Background
The transportation of goods from one place to another is facilitated by the filing of ‘E-Way Bills’ on the common GST portal. Similarly, the GST Council has decided to implement a system of e-invoicing which will be applicable to specified categories of persons (For large Taxpayers). e-invoicing is not the generation of invoice on GST portal. It is a myth. e-invoicing is the submission of an already generated standard invoice on a common portal. Thus it automates multi-purpose reporting with a one-time input of invoice details. We discuss the various aspects of the amendment in the below discussion.
Page Contents
1. Meaning of E-Invoicing under GST
‘E-invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal. Under the proposed electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP) to be managed by the GST Network (GSTN). All invoice information will be transferred from this portal to both the GST portal and e-way bill portal in real-time. Therefore, it will eliminate the need for manual data entry while filing ANX-1/GST returns as well as generation of part-A of the e-way bills, as the information is passed directly by the IRP to GST portal.
2. Need of E-Invoicing under GST
Currently, businesses generate invoices through various softwares, and the details of these invoices are manually uploaded in the GSTR-1 return. The invoice information is thereafter reflected in GSTR-2A for the recipients for viewing only. On the other hand, the consignor or transporters must generate e-way bill by again importing the invoices in excel or JSON manually. Whereas under the new return system, an annexure in form GST ANX-1 will mostly take the place of the GSTR-1 return. However, the process of generating and uploading invoice details will remain the same. It will be done by importing using the excel tool/JSON or by the online entry of data. A seamless flow of data is expected for e-way bill generation. e-invoicing will be the key tool to enable this.
3. Why E-Invoicing under GST is Beneficial to Taxpayer?
Taxpayers will have the following benefits by using e-invoice initiated by GSTN:
1. E-invoice resolves and plugs a major gap in data reconciliation under GST to reduce mismatch errors.
2. E-invoices created on one software can be read by another, allowing interoperability and help reduce data entry errors.
3. Real-time tracking of invoices prepared by the supplier is enabled by e-invoice.
4. Backward integration and automation of the tax return filing process – the relevant details of the invoices would be auto-populated in the various returns, especially for generating the part-A of e-way bills.
5. Faster availability of genuine input tax credit.
6. Lesser possibility of audits/surveys by the tax authorities since the information they require is available at a transaction level.
4. When, Who , How & Why we need to generate e-invoice?
CBIC on 13th December 2019 made some changes in the procedure of issuing invoices by some registered person. To make these changes CBIC issued five Central Tax notifications on 13.12.2019.
Gist of these notifications is as follows:
Provisions related to E-invoicing has been brought through
| CBIC notifies Class of registered person required to issue e-invoice under GST | Notification No. 70/2019–Central Tax [G.S.R. 926(E)] | 13/12/2019 |
| CBIC notifies common portal for e-invoice under GST | Notification No. 69/2019–Central Tax [G.S.R. 925(E)] | 13/12/2019 |
| CBIC amends Manner of Issuing Tax Invoice under GST | Notification No. 68/2019–Central Tax [G.S.R. 924(E)] | 13/12/2019 |
Provisions related to putting QR codes on Invoices has been brought through
| CBIC notifies class of registered person required to issue GST invoice having QR Code | Notification No. 72/2019–Central Tax [G.S.R. 928(E)] | 13/12/2019 |
| CBIC notifies rule 46 of CGST Rules, 2017 (Tax Invoice) wef 01.04.2020 | Notification No. 71/2019–Central Tax [G.S.R. 927(E)] | 13/12/2019 |
i) E-INVOICES IN B2B CASES
E-INVOICES IN B2B CASES – FACILITY with effect from 1st January 2020 – MANDATORY with effect from 1st April 2020
On 13th December 2019 a new sub-rule (4) of Rule 48 of CGST Rules 2017 is inserted vide notification no. 68/2019, whereby Govt. may notify such class of registered persons who are required to generate and issue E-invoice:
– by including such particulars contained in FORM GST INV-01; and
– after obtaining an Invoice Reference Number by uploading information contained therein on the Common Goods and Services Tax Electronic Portal; and
– in such manner; and
– subject to such conditions and restrictions;
as may be specified in the notification. At the same time to give effect to this new system of E-invoicing, CBIC issued another Notification no. 69/2019 on 13.12.2019, specifying that w.e.f. 1st January 2020 following Portal shall be used for the purpose of preparation of these e-invoices:
(i) einvoice1.gst.gov.in
(ii) einvoice2.gst.gov.in;
(iii) einvoice3.gst.gov.in;
(iv) einvoice4.gst.gov.in;
(v) einvoice5.gst.gov.in;
(vi) einvoice6.gst.gov.in;
(vii) einvoice7.gst.gov.in;
(viii) einvoice8.gst.gov.in;
(ix) einvoice9.gst.gov.in;
(x) einvoice10.gst.gov.in;
Though this system shall be made operational w.e.f. 01.01.2020 but, another Notification No. 70/2019 – Central Tax is issued on 13.12.2019, mentioning that in case of B2B supplies made by the registered person, whose aggregate turnover in a financial year exceeds one hundred crore rupees, this E-Invoices shall be mandatory with effect from 1st April 2020.
ii) QR-CODES ON B2C INVOICES
QR-CODES ON B2C INVOICES – MANDATORY with effect from 1st April 2020
On 28th June 2019, sixth proviso was inserted in Rule 46 of CGST Rules 2017 vide notification no. 31/2019, whereby it was provided that government may specify that the tax invoice shall have Quick Response (QR) code. However, as of now no such requirement was notified by the government.
So, now on 13th December 2019 CBIC issued Notification No. 72/2019 – Central Tax specifying that:
– W.e.f. 01.04.2020
– A registered person, whose aggregate turnover in a financial year exceeds five hundred crore rupees,
– Issuing invoice to an unregistered person (hereinafter referred to as B2C invoice),
shall issue an invoice having Quick Response (QR)code mentioned on the invoice.
However, where such registered person makes a Dynamic Quick Response (QR) code available to the recipient through a digital display, such B2C invoice issued by such registered person containing cross-reference of the payment using a Dynamic Quick Response (QR) code, shall be deemed to be having Quick Response (QR) code.
5. Will e-invoicing curb tax evasion
It will surely help in curbing tax evasion in the following ways:
- Tax authorities will have access to transactions as they take place in real-time since the e-invoice will have to be compulsorily generated through the GST portal.
- There will be less scope for the manipulation of invoices since the invoice gets generated prior to carrying out a transaction.
- It will reduce the chances of fake GST invoices and the only genuine input tax credit can be claimed as all invoices need to be generated through the GST portal. Since the input credit can be matched with output tax details, it becomes easier for GSTN to track fake tax credit claims.
Conclusion
To conclude it can be said that e-invoicing will surely help the taxpayers to reduce compliances related to uploading of invoices. In the author’s view, lets see how well the portal works and how well the integration be made of e-invoicing portal with GSTN & e-way bill portal. Therefore, clarity over the e-way bill generation should be the need of the hour and even if e-invoice is generated then it should be ruled out for the ease of business.
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Article by CA Rahul Gupta
B.Com(H), ACA
+91-9465045600
carahulguptaaca@gmail.com
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