Article Explains about E-Invoice Under GST, Misconception About E-Invoice Under GST, E-Invoice Scheme, Benefits From E-Invoice under GST, E-Invoice Portal [Invoice Registration Portal – (IRP)], Steps of Generation of E-Invoice under GST, QR Code, Modes of Generation of E-Invoice under GST and Other Important points of E-Invoices under GST. Detailed Note is as follows:-
1. Introduction To E-Invoice Under GST
The GST Council approved the standard of e-invoice in its 37th meeting held on 20th Sept 2019 and accordingly, on 13th Dec 2019, Government has issued Notification No 68/2019 CT to 72/2019 CT, laying down legal roadmap for E-Invoicing. E-Invoicing will be applicable on voluntary basis from January 2020 and mandatory from April 2020 to some class of person.
2. Misconception About E-Invoice Under GST
Biggest misconception about E-invoice, in the minds of GST Registered person / Professionals/ Consultant is that, E-Invoice means, preparing Tax invoice on GST Portal. Many people think that e-invoice will be generated from governments tax portal. However, this is incorrect. Invoices will continue to be generated using an Accounting or billing software. Under E-Invoice, Invoice is prepared on ERP software and then JSON file from software will be created and that is required to be uploaded on portal.
Another misconception about E-invoice is that, it is applicable to all GST Registered person. However as per Notification No 70/2019 CT dated 13th Dec 2019, it will be applicable
» To Registered person whose aggregate turnover in a financial year exceeds Rs 100 Crore and
» In respect of supply of Goods/Services to Registered Person (B2B)
3. E-Invoice Scheme
As per GSTIN, all accounting and billing software companies are being separately asked to adopt the e-invoice standard so that their users can generate the JSON from the software and upload the same on the IRP. All these software would adopt the new e-Invoice standard wherein they would re-align their data access and retrieval in the standard format.
Government envisaged below benefits from E-Invoice
- Elimination of fake invoices
- Substantial reduction in input credit verification issues
- One time reporting on B2B invoice data, to reduce reporting in multiple formats (one for GSTR 1 or ANX 1 and the other for e-way bill)
- E-Way bill can also be generated using e-Invoice data
5. E-Invoice Portal [Invoice Registration Portal – (IRP)]
E-Invoice Portal [Invoice Registration Portal – (IRP)] is going to perform the following-
- Generate a unique Invoice Reference Number (IRN)
- Digitally sign the e-invoice
- Generate a QR code
- Send the signed e-invoice to the recipient of the document on the email provided in the e-invoice
6. Steps of Generation of E-Invoice under GST
STEP 1 – Generation of Invoice and JSON
- Generation of the invoice by the seller in his own accounting or billing system (it can be any software utility/ERP that generates invoice)
- The invoice must conform to the e-invoice (standards). Seller should have a feature in its ERP that will output invoice data in JSON format.
- Those who do not use any accounting software or IT tool to generate the invoice, will be provided an offline tool to key-in data of invoice and then submit the same
- The suppliers (seller”s) software should be capable to generate a JSON of the final invoice that is ready to be uploaded to the IRP. The IRP will only take JSON.
STEP 2 – Uploading of JSON
- Seller to upload the JSON of the e-invoice into the IRP.
- The JSON may be uploaded directly on the IRP or through GSPs or through third party provided Apps)
STEP 3 – Validation of data by IRP
- If IRN is not generated , then IRP will generate IRN, based on JSON uploaded.
- If IRN is generated, then IRP will validate the IRN, (Based on JSON uploaded) from Central Registry of GST System to ensure that the same invoice from the same supplier pertaining to same Financial Year is not being uploaded again.
- On receipt of confirmation from Central Registry, IRP will add its signature on the Invoice Data as well as a QR code to the JSON.
STEP 4 – Sharing of E-invoice
- Sharing the signed E-invoice data along with IRN to seller
- Sharing the signed E-invoice data along with IRN to the GST System as well as to E-Way Bill System, will also update the ANX-1 of the seller and ANX-2 of the buyer.
- The IRP will sign the e-invoice and the e-invoice signed by the IRP will be a valid e-invoice and used by GST/E-Way bill system.
- Returning the digitally signed JSON with IRN back to the seller along with a QR
- The registered invoice will also be sent to the seller and buyer on their mail ids as provided in the invoice.
7. QR Code
The QR code will enable quick view, validation and access of the invoices from the GST system . It will be generated by IRP after uploading JSON of invoices. The QR code will consist of the following e-invoice parameters:
1. GSTIN of supplier
2. GSTIN of Recipient
3. Invoice number as given by Supplier
4. Date of generation of invoice
5. Invoice value (taxable value and gross tax)
6. Number of line items.
7. HSN Code of main item (the line item having highest taxable value)
8. Unique Invoice Reference Number.
8. Modes of Generation of E-Invoice under GST
Multiple modes will be made available so that taxpayer can use the best mode based on his/her need. The modes given below are envisaged at this stage under the proposed system for e-invoice, through the IRP (Invoice Registration Portal):
1. Web based
2. API based
3. SMS based
4. mobile app based
5. offline tool based and
6. GSP based.
9. Other Important points of E-Invoices under GST
- Signature on E-invoice – E – invoice generated is not required to be signed again by the The e-invoice will be digitally signed by the IRP after it has been validated. Once it is registered on IRP/GST System, it will not be required to be signed by anyone else.
- E-invoice Currency — Default currency of E-Invoice will be INR. Seller can display the currency in E-invoice.
- Line item of E-Invoices – The maximum number of line items per e-invoice is 100.
- Printing — E-invoice can be printed. It is valid only if it has IRN.
- Cancellation of E-Invoice – The e-invoice mechanism enables invoices to be cancelled. This will have to be reported within 24 hours. Any cancellation after 24hrs could not be possible, however one can manually cancel the same on GST portal before filing the returns.
- E Way Bill — E-Invoice will not replace E-way bill. For transportation of goods, the e-way bill will continue to be mandatory