| May-06-2022

E invoicing in case of conversion

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  • CA VenkataramaniDeepak Agarwal
    Participant

    Turnover limit for e invoicing is 20 Cr. One partnership firm converted into ltd company and getting new GST registration. The turnover of the partnership firm is 100 cr. my question is that whether e invoice is applicable for the newly registered ltd company as new gst registration has taken and not have history of previous year turnover.

    CA VenkataramaniCA Venkataramani
    Compliance Expert

    Comments: The e-invoice provisions are made applicable to the registered person in whose case the aggregate turnover exceeds Rs. 20 Crores with effect from 01.04.2022 vide Notification No. 01/2022 – CT dated 24.02.2022. The Principal Notification No. 13/2020 – CT dated 21.03.2020 specifies that the e-invoice provisions are applicable to the ‘registered person’. Therefore, in the instant case, it can be inferred that the converted entity viz., Private Limited is a person separate and distinct than the earlier partnership firm and accordingly, since the aggregate turnover after the conversion is less than Rs. 20 Crores in which case, e-invoicing provisions should not be applicable.
    However, it may be noted that the GST Law recognises the change in ownership or conversion of partnership firm into a Private Limited and as such, has specified the provisions relating to transfer of unutilised input tax credit. Reference is also drawn to Section 85 of the GST Laws which specifies the provisions relating to ‘liability in case of transfer of business’. This being the case, in my considered view, the turnover of earlier partnership firm should also be considered for the purpose of determining the applicability of e-invoices.

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