E-invoice portal– The GST Council has approved the introduction of ‘E-invoicing’ or ‘electronic invoicing’ in a phased manner for reporting of business to business (B2B) invoices to GST System, starting from 1st January 2020 on a voluntary basis.
Contents of this post
An e-invoice is an invoice generated by any software on the computer or Point of Sales (PoS) machine.
E-invoice does not mean the generation of invoices from a central portal of the tax department, as any such centralization will bring unnecessary restrictions on the way trade is conducted. In fact, taxpayers have different requirements and expectations, which can’t be met from one software generating e-invoices from a portal for the whole country. Invoice generated by each software may look more or less the same, however, they can’t be understood by another computer system even though business users understand them fully. For example, an Invoice generated by the SAP system cannot be read by a machine that is using the ‘Tally’ system.
The e-invoice system being implemented by tax departments across the globe consists of two important parts namely,
The basic aim behind the adoption of the e-invoice system by tax departments is the ability to pre-populate the return and to reduce the reconciliation problems. A huge increase in technology sophistication, increased penetration of the Internet along with the availability of computer systems at a reasonable cost has made this journey possible and hence more than 60 countries are in the process of adopting the e-invoice.
GST Council has given the responsibility to design the standard of e-invoice and update the same from time to time to GSTN which is the custodian of Returns and invoices contained in the same. Adoption of e-invoice by GST System is not only part of Tax reform but also a Business reform as it makes the e-invoices completely inter-operable eliminating transcription and other errors.
E-invoicing system in GST will provide better taxpayer services, reduction in tax evasion and more such as-
Generation of e-invoice will be the responsibility of the taxpayer who will be required to report the same to Invoice Registration Portal (IRP) of GST, which in turn will generate a unique Invoice Reference Number (IRN) and digitally sign the e-invoice and also generate a QR code. The QR Code will contain vital parameters of the e-invoice and return the same to the taxpayer who generated the document in the first place. The IRP will also send the signed e-invoice to the recipient of the document on the email provided in the e-invoice.
The flow of the e-invoice generation, registration, and receipt of confirmation can be logically divided into two major parts.
1. The first part is the interaction between the business (supplier in case of invoice) and the Invoice Registration Portal (IRP).
2. The second part is the interaction between the IRP and the GST/E-Way Bill Systems and the Buyer.
There are multiple ways/modes will be made available so that the taxpayer can use the best mode based on his/her needs. The modes given below are envisaged at this stage under the proposed system for e-invoice, through the IRP (Invoice Registration Portal):
No, Businesses will continue to generate e-invoices on their internal systems – whether ERP or their accounting/billing systems or any other application.
The e-invoicing mechanism only specifies the invoice schema and standard so as to be inter-operable amongst all accounting/billing software and all businesses.
No, the Same e-invoice schema will be used by all kinds of businesses. The schema has mandatory and non-mandatory fields. The mandatory field has to be filled by all taxpayers. The non-mandatory field is for the business to choose. It covers all most all business needs and specific sectors of business may choose to use those non-mandatory fields which are needed by them or their eco-system.
The invoice schema has to be maintained and invoices generated using this schema by the taxpayer himself. The GST portal or Invoice Registration Portal (IRP) will NOT provide the facility to generate invoices. IRP is only to report the invoice data.
The ERP or accounting billing software or any other software tool to generate the e-invoice of the seller shall only generate invoices.
It is again clarified that the e-invoice will not be generated at the GST portal.
It will be generated only at the seller’s system – whether ERP or the accounting/billing system/other software tools of the seller.
It will be uploaded into the GST ANX-1 only once it has been validated and registered by the invoice registration system. After it has been validated and is available in the ANX-1, it will be visible to the counterparty in his ANX 2.
Thereafter it will be visible and available for the entire financial year and archived. As far as data on IRP is concerned, it will be kept there only for 24 hours.
The businesses will generate the invoice at their system and hence that will not impact the servers of IRP.
The capacity of the system at IRP shall be built so as to handle the envisaged loads of simultaneous upload based on data reported in GSTR1 for the last two years.
Subsequently, multiple invoice registrars will be made available that will be able to distribute the load for invoice registration.
No. The transporter details must be entered in the E-Way bill system only.
Since the invoice generation is to happen at the business end this can be built into the ERP or invoicing system of the seller. Most such software provides this facility in the name of item master, supplier master, buyer master, etc.
from the source e-invoice portal
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.
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