turnover of 48 Cr. and remaining 2 Cr. as a GTA supply. Then also in such a situation you will call yourself a GTA entity and claim the exemption of not issuing an e-invoice.

Strict interpretation of Rule 54(3) seems the exemption is exclusively for GTA supplying services in relation to transport of goods by road.

You better seek clarification from the government regarding the same. Because not issuing an e-invoice will consequence on you as well as the recipient.

[RCPLLOGISTICS PVTLTD]

Our Turnover as follows....

Transportation by Road 45 cr.

Transportation by Train 7 Cr.

Transportation by Air 5 Cr.

Please guide whether we need to be issuing e-invoice or not.

[KASTURI SETHI]

Dear Querist,

Reply of SH. ABHISHEK TRIPATHI, Sir at serial no.14 above is as clear as sunshine.

[ABHISHEK TRIPATHI]

Even if you see the exemption for obtaining registration by GTA i.e., NN 5/2017. It says that if your “total tax” is payable under RCM then only you're exempted from obtaining registration. If GTA is paying forward charge or the same supplier is supplying other services on which tax is not paid on RCM then the supplier has to be registered. It means the exemption is available only w.r.t. to an entity that is exclusively providing GTA services.

Maybe the government intends to extend the benefit to your case, however, on strict interpretation, it seems that the benefit of not issuing an e-invoice is for the registered person exclusively providing GTA services.

Otherwise, in case, a big corp. can add GTA as a service, and claim the same benefit of exemption.

For instance, 500 Cr. turnover of supply goods and 5 Cr. turnover of GTA services under single registration number – aggregate turnover being 505 Cr. This entity can also call itself a GTA entity?

As in your case, GTA is 45 Cr. And Other Services are 12 Cr., yes for 45 Cr. you are not required to raise an invoice, however, for remaining 12 Cr. you are not exempted, in such a situation your aggregate turnover (for 12 Cr that is not exempted) will be again 57 Cr, and liable to e-invoice.

[ABHISHEK TRIPATHI]

Consult other registered person, other GTA players. Because other GTA players will also be providing transport by air etc. etc.

You may seek advance ruling on the same. Caveat – Looking at the history of advance rulings, one may say that it is Bhagwan Bharose.

Representation to the government, maybe they issue FAQ/Clarification regarding the same.

I personally think that the benefit of NN 13/2020 should be extended to your case, however, intricate issues and doubts are involved.

If someone says, your case is exempted then please put all these doubts that I have raised. If they satisfy your doubt then it's exempted. Don’t simply accept the proposition that FAQ Point 18 says exemption is w.r.t to “entity” hence, your GTA entity thus exempted. As them to establish you as a GTA entity, in situation when you supply other service.

Don’t worry, other than penalty, everything will get covered because in case they don’t accept invoice and disallow ITC then also things will get covered by 16(4) [My strong view on ITC].

[RCPLLOGISTICS PVTLTD]

Please make reply at serial no 15.

[ABHISHEK TRIPATHI]

Dear Sir,

E-invoice - Yes.

You do not fall under the exemption as you provide other services under the same registration. Exemption is w.r.t. to registered person who exclusively provides GTA services.

To the extent of GTA services (INR45 Cr.), its debatable and I am more inclined towards not raising an e-invoice for the same. But the other services, I think, e-invoice is to be raised.

I would love to be proven wrong (by good rationale). Because logically you should exempt the registered person, as if it falls like in your case. However, the strict interpretation of the notification doesn't speaks the same.

If you take legal opinion or ask other GTA player, then kindly let us know what they say about the same.

[ABHISHEK TRIPATHI]

Dear Sir,

While seeking any legal opinion, just make sure you must have Q&A session after professionals provide you with the opinion. Also make sure, after your Q&A, there must be room for modification of the legal opinion w.r.t. to your additional question/clarification, if required.