Einvoice-The GST Council approved the standard of e-invoice in its 37th meeting held on 20th Sept 2019 and the same along with schema has been published on the GST portal. Also, there is a lot of myth or misconception about e-Invoice. E-invoicing in India will be a big move, due to the volume of business transactions undertaken every day. The present post is an attempt to explain the concept of e-invoice, how it operates, and the basics of e-invoice.
For generating an e-invoice, a registered taxpayer has to use the official website-einvoice1.gst.gov.in. You can use the official website by using the simple steps which are given below.
Contents of this post
What does e-invoice mean?
An e-invoice is an electronically issued invoice in a specified format containing inter alia, the IRN (with QR Code) issued by the notified supplier to the buyer. As per Rule 48(4) of CGST Rules, The registered persons have to prepare an invoice by uploading specified particulars of the invoice (in FORM GST INV-01) on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN). E-invoices facilitate the exchange of the invoice document (structured invoice data) between a supplier and a buyer in an integrated electronic format.
What is the official link for e-invoice generation?
The official link for generating einvoices online is einvoice1.gst.gov.in. You can search on google directly or you can get an official link through the GST Portal. It is also searched as an invoice registration portal.
What is the invoice registration portal?
The invoice registration portal is the e-invoicing official site that is einvoice1.gst.gov.in. Here the notified GST taxpayers can generate an e-invoice for their generated tax invoice.
Who is eligible for E-invoice?
For every Registered person whose aggregate turnover (based on PAN) in any preceding financial year from 2017-18 onwards, is more than the prescribed limit (as per relevant notification), e-invoicing is mandatory.
These are the supplies are covered for e-invoicing through any registered person-
- 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-invoice.
What is the turnover limit for e-invoices?
From April 1, 2021, Registered taxpayers with a turnover of over Rs 50 crore were generating B2B e-invoices. The threshold was brought down to Rs 20 crore beginning April 1, 2022. The CBIC now plans to further lower the threshold for e-invoice generation to Rs 5 crore.
Who is exempt from e-invoice?
e-invoice is exempt in case of
- Special Economic Zone Units
- Insurers
- Banking companies or financial institutions, including a non-banking financial company (NBFC)
- Goods Transport Agency (GTA) supplying services in relation to transportation of goods by road in a goods carriage
- Suppliers of passenger transportation service
- Suppliers of services by way of admission to the exhibition of cinematograph films on multiplex screens
- Persons registered in terms of Rule 14 of CGST Rules (OIDAR)
Is einvoice mandatory for B2B?
Yes, In the case of B2B supplies, It is mandatory to generate an e-invoice.
Why einvoice is required?
The major benefits of the e-invoice system are as follows:
1. Standardization: One-time reporting on B2B, SEZ, and export invoice data in the form it is generated to reduce reporting in multiple formats.
2. Seamless Reconciliation: Reconciliation and data verification between suppliers and recipients will be seamless and thus provide better control over input tax credit computation and claim.
3. Lesser Compliance: Reduction in overall compliance burden. Substantial reduction in input credit verification issues as same data will get reported to tax department as well to buyer in his inward supply (purchase) register.
4. Automation: Auto-generation of Sales and Purchase Registers (ANX-1 and ANX-2).To generate Sales and purchase register (ANX-1 and ANX-2) from this data to keep the Return (RET-1 etc.) ready for filing under New Return.
5. Elimination of fake invoices: Reduction of tax evasion, System level matching of input credit and output tax.
6. Information Availability: Near real-time availability of information to all the relevant participants in the supply chain.
7. On receipt of info through GST System as a buyer can do reconciliation with his Purchase Order and accept/reject in time under New Return
8. Environment friendly: The need for the paper form of multiple copies of the waybill is eliminated. Hence, tons of paper are saved per day.
9. Officials saved monotonous work collecting and matching the manual work with the returns of the taxpayers.
When I am liable to make einvoice?
If your turnover exceeds the prescribed limit in the current financial year, then starting e-invoicing would be required from the beginning of the next financial year.
In the example given, as you had crossed the threshold during 2022-23, e-invoicing will be applicable w.e.f. 1st April 2023.
Is einvoice mandatory for B2C?
No. Reporting B2C invoices by notified persons is not applicable/allowed currently.
What is the process of e-invoicing?
These are the simple steps to creating an e-invoice-
1. Invoice Creation –Invoice is created using an accounting or billing software as per the prescribed format for E-invoicing. Clearing the fog about a major misconception surrounding E-invoice generation, it is not mandatory for a taxpayer to generate E-invoice through the government’s tax portal. In fact, the taxpayer can continue using any accounting software of his preference, with the only necessity being, the software’s ability to generate the invoice in the given e-invoicing format.
2. Invoice Registration Number (IRN) Generation-Supplier can generate a unique Invoice Reference Number (IRN) using a standard hash-generation algorithm. Generation of IRN by the supplier is optional. In absence of IRN, the IRP system of government will generate the same.
3. Upload on Invoice Registration Portal (IRP)– JSON file for each B2B invoice (generated through the accounting software or any third party tool), along with the IRN, if generated is uploaded on the Invoice Registration Portal (IRP)
4. IRP Validation of Invoice Information-The IRP will validate the generated hash/IRN attached with JSON (if uploaded by the supplier)or generate an IRN and authenticate the file against the central registry of GST for any duplication. The IRN will be the unique identity of the E-invoice for the entire financial year.
5. Digital Signature and QR Code Generation-Upon successful verification, the invoice will be updated with IRP’s digital signature on the invoice date and a QR code will be added to the JSON file.
6. E-Invoice data transmission to E-Way Bill Portal and GST System-The uploaded data will be shared with the E-way bill and GST system, which will be used for auto-population of GST Annexures and
7. E-Invoice Receipt back to Supplier’s ERP-The portal will send the digitally signed JSON along with IRN and QR code back to the seller. The invoice will also be sent to the buyer on their registered email id.
Further Faqs on einvoice
What documents are covered under e-invoicing?
Presently, These documents are covered under e-invoicing1. Invoices2. Credit Notes3. Debit Notes
What is IRN full form?
The Invoice Reference Number (IRN) is a unique number (also known as a hash) generated by the e-invoice system using a hash generation algorithm. For every document such as an invoice or debit or credit note to be submitted on the e-invoice system, a unique 64-character invoice reference number shall be generated.
Is e-invoicing applicable for NIL-rated or wholly-exempt supplies?
No. In those cases, a bill of supply is issued and not a tax invoice.
Whether e-invoicing is applicable for invoices between two different GSTINs under the same PAN?
Yes. e-invoicing by notified persons is mandated for the supply of goods or services or both to a registered person.As per Section 25(4) of CGST/SGST Act, “A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.”
Can we make an e-invoice after the invoice date?
Yes, an IRN can be generated a few days after the date of the invoice, but it is not recommended because you will be violating the Time of Supply rules by doing so. Besides, without an IRN, the invoice on hand will not be valid. Hence, it is recommended to generate IRNs as and when invoices are raised.
An Accountant, GSTP, GST blogger, Website Creator, SEO Builder & Co-founder of the website https://gstportalindia.in for the help of GST Taxpayers of India. Having a perfect accounting experience of more than 10 years in a Private Ltd Company.