Goods & Services Tax-GST E-Invoicing

Overview

Electronic invoicing under GST, known as e-Invoicing, is a way businesses can create invoices electronically. It is similar to how GST-registered businesses use electronic waybills when moving goods. Some specific GST-registered businesses are required to generate e-invoices for their transactions with other businesses (B2B).

What is GST E-invoicing?

e-Invoice, also known as Electronic Invoicing, is a system where all B2B invoices are electronically uploaded and verified on a specific portal. After successful verification, a unique Invoice Reference Number (IRN) is generated for each invoice by the IRP(Invoice Registration Portal). Additionally, each invoice is digitally signed and equipped with a QR code. This entire procedure is referred to as e-invoicing under GST.

Benefit

• The main goal of using e-invoices is to make tax reporting easier and prevent errors. This is done through a system that shares invoice data with the GST and e-way bill systems. By continuously uploading invoices, most of the needed information for tax returns and e-way bills is automatically filled in.
• No need to report the same invoice details multiple times in different forms. Just upload it once, and everything you need is filled in automatically.
• Part A of the e-way bill is automatically captured, and only transporter details need to be updated.
• B2B details are automatically included in the GSTR-1 return when you upload invoices.
• Fewer challenges in verifying input tax credits, as the same data is reported to the tax department and the buyer's purchase register (GSTR-2A).
• Buyers can easily reconcile their purchase register with the information from the GST System.
• A complete record of B2B invoices and automated matching of input credits and taxes reduce tax evasion.
• Fake invoices are eliminated, making tax administration more efficient.

Who needs to generate e-invoices and when does it apply?

Based on Turnover:

• Phase I: For taxpayers with an aggregate turnover of over Rs 500 crore, it applied from October 1, 2020.
• Phase II: For those with a turnover exceeding Rs 100 crore, it started on January 1, 2021.
• Phase III: Applied to businesses with a turnover of over Rs 50 crore from April 1, 2021.
• Phase IV: For those with a turnover surpassing Rs 20 crore, it became mandatory from April 1, 2022.
• Phase V: Applied to taxpayers with a turnover exceeding Rs 10 crore from October 1, 2022.
• Phase VI: For businesses with a turnover of more than Rs 5 crore, it's compulsory from August 1, 2023.

Other Criteria:

• Taxpayers must follow e-invoicing in FY 2022-23 onwards if their turnover exceeds the specified limit in any financial year from 2017-18 to 2021-22.
• Aggregate turnover includes the turnover of all GSTINs under a single PAN across India.
• If turnover was below the threshold limit in the last financial year but exceeds it in the current year, e-invoicing starts from the next financial year (e.g., FY 2023-24).

Transactions and Documents Covered:

• Tax invoices, credit notes, and debit notes under Section 34 of the CGST Act.
• Apply to taxable Business-to-Business sales of goods or services, Business-to-government sales, exports, deemed exports, supplies to SEZ, stock transfers, supply of services to distinct persons, SEZ developers, and supplies under reverse charge.
• Remember, e-invoicing applies based on both turnover and the nature of transactions and documents involved.

Due Date To Generate E-Invoice:

Until April 30, 2023: There was no specific time limit for generating e-invoices.

From May 1, 2023, onwards:

• Taxpayers with an Annual Aggregate Turnover (AATO) of INR 100 crore or more must generate e-invoices for tax invoices and credit-debit notes within 7 days of the invoice date.
• Failing to do so will result in these invoices and CDNs being considered non-compliant.

For other applicable taxpayers:

There is no defined time limit or period for generating e-invoices.

However, it is advisable to create e-invoices around a week before filing GSTR-1 returns, as it takes T+3 days for e-invoice details to auto-populate into GSTR-1.

Note: On May 6, 2023, the department deferred the 7-day reporting time limit for old e-invoices on the IRP portals by three months. The new implementation date is yet to be announced.

Procedure:

Prepare Your Software: Make sure your ERP system follows the required standards and incorporates e-invoicing standards and mandatory parameters set by CBIC (Central Board of Indirect Taxes and Customs).

Choose How to Generate IRN: You have two options:

• Get your computer's IP address whitelisted on the e-invoice portal for direct API integration or via a GST Suvidha Provider (GSP).
• Use a bulk generation tool to create a JSON file with invoice details. Upload this file to the e-invoice portal for bulk IRN generation.

Create Your Invoice: Generate a regular invoice on your ERP or billing software. Include all necessary details such as billing name and address, supplier's GSTN, transaction value, item rate, GST rate, tax amount, etc.

Upload Invoice Details: Using the chosen method (JSON file, app, GSP, or direct API), upload the invoice details, especially mandatory fields, to the Invoice Registration Portal (IRP). The IRP acts as the central registrar for e-invoicing and authenticates your invoice. There are various ways to interact with IRP, including SMS-based and mobile app-based methods.

Validation and IRN Generation: The IRP validates the key details of your B2B invoice, checks for duplicates, and generates an Invoice Reference Number (IRN) based on four parameters: Seller GSTIN, invoice number, financial year (in YYYY-YY format), and document type (INV/DN/CN).

Digital Signing and QR Code: The IRP digitally signs the invoice and creates a QR code in the output JSON for the supplier. You will receive an email notification about the e-invoice generation (if you provided your email in the invoice).

GST Portal and E-Way Bill: The authenticated invoice data is sent to the GST portal for GST returns. If applicable, details are also forwarded to the e-way bill portal. Your GSTR-1 for the relevant tax period is auto-filled, helping determine your tax liability.

Printing Your Invoice: You can continue to print your invoice with your company logo as usual. The e-invoicing system only requires you to report your invoices to the IRP in electronic format.

Tax & Process

Documents Required

Procedure

FAQ's