GST E-invoice System issued Clarification on e-Invoicing for Government Supplies

The GST e-invoice System has issued a clarification on e-Invoicing for the Supplies made to Government Departments.

GST Policy Wing has issued the clarification on the applicability of the e-invoicing to the supplies made to the Government departments or agencies through a Circular issued in the month of July 2023.

Section 24(vi) of the CGST Act requires mandatory registration for government departments, establishments, government agencies, local governments, and PSUs that must withhold tax at source in accordance with the provisions of section 51 of the CGST/SGST Act.

Therefore, in accordance with the provisions of clause (94) of section 2 of the CGST Act, Government departments or establishments, Government agencies, local governments, and PSUs that have registered solely for the purpose of deducting tax at source are to be treated as registered persons under the GST law.

Accordingly, the registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing, is required to issue e-invoices for the supplies made to such Government departments or establishments/ government agencies/ local authorities / PSUs, etc. under rule 48(4) of CGST Rules.

The taxpayers who have been informed to generate electronic invoices and who provide goods or services to government departments or agencies are advised to do so using the department’s or agency’s GSTIN.