A business might make errors or implement incorrect financial details. In such circumstances, businesses can cancel the e-invoice by undertaking the requisite actions. Amendment or cancellation of an e-invoice lets businesses reissue accurate invoices by rectifying the mistakes. It helps maintain compliance with tax and financial accuracy while refraining from payment delays and disputes.
E-invoicing was introduced in GST in order to simplify communication between companies and businesses. It is a straightforward process that allows taxpayers to upload invoice details on IRP or Invoice Registration Portal and get IRN or Invoice Reference Number from there. If you are here to learn how to cancel an invoice, welcome to this post. Let’s delve into the points to further understand the cancellation process.
A Brief on e-Invoice Amendment
The time limit for e-invoice modification/amendment/cancellation time must be reported to the Invoice Registration Portal within 24 hours. After 24 hours, the Invoice Registration Portal cannot cancel the invoice or amend it. But for someone who wishes to cancel the digital invoice after 24 hours, they can do it manually on the GST portal before filing returns.
So, let’s assess the reasons why an e-invoice needs to be cancelled.
Why Would You Ever Want to Cancel The e-Invoice?
Truth be told, the e-invoicing process involves businesses uploading and getting invoices authenticated with the QR as well as IRN code from the IRP. After the authentication, the supplier needs to print that QR code with IRN or Invoice Reference Number on invoices before issuing it to purchasers. But there comes a time when you need to cancel the invoice because of a few reasons. As a supplier, you can cancel it because of any of these reasons:
- You receive notifications for order cancellation from the purchaser
- There’s been a duplicate entry
- Mistakes with the spellings or other things in the e-invoice
- Wrong or incorrect entries in your e-invoice
In the above cases, if you don’t cancel the invoice, it may contribute to hassles. To overcome such a circumstance, the taxpayer gets a provision to cancel the invoice.
Key Aspects and Rules Related to the Cancellation Process: What Should You Learn?
Here’s presenting the rules and important points related to the e-invoice cancellation procedure:
- You can cancel the e-invoice on the IRP, but the e-invoice cancellation time limit is 24 hours of IRN generation
- Just in case the e-invoice gets cancelled, that invoice number won’t be available to use again
- If the bill is generated for IRN, cancellation is not available
- If the IRN gets cancelled, the GSTR-1 will be updated with its cancelled status automatically
- After 24 hours, you would need to issue a credit note or debit note to nullify that invoice (alternatively, you can also edit GSTR-1 and modify invoice details accordingly, but it’s not valid for all cases)
- You cannot opt for partial cancellation of your e-invoice (you must choose the whole invoice to be cancelled)
Process of Cancelling the e-Invoice: Steps to Follow
Whether it’s due to incorrect or duplicate entry or cancellation made by the buyer, cancelling or amending the e-invoice is done by following the given steps:
Step 1: First and foremost, you need to visit the e-invoice dashboard on the e-Invoice portal
Step 2: Find the “Cancel” option, which is present under ‘E-Invoice’. You need to click on “Cancel.”
Step 3: Now, you need to enter either the IRN or the acknowledgement number in the field. After this, tap on the ‘Go’ option.
Step 4: Soon after you tap on this button, your screen will pop up a notification mentioning that your e-invoice will be cancelled.
There, you need to choose one of the reasons why you are cancelling the invoice. Type your remarks and press on the button mentioning “Submit.”
Now, you will see the system displaying a confirmation message with your e-invoice having a watermark of being “cancelled.”
Note that no changes are there in the possibility of cancellation or amendment of your invoice with the introduction of e-invoicing. The only thing is that you need to cancel e-invoices within 24 hours on the Invoice Registration Portal.
E-Invoice Cancellation in Bulk: Things to Note
If you want to cancel e-invoices in bulk, you must follow these steps:
Step 1: Visit the section that mentions ‘Help’ on the portal.
Step 2: Here, you need to tap on the ‘Bulk Generation Tools’ option.
Step 3: Download ‘e-Invoice Cancel by IRN – JSON Preparation’ from there.
Step 4: After this, you need to enter the details like IRN, cancellation reasons, and cancel remarks. Soon after filling these boxes, you need to press the ‘Validate’ option to check whether any errors are present. You can rectify this accordingly.
Step 4: In the fourth step, you need to tap on Prepare JSON as soon as the file gets validated.
Step 5: This is the last and final step, where you need to log in again to the portal and visit the e-Invoice section. Tap on the ‘Bulk IRN Cancel’ button and upload your JSON file.
In short, there’s around a 24-hour window for amending or cancelling the e-invoice. So, you have seen that the digital invoice process for cancellation is straightforward and seamless. You can conveniently undertake these steps if you want to cancel due to double entry or incorrect information.
FAQs on E-invoice cancellation
What to do if 24 hours have passed and the e-invoice has not yet been cancelled?
If you need to cancel the e-invoice after the 24-hour time limit, you can visit the GST portal before you file the GSTR-1 and proceed manually.
Is it possible to generate an e-invoice with the same IRN?
No, if you have cancelled the IRN, you cannot use the same invoice number to generate the next IRN. The invoice will automatically get rejected by IRP when you use it more than once.
Can you revise the e-invoice?
In case of incorrect entries or errors, revising is not an option. You need to cancel the whole invoice and upload the new one by generating a completely new IRN.