The Proposed E-invoicing System has been approved by 37th GST Council meeting held on 20-09-2019. The E Invoicing system will be operationalized in a phase manner from 01st January 2020.
Entities to whom it will applicable:
| Sl no | Turnover | Optional from | Mandatory From |
| 1 | More Than Rs 500.00 Crores | 01st January 2020 | 01st April 2020 |
| 2 | More than Rs 100.00 Crores | 01st February 2020 | 01st April 2020 |
| 3 | Less than Rs 100.00 Crores | 01st April 2020 | Not yet Declared |
In this respect, the GSTN Portal has already published the E-Invoice System concept note, Standard, Schema and Template
E-invoicing concept is the concept of reporting of every invoices to the Invoice Registration Portal (IRP) which will be managed by the GST Network (GSTN) , the system will assign a unique number / QR Code to each invoices reported under E-invoicing mechanism in order to serve various purposes of GST Act/ Rule.
The e-invoicing system is only a Reporting mechanism under GST, there is no system for generation of invoice through the portal.
Let’s have a brief analysis on the e invoice system.
IMPORTANT ASPECT OF E-INVOICE :
1. Type of Transaction to be reported : The E-invoicing system is applicable only for B2B Transaction i.e. transaction with two registered business entities. Therefore B2C (Business to Customer) transaction is out of scope of e-invoice.
2. Generation of Invoice: There is no scope for generation of invoices from GST Portal as per E- invoicing mechanism. The E-invoicing system is a reporting mechanism of invoices to GST Portal through Invoice Registration portal(IRP) of GST Network One can Print the E-invoice what is uploaded in the system.
Therefore, for day-to-day transaction the entity has to follow their traditional mechanism for generation of invoices. Moreover, the GSTN has already published the schema and template for uploading of invoice details for validation on E-invoice portal by the Invoice Registration portal(IRP). In the format prescribed by the GSTN , there are Certain Mandatory Field and Certain Optional Fields.
Therefore, the Manual Invoice as generated by the System should have the minimum required data as envisaged in the template for easy uploading of data. Mandatory Field is provided in Annexure
In this Respect one of the FAQ as published by the GSTN is as follows :
FAQ No :12: Would the Supplier be allowed to issue his own invoice and if yes, will the Invoice number and IRN be required to be mentioned?
a. Yes, the supplier will issue his own system’s invoice, in the standard e-invoice schema that has been published. Invoice number is a mandatory item under GST and hence for e-invoice.
b. IRN (Hash) can be provided after the e-invoice has been successfully reported to the IRP. E-Invoice will be valid only if it has IRN.
3. Users Benefited; Data reported by the Entity will serve the purpose like
i. TO SELLER : To view invoice wise liability vide ANX-1. also GSTR- 1 data can be filled up easily.
ii. TO BUYER : Buyer can view ITC Related to the Invoice vide ANX-2.
iii. E-WAY BILL PORTAL: E way bill can be generated easily even Part-A of E-way bill can be filled up easily.
iv. TAX OFFICER: The Tax officer can verify invoice details at any roadside through QR Code generated by this system.
4. Invoice No & Invoice Reference No( IRN) :
Invoice No is the Suppliers Own System Generated GST Invoice No as per prevailing practice and duly complied with Section 31 pf the GST Act.
Invoice Reference No ( IRN) :
a. The Unique Invoice Reference No (IRN) is the Number Generated / Validated by the Invoice Registration Portal (IRP) for each invoice reported under E-invoice mechanism.
b. The IRN Number is the unique number generated through hash generation algorithm. The Number is based on 3 parameters
1. Supplier GSTIN
2. Supplier Invoice No
3. Financial year
The Number (IRN) can either be generated by the Supplier using the above parameters ( String Maximum Length 50) for each invoice and it can be uploaded under E-invoice platform for getting it validated through Invoice Registration portal(IRP).
If supplier has no such mechanism to generate the unique IRN no , then while filling up the e-invoice data through IRP portal the data column need to be kept as blank. In this case the IRN will be automatically generated by IRP and it will communicate to Seller.
Therefore, the Invoice No is the Supplier created number whereas the Invoice Reference No (IRN) is the Number either Validated (if supplier created using the hash algorithm and get it validated through IRP) or Generated (Number Generated by the IRP when supplier not generated the IRN ) by the Invoice Registration portal(IRP).
5. Upgradation in System is required:
a. Supplier is need to upgrade its own system of accounting like Tally, SAP etc in order to cope with the system to generate the JSON File.
b. The small and medium size taxpayers (having annual turnover below Rs 1.5 Crores) can avail accounting and billing system being offered by GSTN free of cost.
c. GSTN will provide Offline Tool where data of an invoice, generated on paper can be entered which in turn will create JSON file for uploading on the IRP.
6. QR Code : The QR Code i.e. Quick Response Code will be generated by the IRP for each Invoices . It contain the IRN along with few other details of Invoices as mentioned below . The QR Code will be very help full to verify the details of invoices at tax officer checking points. The QR Code details are :
i. GSTIN of supplier
ii. GSTIN of Recipient
iii. Invoice number as given by Supplier
iv. Date of generation of invoice
v. Invoice value (taxable value and gross tax)
vi. Number of line items.
vii. HSN Code of main item (the line item having highest taxable value)
viii. Unique Invoice Reference Number (hash)
d. HOW THE SYSTEM WILL FLOW
STEP-1 : INVOICE CREATION:
Taxpayers have to upload the invoice details in their own accounting software (Tally, ERP, SAP etc.) and generate the JSON file. For this necessary upgradation is required in the system.
The Scheme and the Mandatory /Optional Field template has been published by the GSTN .
STEP:-2 : Invoice Uploading: The JSON file have to upload onto the Invoice Registration Portal (IRP) to be managed by the GST Network.
STEP : 3 : IRN Generation : IRP will validate the key details of the B2B invoice checks for any duplications thereafter its
i. Generates an Invoice Reference Number (IRN) / Validate the IRN if provided by the supplier,
ii. Digitally signs the invoice and.
iii. Creates a QR code in Output JSON for the supplier.
STEP : 4 : Authentication and Signing
IRP sends the e-invoice data with digital signature and QR code to the
i. Seller and Buyer on the mail Ids provided in the invoice.
ii. GSTN Portal
- In ANX-1 (for outward supplies) for the seller, and
- In ANX-2 (for inward supplies) for the buyer.
iii. E-way bill system: For creating Part-A of e-way bill and only vehicle number have to be added in Part-B of the e-way bill.
Important Points:
1. E-Invoice mechanism have an option to cancel the invoice within 24 hours of registration of IRP. Any cancellation after 24 hours could not be possible through IRN, taxpayer have to manually cancel the same on GST Portal before filing the return.
2. E-Invoice cannot be partially cancelled; it has to be fully cancelled.
3. Each E-Invoice will be uploaded for registration on IRP within time line (will be notified by the Government)
4. Maximum number of line item per invoice is 100
5. Invoice without IRN is Invalid ( Necessary Amendment need to be made in GST Act & Rule)
Source:
Link Source : https://www.gstn.org/e-invoice/
The FAQ, E-Invoice Scheme Template can be obtained from the above link of GST Network.
ANNEXURE: E-INVOICE STANDARDS – MANDATORY FIELDS OF E-INVOICE
| Sr. No. | Category | Small Description of the field | Sample Value of the field | Description |
| 1 | General | Version number | 1 | It is the version of schema . It will be used to keep track of version of Invoice specification. |
| 2 | Invoice Reference Number | 649b01ft | It will be generated by IRP / Validated by IRP if provided by Seller as per Hash algorithm . Maximum Letter 50 | |
| 3 | Code for Invoice type | Reg / SEZP / SEZWP / EXP / EXPWP / DEXP | This will be the code to identify type of invoice. | |
| 4 | Invoice number | Sa/1/2019 | It will be as per invoice number rule mentionted in CGST/SGST rule Maximum limit 16 Letter | |
| 5 | Invoice Date | 21/07/19 | The date when the Invoice was issued. Format “YYYY-MM-DD” | |
| 6 | Supplier Information | Supplier_Legal_Name | The Institute of Chartered Accountants of India | Name as appearing in PAN of the Supplier |
| 7 | Gstin of the Supplier | 29AADFV7589C1ZO | GSTIN of the supplier | |
| 8 | Supplier address1 | Vasanth Nagar | Address of the Supplier | |
| 9 | Place | Karnataka | State of the Supplier | |
| 10 | Pincode | 560087 | Pincode of the Supplier | |
| 11 | Buyer Details | Buyer Legal name | Adarsha | Trade name of buyer |
| 12 | GSTIN | 29AACCR7832C1ZD | GSTIN of the Buyer | |
| 13 | State code | 29 | Place of supply code of Supply | |
| 14 | Address1 | Address | Address of the Buyer | |
| 15 | Place | Bangalore | State of the Buyer | |
| 16 | pincode | 560002 | Pincode of the Buyer | |
| 17 | Payee name | Name of the person to whom payment is to be made | ||
| 18 | Account Number | Account number of Payee | ||
| 19 | Payment mode | Cash/Credit/Direct Transfer | Cash/Credit/Direct Transfer | |
| 20 | Financial Institution Branch (IFSC Code) | A group of business terms to specify Branch of Payee | ||
| 21 | Delivery Information | Company Name | ICAI | Detail of person and address wherefrom goods are dispatched. |
| 22 | Address1 | Vasanth Nagar | ||
| 23 | State | Karnataka | ||
| 24 | Pincode | 560087 | ||
| 25 | Invoice Item Details | Serial Number | 1,2,3 | |
| 26 | Quantity | 10 | The quantity of items (goods or services) that is charged in the Invoice line. | |
| 27 | Item Rate per quantity | 500.5 | The number of item units to which the price applies. | |
| 28 | net amount | 5000 | The unit price, exclusive of GST, before subtracting Item price discount, can not be negative | |
| 29 | GST Rate of item | 5 | The GST rate, represented as percentage that applies to the invoiced item. | |
| 30 | IGST Amount as per item | A group of business terms providing information about GST breakdown by different categories, rates and exemption reasons | ||
| 31 | CGST Amount as per item | 650 | ||
| 32 | SGST Amount as per item | 650 | ||
| 33 | Batch number/name | Batch number details are important to be mentioned for certain set of manufacturers | ||
| 34 | Document Total Details | Total invoice value | ||
| 35 | Total Tax Amount | When tax currency code is provided, two instances of the tax total must be present, but only one with tax subtotal. | ||
| 36 | Paid amount in advance | The sum of amounts which have been paid in advance. Must be rounded to maximum 2 decimals. | ||
| 37 | Amount due | The outstanding amount that is requested to be paid. Must be rounded to maximum 2 decimals. | ||
| 38 | Extra Information | Tax scheme | GST, Excise, Custom, VAT eyc. | Mandatory element. Use “GST” |
| 39 | Ship To information | Shipping To_Name | Adarsha | A group of business terms providing information about the address to which goods and services invoiced were or are delivered. |
| 40 | Shipping To_GSTIN | 36AABCT2223L1ZF | ||
| 41 | Shipping To_Address1 | Address | ||
| 42 | Shipping To_Pincode | 560001 | ||
| 43 | Shippint To_State | Karnataka | ||
| 44 | Supply Type | Supply/export/ Jobwork | ||
| 45 | Transacion Mode | Regula/BilTo/ ShipTo |
Brief About Author
Author: CA DEBASIS SAHOO
Author is working in CPSE. The contact email id is cadebasissahoo@gmail.com
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