E-Invoice under GST

What is meaning of E-Invoice under GST?

‘e-Invoice’ or ‘electronic invoicing’ means a system in which Business to Business (B2B) invoices are authenticated electronically by GSTN for further use on the common GST portal. Under the electronic  invoicing system, an unique identification number will be issued against every invoice by the Invoice Registration Portal (IRP) to be managed by the GST Network. The firstly IRP was Introduced by the National Informatics Centre(NIC) at einvoice1.gst.gov.in. All invoice information will be transferred from this portal to both the GST portal and e-way bill portal. Therefore, it will be reduce the time of manual data entry while filing GSTR-1 return and generation of part-A of the e-way bills, as the information is passed directly by the IRP to GST portal. So IRP helps to generate e-way bill and GSTR-1 data.

To whom is e-Invoicing mandatory applicable?

In First Stage

E-Invoice will be mandatory applicable from 1st October 2020 to all businesses whose aggregate turnover has exceeded Rs.500 crore for the businesses to generate the entire GST e-invoice including all the value of sales. The assessee whose turnover is more than Rs 500 crore in the previous fiscal year from 2017-18 to 2019-20. Notification No.61/2020 and Notification No.71/2020 – Central Tax prescribes the time period considered for determining eligibility under e-Invoicing. 

In Second Stage

Further, e-Invoicing has been mandatory applicable from 1st January 2021 to businesses whose aggregate turnover has exceeded Rs.100 crore limit in any of the preceding financial years from 2017-18 to 2019-20 as declared in Notification No.88/2020 – Central Tax.

The government try to include all businesses under the provision of e-Invoicing from 1st April 2021. The total turnover will include the turnover of all GSTINs in a single PAN base, across the India.

However, irrespective of the turnover, e-Invoicing shall not be applicable to the following categories of registered persons, as notified in CBIC Notification No.13/2020 – Central Tax:

• An SEZ unit
• A banking company  or an insurer or a financial institution (including an NBFC)
• A Goods Transport Agency (GTA)
• A registered person supplying passenger transportation services and supplying services by way of admission to cinema as Movie Tickets

Benefits to businesses of GST E-invoice :

Businesses will have the following benefits by using e-invoice system by GSTN: 

1. E-invoice will be solves the data gap in reconciliation to reduce mismatch errors.
2. E-invoices made on one software system will be ready for other, So its help reduce data entry errors.
3. Easily availability of input tax credit, improve in business efficiency.
4. Real-time tracking of invoices will be simplified GST Compliance.
5. Automation of the tax return filing process – the details of the invoices will be auto-populated in the GSTR 1 returns and for generating the part-A of e-way bills.
6. E-invoice system will be taken into consideration for the reduction in GST Tax evasion and fraud, it means now not possibility of creating fake GST invoice.

What is the process to Generating an e-invoice?

The following are the steps involved in generating an e-invoice. The process of generating the GST e-invoice will be the same as the e-way bill which is generated on the https://ewaybill.nic.in/ portal.

1.    The Registered person has to ensure to use the reconfigured ERP system as per PEPPOL standard. He could contact with the software service provider to start the standard set for e-Invoicing, i.e. e-invoice schema and must have the mandatory field notified by the CBIC.

Mandatory field are as under :

• Document Type Code – INV/DBN/CRN
• Supplier Legal Name, Supplier GSTIN, Supplier Address, Supplier Place, Supplier State Code, Supplier Pin code, Document Number, Document Date
• IRN- Invoice Reference Number
• Is Service – Y/N
• Supply Type Code - B2B/B2C/SEZWP/SEZWOP/EXPWP/EXPWOP/DEXP
• Item Description, HSN Code, Item Price
• Assessable Taxable Value, GST Rate
• IGST Value, CGST Value and SGST Value
• Total Invoice Value

2. Any Registered person has got primarily two options for IRN generation.

A. The IP address of the computer system can be whitelisted on the e-invoice portal for a direct API integration or integration via GST Suvidha Provider (GSP).

B. Download the Bulk generation tool to bulk upload the invoices. JSON  file will be generate from tool and it will be uploaded on the e-invoice portal to generate IRNs in bulk.

3. The Registered person must thereafter raise a normal invoice on that software. He must provide all the required details like, billing name and address, GSTN of the supplier, taxable value, GST rate applicable, tax amount, etc.

4. Once either of the above options is chosen, raise the invoice on the respective ERP softwares or billing softwares. Thereafter, upload the details of invoice especially mandatory fields onto the IRP using the JSON file or via application service provider (app or through GSP) or through direct API. The IRP will act as the central registrar for e-Invoicing and its authentication. 

5. IRP will Verify and validate the details of the B2B invoice, checks for any duplications and generates an invoice reference number(IRN) for reference. There are four field based on which IRN is generated: GSTIN of Seller, Invoice number, and FY in YYYY-YY and document type (INV/DN/CN).

6. IRP generates the invoice reference number (IRN), digitally signs the invoice and creates a QR code in Output JSON for the supplier. On the other hand, the seller of the supply will get informed of the e-invoice generation through email.

7. IRP will be send the authenticated payload to GST portal for GST returns. other, details will be forwarded to the e-way bill portal. The GSTR-1 of the seller gets auto-filled for that tax period. In turn, it determines the tax liability. A Registered  person can continue to print his invoice as being done presently with logo. e-Invoicing system only mandates all Registered person to report invoices on IRP in electronic format.

8. There is no need for the Registered Person to digitally sign the e-invoice which is to be uploaded on IRP. The e-invoice will automatically get signed after Validation.