e-Invoicing under GST w.e.f. 01-04-2022

What is e-Invoicing ?

e-invoice is a Tax Invoice which is normally issued by every registered tax payer but it contains some additional information in the form of QR Code. The tax invoice generated through accounting software i.e. Tally, Busy etc. are transmitted on the IRP i.e. on Invoice Registration Portal or say e-invoicing portal in json file. The government portal validates the information and return back the json file with digital signature after generating IRN (unique invoice reference number for each invoice) and adding a QR Code. The said json file is imported in the Accounting/ ERP system that enables invoice to be printed with QR Code.

‘e-invoice’ in ‘e-invoicing’ does not means generation of invoice by Government Portal. Government Portal just receive the JSON file of invoice generated by the supplier and it validates the data, generates IRN and add a QR Code and return back the signed JSON to the supplier.

Process of e-invoicing

Relevant Provisions/ References

• Section 31 of GST Act – provides for issue of invoice in prescribed format
• Rule 46 (r) – provides for mentioning of QR Code where invoice is issued u/r 48(4)
• Rule 48(4) – provides that such class of registered persons as may be notified shall issue e-invoice
• Rule 48(5) – provides that if e-invoice is not issued even if it is required to be issued, then the invoice so issued shall not be a valid invoice.
• FAQ’s
• E-Invoice Schema Not. No. 60/2020 dt 30.07.20 CT
• Notifications

Who is liable to issue e-Invoice

Every registered taxable person whose aggregate annual turnover exceeds Rs. 20 Cr in any of the financial year since 2017-18 is liable to issue e-invoice by way of uploading its tax invoice in json file on Invoice Registration Portal (IRP) in accordance with e-invoice schema in INV-01 and getting back digitally signed json from IRP with IRN and QR Code.

• Registered person whose aggregate annual turnover in any preceding financial year from 2017-18 onwards exceeds Rs. 20 Cr are liable for e-Invoicing.
• E-Invoicing applies to supply of goods or services or both.
• E-Invoicing applies to export (with or without payment) also. (Not. No. 70/2020 CT dt 30.09.20)
• Applies to B2b transactions only.
• Applies to supplies to SEZ Unit
• Applies to Deemed Export

Documents covered under e-Invoicing

• Tax Invoice
• Debit Note
• Credit Note

Exemption from e-Invoice

Entity Level Exemption –

• As per Notification No. 13/2020 CT dt 21.03.2020 registered persons covered by sub-rule (2), (3), (4) & (4A) of Rule 54 are exempt from issuing e-invoice, such as –
  • Insurance, Banking or Financial Institution including NBFC [Rule 54(2)]
  • Goods Transport Agency transporting goods by road [Rule 54(3)]
  • Supplier of passenger transportation service [Rule 54(3)]
  • Person supplying services by of admission to exhibition of cinematographic film in multiplex screen
  • SEZ Unit as per Notification No. 61/2020 CT dt 30/07/20 exempted.

Document Level Exemption-

• Bill of Supply
• Self Invoice in case of RCM u/s 9(4)
• Advance Payment
• Delivery Challan
• Financial Debit/ Credit Note

Transaction Level Exemption-

• B2c transactions
• Non-GST Supplies (alcoholic liquor, Petrol, Diesel etc)
• Bill of Entry in case of Import
• Nil rated or exempted supplies

Objective and advantage of e-invoicing

• e-Invoicing ensures real time reporting of invoices on the Government Portal and therefore it reduces the chances of manipulation to avoid the tax.
• Secondly it shall facilitate auto reporting of invoice details in GSTR-1 of supplier and GSTR-2A of recipient.
• Facilitate auto generation of e-way bills.
• Standardize the invoice format which shall reduce the disputes among the transacting parties.
• In this manner it will improve overall business efficiency.

Disadvantage of not issuing e-invoice when required

• Invoice issued in any manner other than in terms of rule 48(4) shall not be treated as valid invoice.
• Disentitle the recipient from claiming ITC.
• It may also attract penalty for not issuing valid tax invoice u/s 122.

Time limit for reporting of e-invoice on IRP

No there is no time window. It is a real time reporting.

Can e-invoice be cancelled

Yes, it can be cancelled within 24 hours of reporting to IRO through “Cancel API”. After cancellation the GSTR-1 will be updated. However if the connected e-way bill is active and verified by the authority during transit, then cancellation of e-invoice will not be permitted by the IRP.

Amendment in e-invoicing

IRP does not allow amendment in e-invoices. However amendment, if any, needed can be done as usual on the e-filing portal while filing GSTR-1. However such changes will be flagged to proper officer for information.

Will the e-invoice details be pushed to GST System? Will they populate in the return?

Yes. On successful reporting of invoice details to IRP, the invoice data (payload) including

IRN, will be saved in GST System. The GST system will auto-populate them into GSTR-1 of the supplier and GSTR-2A of respective receivers.

With source marked as ‘e-invoice’, IRN and IRN date will also be shown in GSTR-1 and GSTR-2A.

Where e-invoicing is applicable, is carrying e-invoice print during transportation of goods mandatory?

No. As per Rule 138A(2) of CGST Rules, where e-invoicing is applicable, “the Quick Reference (QR) code having an embedded Invoice Reference Number (IRN) in it, may be produced electronically, for verification by the proper officer, in lieu of the physical copy of such tax invoice.”

What data is embedded in QR Code?

The QR code will consist of the following key particulars of e-invoice:

a. GSTIN of Supplier

b. GSTIN of Recipient

c. Invoice number, as given by Supplier

d. Date of generation of invoice

e. Invoice value (taxable value and gross tax)

f. Number of line items

g. HSN Code of main item (line item having highest taxable value)

h. Unique IRN (Invoice Reference Number/hash)

i. IRN Generation Date

How will the QR Code be received?

The QR code is part of signed JSON, returned by the IRP. It is a string (not image), which the ERP/accounting/billing software shall read and convert into QR Code image for placing on the invoice copy, like this.

What is dynamic QR Code? Does it has any relevance for B2B e-invoicing?

• Dynamic QR code applies to entities with aggregate turnover > Rs. 500 crores.
• Applies to B2c invoices
• It facilitates digital payment.
• Dynamic QR Code enables the payer to make the payment through UPI in one go. It contains the bank details in an image format.
• Dynamic QR Code are generated by the taxable person himself with the help of QR Code generating machine whereas the IRN in case of e-invoice is generated by the IRP.
• It does not have any relevance with B2B transactions as those transactions are covered by e-invoice.

What businesses need to do, to be e-invoice ready?

Businesses will continue to issue invoices as they are doing now. Necessary changes on account of e-invoicing requirement (i.e. to enable reporting of invoices to IRP and obtain IRN), will be made by ERP/Accounting and Billing Software providers in their respective software. They need to get the updated version having this facility.

What is an Invoice Reporting Portal (IRP)

Invoice Registration Portal (IRP) is the website for uploading/reporting of invoices by the notified persons. Vide notification no. 69/2019-Central Tax dated 13.12.2019, ten portals were notified for the purpose of preparation of the invoice in terms of Rule 48(4).

Is e-invoicing voluntary?

No, it is not optional. Presently, only the notified class of persons will be allowed/enabled to report invoices to IRP.

Will it be possible for bulk uploading of invoices to IRP?

Yes. It is possible. The offline utility (‘bulk generation tool’) serves this purpose. Further, the ERP or accounting systems used by large taxpayers can be designed in such a way that they can report invoices in bulk to IRP.

Is Invoice number same as Invoice Reference Number (IRN)?

No. Invoice no. (e.g. ABC/1/2019-20) is assigned by supplier and is internal to business. Its format can differ from business to business and also governed by relevant GST rules. IRN, on other hand, is a unique reference number (hash) generated and returned by IRP, on successful registration of e-invoice.

How a typical IRN looks like?

IRN  is a unique 64-character hash, e.g. 35054cc24d97033afc24f49ec4444dbab81f542c555f9d30359dc75794e06bbe. It is not required to be printed on the invoice as it is already embedded in the QR Code printed on the Invoice.

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