e-invoicing under GST- Brief Overview

INTRODUCTION

E Invoicing is one of the biggest and positive update taken place under GST law like E Way Bill system in 2020. The invoicing practices are adopted by business houses are different from one another and government wants unified and equal approach in invoicing.

The biggest and foremost important reason behind introduction of E invoicing is to curb fake invoicing. Tax leakage and fraud by means of fake invoices is being already a concern of government before introduction of GST law.

Looking into the evasion on account of fake invoicing the government is of the action to authorise every invoice and that can be done only by generating invoices with GST portal and that is called as E invoicing.

Government has not introduce E Invoicing in one shot the step by step and phased manner approach has been adopted by government in making E Invoicing mandatory.

• In first phase E invoicing is applicable for Taxpayers with aggregate turnover more than 500 CR on 1st October 2020.
• In Second phase E invoicing is applicable for Taxpayers with aggregate turnover more than 100 CR on 1st January 2021.
• Soon in Phase Three government will launch and cover remaining tax payers.

♦ Legal Support Behind E Invoicing System.

1) Definition Of E Invoicing

Section 2(6) of the CGST Act: “(6) “aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all Indiabasis but excludes central tax, State tax, Union territory tax, integrated tax and cess; “

2) As per the  No. 13/2020 amended vide Not. No. 70/2020 and Not. No. 88/2020, Aggregate Turnover in any preceding Financial Year from 2017-18 onwards needs to be considered to ascertain the applicability of E-Invoicing. The Aggregate Turnover is as per GST Returns.

Illustration On Applicability of E invoicing

1. For Annual Aggregate Turnover More Than 100 Crore.

Particulars	Illustration 1	Illustration 2
Taxable Turnover	50 Crore	50 Crore
Exempted Turnover	15 Crore	20 Crore
Nil Rated Supply	10 Crore	11 Crore
Export Turnover	20 Crore	20 Crore
Sub Total A :-	95 Crore	101 Crore
CGST, SGST, IGST, CESS	6 Crore	10 Crore
Grand Total :-	101 Crore	111 Crore
Applicability Of E Invoicing	NOT APPLICABLE*	APPLICABLE**

Illustration 1 :- Aggregate Turnover is less than 100 crore as GST Levy not considered under the definition of aggregate turnover.

Note :- Turnover under any financial year from 2017-18 is considered for calculating limits to mandate applicability of E Invoicing.

3) Infrastructure For E Invoicing by Government.

With Notification CGST Notification 69/2019 notifies an e-invoicing portals that will give an IT Platform to tax payers to generate E Invoice and  accept e-Invoices, verify the invoice and generate a unique Invoice Reference Number.

The list of websites of this e invoice portal are as follows:

• www.einvoice1.gst.gov.in
• www.einvoice2.gst.gov.in
• www.einvoice3.gst.gov.in
• www.einvoice4.gst.gov.in
• www.einvoice5.gst.gov.in
• www.einvoice6.gst.gov.in
• www.einvoice7.gst.gov.in
• www.einvoice8.gst.gov.in
• www.einvoice9.gst.gov.in
• www.einvoice10.gst.gov.in

This portal is also called Invoice Registration Portal (IRP).

It was in the mind of a taxpayers that E invoicing will bring more trouble in changing their existing system and shifting to E invoicing but E-invoicing has a great start in India.

“According to the National Informatics Center (NIC), more than 495 lakh e-invoices were generated by 27,400 taxpayers during October 2020 on the e-invoicing portal. The taxpayers generated 8.4 lakh e-invoices on 1st October 2020, and the usage has gradually picked up to 35 lakh e-invoice in a single day by 31st October 2020.”

4) Process of E invoice Generation

Following is the step by step process to issue E invoice.

Step 1) Creation of Invoice with the help of existing infrastructure but one thing should kept in mind that the invoice should contain every mandatory fields which is required by E invoice schema.

If all the mandatory fields are not synchronised is existing infrastructure then tax payer is advice to go for IT enable infrastructure.

Step 2) Invoice Authorisation and generation of Unique IRN (Invoice Registration Number). The invoice which has been prepared has to be uploaded to E invoicing portal for generation of IRN. For this taxpayer can use abovementioned websites notified by the government.

Step 3) Generation Of QR Code.

5) Mandatory Points Required To Mentioned For E Invoicing.

On the basis my analysis of E invoicing template total number of fields in e-invoice schema is around 140, of which approximately 50 are mandatory or mandatory subject to certain conditions for the normal general small taxpayer. The mandatory data includes details like buyer and supplier details, invoice value, tax rate, description and HSN of goods or service, taxable value and tax amounts. Optional data fields are payment related such as bank account no, mode of payment, pre-tax values, reference document number etc.

In case no value to be given in mandatory field taxpayer can us “nil” value for successful generation of IRN.

Tax payer has to report following documents under E Invoicing system.

1) Invoice By Supplier of Goods or Services

2) Credit Note and Debit Note

Bill of Supply And Delivery challan and Transfer documents need not be uploaded to E invoicing Portal.

6) Non Applicability of E Invoicing.

The following Taxable persons are excluded from issuing e-invoice vide GST notification No. 13/2020-Central Tax dated 21st Mar’ 2020:

• Insurance company
• Banking company
• Financial Institution
• NBFCs
• GTA
• Supplier of passenger transportation services
• Supplier of services by way of admission to the exhibition of cinematograph films in multiplex screens
• Special Economic Zones (SEZs) Units (Notified vide Notification No. 13/2020 and 61/2020- Central Tax)
• As per the notifications, exclusion is for SEZ Unit and not for SEZ Developers.

7) Synchronisation Of GSTR 1, GSTR 3B And E Way Bill with E Invoicing.

With an Introduction of E invoicing government has planning to achieve an seamless flow of Input Tax Credit. With E invoicing real-time posting of ITC in receivers GSTR 2A and posting of forward invoice in GSTR 1 of supplier will be automated. And it is another positive move towards generation of automated GST returns.