There have been so many instances of large scale frauds in GST through fictitious billing, bogus registrations etc. e-Invoicing will play a major role in restricting these frauds to a great extent. e-invoicing has been initiated with effect from 1st October, 2020 (For Aggregate turnover exceeding 500 crores). Later on it was made compulsory for turnover exceeding 100 crores w.e.f. 01st January 2021. And now w.e.f. 1st April,2021 it has been made mandatory for turnover exceeding 50 crores. So any entity whose Aggregate Turnover in any preceding financial year from 2017-18 onwards exceeds 50 crores would be required to adopt e-invoicing system. If turnover exceeds 50 crores in current year then E-Invoicing will be effective from immediate next financial year.
E-Invoicing is nothing but ‘Machine to Machine’ exchange of invoice data. One of the myths among traders is that e-invoice will replace manual/own system generated invoice, but it is not the case. Traders will have to prepare/generate invoice manually/ in own system and upload the same on designated portal Invoice Registration Portal (“IRP”), which inter-alia will generate Invoice Reference Number (“IRN”) and quick response code (“QR Code”). Businesses are required to generate an e-invoice for every sale transaction accounted/reported on their respective ERPs, thus creating an e-invoice is the prior responsibility of the taxpayer (dealer)
1. Aggregate Turnover: Includes Taxable Supplies, Exempt Supplies, Non–Taxable Supplies, Exports.
2. What is ‘e-invoicing’?
As per Rule 48(4) of CGST Rules, notified class of registered persons have to prepare invoice by uploading specified particulars of invoice (in FORM GST INV-01) on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN).
After following above ‘e-invoicing’ process, the invoice copy containing inter alia, the IRN (with QR Code) issued by the notified supplier to buyer is commonly referred to as ‘e-invoice’ in GST.
3. Advantages of e-invoice for businesses
e-invoice has many advantages for businesses such as Auto-reporting of invoices into GST return, auto-generation of e-waybill (where required).
e-invoicing will also facilitate standardisation and inter-operability leading to reduction of disputes among transacting parties, improve payment cycles, reduction of processing costs and there by greatly improving overall business efficiency.
4. 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.
5. E-invoicing will cover Invoices, GST Credit Notes, GST Debit Notes.
6. Supplies presently covered under e-invoice:
Supplies to registered persons (B2B), Supplies to SEZs (with/without payment), Exports (with/without payment), Deemed Exports, by notified class of taxpayers are currently covered under e-invoicing.
7. e-invoicing is not applicable for NIL-rated or wholly-exempt supplies, B2C billing.
8. If Government Department is not registered under GST, then e-invoicing not applicable.
And if its registered e-invoicing will be applicable.
9. Entities/sectors exempt from the e-invoicing mandate:
Special Economic Zone Units, Insurer or a Banking Company or a Financial Institution, including a Non-Banking Financial Company, Goods Transport Agency supplying services in relation to transportation of goods by road in a goods carriage, Suppliers of passenger transportations Service, Suppliers of services by way of admission to exhibition of cinematograph films in multiplex screens.
10. Invoice Registration Portal (IRP):
Invoice Registration Portal (IRP) is the website for uploading/reporting of invoices by the notified persons. The first Invoice Registration Portal (IRP) is active and can be accessed at: https://einvoice1.gst.gov.in/. Other portals will be made available in due course.
11. Utility needed to generate an e-invoice:
A system/ utility to report e-invoice details in JSON format to IRP and to receive signed e-invoice in JSON format from the Portal.
12. Whether any tool is provided to report invoices to IRP?
Yes. For entities not having their own ERP/Software solutions, they can use the free offline utility (‘bulk generation tool’) downloadable from the e-invoice portal. Through this, invoice data can be easily reported to IRP and obtain IRN/signed e-invoice.
13. Bulk uploading of invoices to IRP:
It is possible. The offline utility (‘bulk generation tool’) serves this purpose.
Further, the ERP or accounting systems used by large tax payers can be designed in such a way that they can report invoices in bulk to IRP.
However, reporting to IRP and generation of IRN will be one after another (which will not be visible for user). For the user, it will appear like bulk upload and bulk receipt.
14. logo on e-invoice?
After reporting invoice details to IRP and receipt of IRN, at the time of issuing invoice to receiver (e.g. generating as PDF and printing as paper copy or forwarding via e-mail etc.), any further customisation, i.e. insertion of company logo, additional text etc., can be made by respective ERP/billing/accounting software providers.
15. 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.
16. How a typical IRN looks like?
IRN is a unique 64-character hash,
17. How to print an e-invoice?
Once the IRP returns the signed JSON, your ERP/Accounting/Billing System converts it into PDF and can be printed, if required.
Businesses who don’t have their own ERP/Accounting Software, will be downloading and using the free offline utility (‘bulk generation tool’) to upload invoice data on e- invoice portal and obtain signed invoice (in JSON). In this scenario also, there is a facility on e-invoice portal to generate ‘human-readable’ PDF copy of invoice (for save/print/e – mail etc.).
18. Where e-invoicing is applicable, there is no need of issuing invoice copies in triplicate/duplicate.
19. On generation of IRN, will the IRP send or e-mail the e-invoice to the receiver?
No. IRP will not do this. Upon receiving signed JSON from the IRP, it is for the supplier to share the e-invoice (along with QR Code etc.) in agreed format to the receiver.
20. How will the supplier send the e-invoice to the receiver?
A suggested mechanism may be to exchange the PDF of the JSON received from IRP, (including QR code) as the best authenticated version of the e-invoice for business transactions.
However, a mechanism to enable system-to-system exchange of e-invoices through eco- system partners will be made available in due course.
21. Taxpayers (for whom e-invoicing is compulsory) will be making supplies to small businesses. How these small businesses will get the invoice from those big suppliers?
In the same way as it is being done now. For example, the large taxpayers can convert the signed e-invoice JSON into PDF and share the copy by e-mail or send printed copy by post, courier etc.
However, a mechanism to enable system-to-system exchange of e-invoices will be made available in due course.
22. 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.”
23. Amending details of a reported invoice for which IRN has already been generated:
Amendments are not possible on IRP. Any changes in the invoice details reported to IRP can be carried out on GST portal (while filingGSTR-1). In case GSTR-1 has already been filed, then using the mechanism of amendment as provided under GST.
However, these changes will be flagged to proper officer for information.
24. An IRN/invoice reported to IRP can be cancelled
25.With the introduction of e-invoicing, is e-way bill still compulsory?
Yes. While transporting goods, wherever the e-way bill is needed, the requirement continues to be mandatory.
26. Will the e-invoice details be pushed to GST System? Will they populate 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.
27. Whether the e-way bill get auto-generated?
In case both Part-A and Part-B of e-way bill are provided while reporting invoice details to IRP, they will be used to generate e-waybill.
In case Part-B details are not provided at the time of reporting invoice to IRP, the same will have to be provided by the user through ‘e-way bill’ tab in IRP log in or e-Way Bill Portal, so as to generate e-way bill.
28. For all further details and information on e-invoicing, please visit the URL: https://einvoice1.gst.gov.in
So all those who are in turnover bracket of 50crores to 100 crores will have to start e-invoicing w.e.f. 1st April, 2021. If they do not do so their Invoices will be nil and void and the buyer will not get any Input Tax Credit. This is another milestone on GST road map. Very soon the Aggregate turnover limit is going to be decreased further so that all the big entities are covered in the e-invoicing net.