GST has been applicable in India since 1st July 2017. It subsumed many existing indirect taxes, such as value-added tax, service tax etc., but many other things changed. While a new tax came into existence, a whole new taxation system also did.
An invoice is also interchangeably understood as a bill. The term e-invoice has been introduced under GST, and it is assumed that an e-invoice is an invoice generated through the GST Portal. However, it is a different concept.
Table of Contents
What Is An e-Invoice Under GST?
E-invoicing under GST is notified under Rule 48(4) of CGST Rules. Accordingly, a registered person class has to upload a copy of their invoices on the Invoice Registration Portal (IRP).
Applicability of GST e-Invoice
1. As of 1st April 2022, GST e-invoicing will be applied to registered persons whose aggregate turnover in the previous financial year exceeds INR 20 crore.
For example, XYZ Ltd. has a yearly turnover in the following manner.
FY 2018-19 – INR 19 crore
FY 2019-20 – INR 21 crore
FY 2020-21 – INR 18 crore
In the above case, XYZ Ltd. will have to generate e-invoices from 1st April 2022, even though its turnover in FY 2020-21 is less than INR 20 crore since it has crossed INR 20 crore previously.
2. This is the limit applicable if the turnover of any registered business exceeds INR 20 crore in any financial year starting from FY 2017-18 to 2021-2022. Also, this turnover will include the turnover of all the GST numbers registered under one single PAN in India.
3. Also, this applies to businesses involved in B2B supplies, supplies to Special Economic Zones (with or without payments), exports (with or without payments), and deemed exports.
GST e-invoice is not applicable to –
1. GST e-invoice does not apply to nil-rated supplies and exempt supplies.
2. GST e-invoice does not apply to the following sectors –
- Insurers
- Banking companies, financial institutions, non-banking financial institutions (NBFCs)
- Goods transportation agency that provides services of transportation of goods via goods carriage.
- Businesses that are suppliers of passenger transportation services.
- Businesses that supply services by way of admission to an exhibition of cinematograph films on multiple screens.
- Persons that are registered as OIDAR.
3. It does not apply to invoices issued by an Input Services Distributor.
How to Upload an Invoice on IRP?
All registered persons to whom e-invoicing is applicable have to upload their invoices on Invoice Registration Portal (IRP). You can upload invoices on IRP by executing the following steps-
1. The supplier has to generate invoices in his accounting or billing system.
2. The invoices generated must be in the standard invoice format.
3. The accounting or billing software of the supplier should generate the invoice data in JSON format.
4. The seller can then upload the JSON format invoices to IRP, GST Suvidha Providers (GSPs), or any software.
Generation of IRN through IRP
1. Once the invoices are uploaded on IRP, the portal will generate an Invoice Reference Number (IRN) depending upon the supplier’s details.
2. The IRP will digitally sign the invoice and create a QR Code for the invoices in JSON formats.
3. The IRP will share the data with the GST Portal for GST Returns and to the e-way Bill system wherever applicable.
4. The GSTR-1 of the seller will be updated accordingly and will be reflected in the GSTR-2A of the buyer also.
5. The buyer can use the QR Code created by the system to view his invoice and check the Input Tax Credit available to him in GSTR-2A.
Documents Required for e-Invoicing
The records needed to conduct the e-invoicing process are-
1. Invoices
2. Debit Note
3. Credit Note
Benefits of e-Invoicing
While e-invoicing is different from than normal invoicing process and may seem like a task, there are some sure shot benefits of e-invoicing which are as follows.
1. The e-invoicing process will bring standardisation to your invoices, and all the invoices will be in the same format.
2. It will automatically generate your invoices for GST Returns and e-way bills.
3. The e-invoicing process will reduce the time of invoicing process, as the invoices will need to be uploaded only once, and the system will auto-populate the data.
4. It will simplify B2B transactions, as the data will be auto-captured in the GSTR-1 return.
5. From the data generated via e-invoicing, the buyer can easily reconcile the data with his purchase register.
6. It helps reduce costs for a business by avoiding the repetition of processes and thereby helps improve the efficiency of the company.
From the above, one can understand that e-invoicing is very important for B2B suppliers. e-invoicing can help maintain a proper flow of information between the supplier and the buyer, thus avoiding confusion. Because of e-invoicing, businesses can avail input tax credit on time and reduce tax liability.
