E-Invoicing


Established 1993


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E-INVOICING IN THE GST REGIME : AN IN-DEPTH EXPLORATION

The primary objective behind the implementation of E-invoicing is to mitigate fraudulent practices. Various business entities employ diverse invoicing methods, prompting the government to promote a standardized and uniform invoicing approach through E-invoicing. It's important to note that E-Invoicing doesn't entail creating invoices on the GST portal; rather, it entails submitting pre-generated standard invoices to a centralized portal. This process streamlines multipurpose reporting by automating it with a one-time input of invoice details.

E-Invoicing has been implemented in a phased manner from October 2020 as stipulated below:

Sr No	Applicability (Aggregate Turnover above Rs)	Effective Date
1	500 Cr	01-Oct-2020
2	100 Cr	01-Jan-2021
3	50 Cr	01-Apr-2021
4	20 Cr	01-Apr-2022
5	10 Cr	01-Oct-2022
6	5 Cr	01-Aug-2023

Brief on the Process of Generating E-Invoice:

As a one-time step, generating of the log-in credentials on GST E-Invoking Portal
Creating invoice under normal course of business (manually or on ERP system) with all the mandatory fields as per the GST Law (Name, Address, GSTIN, Place of Supply etc.)
Creating Jason file for uploading on GST E-invoicing portal – This can be prepared using the offline utility available on portal or this offline utility can be linked to the ERP system of taxpayer to generate the Jason file. The taxpayer need to configure the IT set-up for the same and need to make sure that all the mandatory fields as per GST Law are entered in the ERP. System integration can be done through the help of registered GST Suvidha Providers.
Validating the Jason file and uploading the same on the GST E-invoicing portal.
Generating the IRN -The Invoice Reference Number (IRN) is a unique number which is generated by the e-invoice system using a hash generation algorithm. For every document submitted, a unique 64 character IRN would be generated
Downloading the E-Invoice from the E-Invoicing portal within 24 hrs. of its generation.

E-Invoicing shall not be applicable to the following categories of registered persons, irrespective of their turnover:

An insurer or a banking company or a financial institution including an NBFC
A Goods Transport Agency (GTA)
A registered person supplying passenger transportation services
A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services.
Input Service Distributor.
An SEZ unit

Benefits of E-invoicing:

Real time tracking of invoices: E-invoicing allows real-time tracking of invoices prepared by a supplier. This facilitates faster availability of input tax credit (ITC).
Reporting of B2B invoices in GSTR-1: Under e-invoicing, a taxpayer has to report the invoices just once, and get it authenticated by the Invoice Registration Portal (IRP), which validates the invoice and issues the Invoice Reference Number (IRN). Upon authentication, the details are auto-populated in the GSTR-1 return, this reduces the manual reporting process that was carried out previously.
Easy creation of e-way bill: E-invoicing facilitates the easy generation of the e-way bill as the taxpayer only updates vehicle details. The details in Part-A of e-way bill gets auto-populated from E-invoice that is authenticated on the GST portal.
Reduction in data entry errors: Under the E-invoicing system, the invoice is uploaded on the common portal, which facilitates multipurpose reporting. All the invoices once authenticated get transferred to the GST portal and e-way bill portal on a real-time basis. This auto-population eliminates the need of manual data entry while filing the GST returns, and thus reduces data entry errors.
Curb tax evasion: Real-time access to data reduces the scope of manipulation of invoices. This further reduces the scope of fake GST invoices, and only genuine ITC can now be claimed. As the input tax credit and output tax details are readily available, it is easier for the tax officials to track fake input credits.

Under the current system of E-invoicing only B2B Invoices are covered, however the maximum frauds take place in B2C invoices as no ITC is involved. Given this fact, still E-Invoicing is the biggest and a positive move under the GST law.

Curated By:

Yash Jain