In the context of Indian law, invoices and payments are key components in business transactions, both for goods and services. Below is an overview of the legal aspects related to invoices and payments in India: Invoices Definition of an Invoice An invoice is a document issued by a seller to a buyer, detailing the goods or services provided, the agreed price, and the terms of payment. It serves as a formal request for payment. Types of Invoices Tax Invoice: Issued by a registered GST taxpayer when the goods or services are taxable under the Goods and Services Tax Act (GST). Commercial Invoice: Used in international trade to indicate the cost of goods shipped and other essential details for customs clearance. Proforma Invoice: A preliminary invoice provided before the actual sale, offering an estimated cost. Requirements of a Valid Invoice Under the GST Act, a valid tax invoice must contain: Seller's details (name, GSTIN, address). Buyer's details (name, GSTIN if applicable, address). Invoice number and date. Description of goods or services. Quantity and value of goods or services. Applicable GST rate and amount. Invoice for Payment Proof In case of disputes regarding non-payment, the invoice serves as evidence of the transaction. The invoice should clearly state the terms of payment, including the due date, mode of payment, and penalties for late payments. Electronic Invoices The GST framework mandates e-invoicing for businesses with a turnover exceeding a specified limit. E-invoicing systems allow businesses to upload invoices to a central portal for validation. Payments Methods of Payment Cheque: A common mode of payment, but it can lead to legal issues if dishonored. Bank Transfer: Includes NEFT, RTGS, and IMPS for electronic payment. Cash: Accepted for small amounts but discouraged for large transactions due to regulatory controls. Online Payments: Through payment gateways like UPI, debit/credit cards, and wallets. Late Payment and Penalties Under the Indian Contract Act, 1872, if payment is delayed beyond the agreed period, the seller can charge interest at a rate specified in the contract or as per Section 31 of the Sale of Goods Act, 1930. Late payments in business contracts can attract interest, compensation, and additional legal costs if not settled. Payment Terms Standard payment terms should include the agreed amount, due date, and method of payment. Common terms include Net 30, 15, or 60 days, or payments on delivery. Advance Payment: Businesses may ask for an upfront payment or deposit before delivery, especially in cases of large orders. Non-Payment Remedies Legal Action: If a buyer fails to pay, the seller may file a civil suit for recovery of the outstanding amount under the Civil Procedure Code. Cheque Bounce: If the payment is made through a cheque, and it bounces, the seller can initiate proceedings under Section 138 of the Negotiable Instruments Act. Debt Recovery Tribunal (DRT): For larger sums, banks or lenders may approach the Debt Recovery Tribunal under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI). GST on Payments Businesses need to comply with GST regulations on payment. GST liability arises when the payment is made, and businesses must report payments and file returns accordingly. For payments related to export of goods, there may be exemptions or zero-rated GST. Dispute Resolution Contracts should include a clause for dispute resolution, such as arbitration or mediation, in case of non-payment issues. Section 138 of the Negotiable Instruments Act (Cheque Bounce) In case of cheque dishonor due to insufficient funds or any other reason, the holder of the cheque can initiate legal proceedings under Section 138. The penalty includes imprisonment or fine, or both. Conclusion Properly issued invoices and timely payments are essential for smooth business operations. Both the buyer and seller should ensure that the terms of payment are clearly defined to avoid disputes. If payments are not made on time, businesses have multiple legal remedies, including charging interest, approaching courts, and initiating proceedings under the Negotiable Instruments Act.

E-Invoicing: Salient Features and Applicability Salient Features of E-Invoicing 1. Standard Format (Schema): E-invoices must follow a standardized format prescribed by the GST Council, ensuring uniformity and compatibility across systems. 2. IRN Generation: An Invoice Reference Number (IRN) is generated for every e-invoice after its registration on the Invoice Registration Portal (IRP). 3. QR Code: A QR code containing key invoice details is provided for easier verification and authentication by tax authorities. 4. Real-Time Reporting: E-invoices are reported in real-time to the GST system through the IRP, eliminating the need for subsequent manual data entry. 5. Integration with GST Returns: E-invoice data is auto-populated into GSTR-1, simplifying the process of filing GST returns. 6. Digital Signature: The IRP digitally signs the e-invoice to ensure authenticity and integrity. 7. Applicability Across Business Types: E-invoicing is applicable to various types of invoices like B2B, B2G (Business-to-Government), Export, and Credit/Debit Notes. 8. Amendment and Cancellation: E-invoices can only be canceled entirely on the IRP; partial amendments or modifications are not allowed. For corrections, a new e-invoice must be issued. 9. Access and Verification: Registered parties and tax authorities can access e-invoices using the IRN or QR code for verification. 10. ERP Integration: Businesses can integrate their ERP systems with the e-invoicing system for seamless compliance. --- Applicability of E-Invoicing 1. Turnover Threshold: Initially introduced for businesses with an aggregate turnover exceeding ₹500 crores (from October 1, 2020). Gradually extended to businesses with turnover thresholds of: ₹100 crores (from January 1, 2021), ₹50 crores (from April 1, 2021), ₹20 crores (from April 1, 2022), ₹10 crores (from October 1, 2022). As of August 1, 2023, e-invoicing became mandatory for businesses with an annual aggregate turnover exceeding ₹5 crores in any financial year since 2017-18. 2. Types of Transactions Covered: B2B Supplies: All transactions involving registered persons. Exports: Supplies to foreign buyers. Deemed Exports: Supplies treated as exports under GST. Credit/Debit Notes: Related to B2B invoices. 3. Exempted Entities: SEZ Units. Insurers, banking companies, or financial institutions. Goods Transport Agencies (GTAs) for specified services. NBFCs. Government departments and local authorities. 4. Non-Applicability for B2C Transactions: E-invoicing is not applicable for B2C transactions (Business-to-Consumer) as of now.