E – invoicing or electronic invoicing is a process of validating invoices electronically thru GST Network (GSTN) for further use on common GST portal. It does not mean generation of invoices from a central portal of tax department.

The GST council has notified that e invoice is mandatory for registered person whose aggregate turnover in a financial year exceeds Rs. 100 crore.

Read: CBIC notifies Class of registered person required to issue e-invoice under GST

There are lot of myth and misconception about e- invoice. The normal understanding of the taxpayer is that now business be required to generate e-invoices on the GST portal.

This is not correct. The tax payers would continue to use their accounting system / ERP or Excel based tools or any such tool for creating the electronic invoices. The e- invoicing mechanism only specifies the invoice standard( Schema).

Also Read: E Way Bill Generation – Complete Analysis

At present, there are hundreds of accounting software which generate invoices but they use their own formats to store information electronically and data on such invoices can’t be understood by the GST System,if reported in their respective formats. Fresh entry need to be done every time for reporting details to GST system as part of Return. E-Invoice Electronic Invoice online digital invoices calculator document computer flat shadow

Implementation of e- invoicing system under GST

The e-invoicing system being implemented consists of two parts :-

(a) Generation of invoice in standard format

(b) Reporting of e- invoice to a central system

a. Generation of invoice in standard format

Generation of e- invoice will be the responsibility of the tax payer in his own accounting / billing system. It can be any software utility that generates invoices ie SAP/ TALLY or Excel based utility. The most important point here is that the invoice must have mandatory parameters and must conform to the e-invoice standard( schema) published in GST common portal.(https://www.gstn.org/e-invoice/.) The optional parameters can be according to the business need of the supplier.

The supplier’s software should be capable to generate a JSON of the invoice that is ready to be uploaded to Invoice reference portal( IRP) of GST.

b. Reporting of e- invoice to a central system

Invoice Registration portal( IRP) of GST will check from Central Registry of GST system to ensure that same invoice from same supplier pertaining to same financial year is not being uploaded again.

On receipt of confirmation, it will generate a unique Invoice Reference Number( IRN) and digitally sign the invoice and also generate a QR Code. Portal will return the same to the taxpayer who generated the document. The IRP will also send the signed e invoice to the recipient of the document.

E invoice data would be used by GST system for generation of e way bill( Part 1) and updating ANX-1 of the seller and ANX-2 of the buyer.

The QR code will contain viral parameters of the invoice ie GSTN of seller, buyer invoice no., invoice date, number of line items, HSN of major commodities. Invoice Reference

Thresh hold requirement for e invoicing applicability

E-Invoice is mandatory for registered person, whose aggregate turnover in a financial year exceeds one hundred crore rupees(>100 crores) w.e.f 1st April, 2020

(Notification No. 70/2019–Central Tax dated 13th December, 2019)

QR Code on B2C Invoice is mandatory for registered person, whose aggregate turnover in a financial year exceeds five hundred crore rupees(>500 crores) w.e.f 1st April, 2020

Notification No. 72/2019 Central Tax dated 13 December, 2019

Other Salient features of e invoice under GST

Signature on e invoice The e-invoice will be digitally signed by the IRP after it has been validated. Once it is registered, it will not be required to be signed by anyone else.

Company LOGO on e invoice :- The Logo will not be sent to IRP. It will not be part of JSON file to be uploaded on the IRP. However, software company can provide LOGO in the billing/accounting software so that it can be printed on invoice using the printer.

Printing of QR Code on invoice :- The QR code will be provided to the seller once he uploads the invoice into the Invoice Registration system and the same is registered there..Seller can at his option may print the same on Invoice.

QR Code on B2C Invoice is mandatory for registered person, whose aggregate turnover in a financial year exceeds five hundred crore rupees(>500 crores) w.e.f 1st April, 2020.( Notification No. 72/2019 Central Tax dated 13 December, 2019)

Validity of invoice without Invoice Reference No.( IRN) ; Invoice will be valid only if it has IRN.

Printing of e -invoice It will be possible for both the seller as well as the buyer to print the invoice, using the QR code as well as signed e-invoice returned by the Invoice Registration Portal(IRP).

Cancellation of e invoices :- The e-invoice mechanism enables invoices to be cancelled. This will have to be reported to IRN within 24 hours. Any cancellation after 24hrs could not be possible on IRN, however one can manually cancel the same on GST portal before filing the returns. E-Invoice can’t be partially cancelled. It has to be fully cancelled

Amendments to the e-invoice Amendments are allowed on GST portal as per provisions of GST law. All amendments to the e-invoice will be done on GST portal only.

E invoices for Exports The e-invoice schema also caters to the export invoices as well. The e-invoice schema is based on most common standard, this will help buyer’s system to read the e-invoice.

E-invoice schema for reverse charge mechanism:- E-invoice system has a reverse charge mechanism reporting as well.

Benefits of implementation of e- invoicing system

  • One time reporting of B2B invoice data by the supplier. It will reduce reporting in multiple formats(GSTR-1/ E-way bill ).
  • E-invoicing can be further used for creating e-way bills by providing only vehicle details.
  • Substantial reduction in input credit verification issues as same data will get reported to tax department as well to buyer.
  • It will facilitate automatic preparation of GST Returns(ANX 1 and ANX 2
  • Complete trail of B2B invoices will be available
  • Invoices uploaded by suppliers for authentication will be automatically shared with buyers for reconciliation.
  • The system will auto-match input credit liability with output tax. E-invoice can be created for Debit/Credit Notes, Invoices and other eligible documents.
  • E-invoice can be created for Debit/Credit Notes, Invoices and other eligible documents.

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