E-invoicing under GST denotes electronic invoicing defined by the GST law. Just like how a GST registered business uses an e-way bill while transporting goods from one place to another. ‘E-Invoicing’ or ‘Electronic Invoicing’ is a system in which B2B invoices and a few other documents are authenticated electronically by GSTN for further use on the common GST portal. E-invoicing does not imply the generation of invoices on the GST portal but it means submitting an already generated standard invoice on a common e-invoice portal. Thus, it automates multi-purpose reporting with a one-time input of invoice details. The CBIC notified a set of common portals to prepare e-invoice via Notification No. 69/2019 – Central Tax. Under the electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP). All invoice information gets transferred from this portal to both the GST portal and the e-way bill portal in real-time. Therefore, it eliminates the need for manual data entry while filing GSTR-1 returns and generation of Part A of the e-way bills, as the information is passed directly by the IRP to the GST portal.

Benefits

• E-invoice resolves and plugs a major gap in data reconciliation under GST to reduce mismatch errors.
• E-invoices created on one software can be read by another, allowing interoperability and helping reduce data entry errors.
• Real-time tracking of invoices prepared by the supplier is enabled by e-invoice.
• Backward integration and automation of the GST return filing process — relevant invoice details are auto-populated in returns, especially for generating Part A of e-way bills.
• Faster availability of genuine input tax credit.
• Lesser possibility of audits/surveys by tax authorities since transaction-level information is available.
• Faster and easier access to formal credit routes such as invoice discounting or financing, especially for small businesses.
• Improved customer relations and growth prospects for small businesses to do business with large enterprises.

How can e-invoicing curb tax evasion?

• Tax authorities will have access to transactions as they take place in real time since the e-invoice must be generated through the GST portal.
• There will be less scope for manipulating invoices because the invoice gets generated before carrying out a transaction.
• It reduces chances of fake GST invoices — only IRP-registered invoices (with IRN) are treated as genuine, making it easier for GSTN to match input tax credit with output details and track fake claims.

Applicability

• Turnover Criteria or E-invoice Limit

Phase Aggregate Turnover of more than Applicable date

I Rs. 500 Crores 01.10.2020 II Rs. 100 Crores 01.01.2021 III Rs. 50 Crores 01.04.2021 IV Rs. 20 Crores 01.04.2022 V Rs. 10 Crores 01.10.2022 VI Rs. 5 Crores 01.08.2023 • Transactions and Documents Criteria Transactions – Taxable Business-to-Business sale of goods or services, Business-to-Government sale of goods or services, exports, deemed exports, supplies to SEZ (with or without tax payment), stock transfers or supply of services to distinct persons, SEZ developers and supplies under reverse charge covered by Section 9(3) of the CGST Act. Documents – Tax Invoices, Credit notes and Debit notes under Section 34 of the CGST Act.

Exceptions

However, irrespective of the turnover, E-invoicing shall not be applicable to the following categories of registered persons for now, as notified in CBIC Notification No. 13/2020 – Central Tax, amended from time to time:

Notified Businesses –

• 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
• An SEZ unit (excluded via CBIC Notification No. 61/2020 – Central Tax)
• A Government department and local authority (excluded via CBIC Notification No. 23/2021 – Central Tax)
• Persons registered in terms of Rule 14 of CGST Rules (OIDAR)

Transactions – Any Business-to-Consumers (B2C) sales, Nil-rated or non-taxable or exempt B2B sale of goods or services, nil-rated or non-taxable or exempt B2G sale of goods or services, imports, high sea sales and bonded warehouse sales, Free Trade & Warehousing Zones (FTWZ) and supplies under reverse charge covered by Section 9(4) of the CGST Act. Documents –Delivery Challans, Bill of supply, financial or commercial credit note or debit note, bill of entry and ISD invoices. What data will be included in an e-invoice? As per the draft format generated by the GSTN, an e-invoice will contain the following parts:

• E-invoice schema: This part will consist of the technical field name and the description of each field. It will also specify if a field is mandatory or not and has a few sample values along with explanatory notes.
• Masters: Masters will specify the set of inputs for certain fields that are pre-defined by GSTN itself. It includes fields like UQC, State Code, Invoice type, supply type, etc.
• E-invoice template: The template is as per the GST rules and enables the reader to correlate the terms used in other sheets. The mandatory fields are marked in green and the optional fields are marked in yellow.

How will the system of e-invoicing be integrated with GST Returns? An e-invoice will be uploaded into the relevant GST return only once it has been validated and registered by the invoice registration system. After the validation has been done, it will be visible to the recipient for viewing and taking action (in the new return system). The main aim of the tax department is to enable the pre-population of GST returns which will reduce reconciliation related problems. Once e-invoicing has been implemented, the data in the invoices can be pre-populated into the relevant tables of the tax returns without the need for fresh data entry. Amendment of e-invoices All amendments to an e-invoice can be made only on the GST portal. Cancellation of e-invoices An e-invoice cannot be partially cancelled; it has to be cancelled fully. Once you cancel an e-invoice, it has to be reported to the IRN within 24 hours. No cancellation post 24 hours of upload is allowed on the IRN and needs to be manually cancelled on the GST portal before the returns are filed.

How to register for an e-invoicing system?

• If you have registered your business on the e-way bill (EWB) portal, then you can use the same credentials to log in to the e-invoicing portal as well.
• If you have not registered in the EWB portal, then you can register in the e-invoicing system directly. The taxpayer should have a GSTIN and mobile number registered in the GST portal.

Here’s a flow diagram that you can follow to register:

Process of getting an e-invoice

• The taxpayer has to ensure the use of a reconfigured ERP system as per PEPPOL standards. He could coordinate with the software service provider to incorporate the standard set for e-invoicing, i.e. e-invoice schema, and must have the mandatory parameters notified by the CBIC at least.
• Any taxpayer has primarily two options for IRN generation:
  • The IP address of the computer system can be whitelisted on the e-invoice portal for a direct API integration or integration via GST Suvidha Provider (GSP).
  • Download the bulk generation tool to bulk upload invoices. It will generate a JSON file that can be uploaded to the e-invoice portal to generate IRNs in bulk.
• The taxpayer must thereafter raise a regular invoice on that software. He must give all the necessary details like billing name and address, GSTIN of the supplier, transaction value, item rate, GST rate applicable, tax amount, etc.
• Once either of the above options is chosen, raise the invoice on the respective ERP software or billing software. Thereafter, upload the details of the invoice, especially mandatory fields, onto the IRP using the JSON file or via an application service provider (app or through GSP) or through direct API. The IRP will act as the central registrar for e-invoicing and its authentication. There are several other modes of interacting with IRP such as SMS-based and mobile app-based.
• IRP will validate the key details of the B2B invoice, check for any duplications and generate an invoice reference number (hash) for reference. There are four parameters based on which IRN is generated: Seller GSTIN, invoice number, FY in YYYY-YY and document type (INV/DN/CN).
• IRP generates the invoice reference number (IRN), digitally signs the invoice and creates a QR Code in Output JSON for the supplier. On the other hand, the seller of the supply will get intimated about the e-invoice generation through e-mail (if provided in the invoice).
• IRP will send the authenticated payload to the GST portal for GST returns. Additionally, details will be forwarded to the e-way bill portal, if applicable. The GSTR-1 of the seller gets auto-filled for the relevant tax period. In turn, it determines the tax liability.

A taxpayer can continue to print his invoice as being done presently with a logo. The e-invoicing system only mandates all taxpayers to report invoices on IRP in electronic format.