This article explains the top 10 things that you need to know about e-invoicing under GST by the government for the betterment of GST procedures and to fight the issues taxpayers are facing. It is now mandatory for the taxpayers.
What is e-invoicing?
E-invoice, also known as an electronic invoice, is an electronic mechanism under GST. In this mechanism, every B2B invoice is generated by a particular business that has an aggregate turnover of more than Rs. 500 Cr will have to be authenticated electronically on the GSTN portal. Further, for managing all the invoices, the IRP or the invoice registration portal has to issue a unique identification number for each invoice that is called the invoice reference number (IRN). Once the invoice authenticates, its details should be available on the EWB portal or the GST portal in real-time.
E-invoicing benefits
Even before the emergence of the GST era, the government is trying to fight the issue of tax leakage and fraud using fake invoices. The government gave the idea of E-invoicing in India so that it can successfully put an end to it. They did it by mandating the authorization and authentication of every invoice that has been generated by the government portal. The implementation of e-invoicing under GST is beneficial for taxpayers as well besides plugging the tax leakage. Some of its major benefits are as follows:
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- Easy and clear ITC claim.
- One-time reporting of all the invoicing details for the taxpayers’ GST filling.
- Provides automated return filling process as the obligatory details should be auto-populated for different returns and even the EWB.
- A reduction in invoice mismatches during the reconciliation process.
- Gives real-time tracking of the invoices that suppliers prepare.
- Lastly, the standard system for invoicing means interoperability between numerous software.
How to generate the e-invoice in GST?
If a taxpayer needs to generate the e-invoice in GST, he/she needs to follow these steps below:
- The help of accounting or billing software allows generating an invoice as per the given format for e-invoicing.
- A supplier then generates a unique IRN or invoice reference number with the help of a standard hash-generation algorithm. However, the generation of this IRN is optional by the supplier. If there is an absence of the IRN, then the invoice registration portal (IRP) system of the government will generate it.
- If the generation of JSON file for every B2B invoice and of the IRN completes in time then this information gets on the IRP (invoice registration portal).
- The registration portal will then validate the respective hash/IRN that is attached with JSON if it is uploaded by the supplier or it generates an IRN and authenticates the files against the GST’s central registry for duplication. Now, the IRN will be the unique identity number of a particular e-invoice for the rest of the financial year.
- After its successful verification, they update the invoice with the digital signature of the IRP on the invoice data, and then they add a quick response code to that JSON file.
- The uploaded data is then shared with the e-way bill and also the GST system. They use it for the auto-population of the GST return.
- The IRP will send the digitally signed JSON file with the QR code and the IRN back to the supplier. Also, the invoice will be sent to the buyer on their respective registered email ids.
Details in the e-invoice
The e-invoice contains the following details as per the draft format that the GSTN generates.
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- E-invoice schema: This contains the technical field name as well as the description of each field. Also, it specifies if a field is compulsory or not. E-invoice schema has a few sample values along with some explanatory notes.
- Masters: This part will specify a certain set of inputs for particular fields that are already defined by the GSTN itself. It also includes fields such as supply type, UQC, invoice type, state code, etc.
- E-invoice template: The E-invoice template is as per the rules of GST and it enables the reader to correlate to the terms that we use in other sheets. The compulsory fields are always in green color whereas optional fields are present in the color yellow.
Software that taxpayers can use to generate an e-invoice in GST
There is a contemporary belief that only a common portal can generate an e-invoice under GST. But it is not the case. Taxpayers can generate the e-invoice through any application or software or tool that supports the required e-invoicing format.
Information required for generating e-invoice in GST
We require the following information if a taxpayer needs to generate the e-invoice under GST:
- Supplier GSTIN
- Authorization by the designed authority
- Supplier’s invoice number
- Details of supply
- The financial year in YYYY-YY
- Types of supply
- First, if it attracts TCS/TDS
- Second, if it is B2B or B2C
- Third, if it is an export, supply made to SEZ or the deemed export
- And last, if it attracts RCM
- Details of supplier and consignee
Official websites for e-invoice generation
All the taxpayers can use these given common GST electronic portal for the generation of e-invoices in the terms of rule 48(4):
- gst.gov.in
- gst.gov.in
- gst.gov.in
- gst.gov.in
- gst.gov.in
- gst.gov.in
- gst.gov.in
- gst.gov.in
- gst.gov.in
- gst.gov.in
Is QR code mandatory for it?
A QR-code or quick response code based on e-invoice is compulsory only if these conditions are met:
- They supply to some unregistered person.
- The aggregate turnover of the taxpayers is exceeding Rs. 100 Cr.
The quick response code should contain all these details:
- Unique IRN or invoice reference number (hash)
- GSTIN of supplier
- Number of line items
- GSTIN of recipient
- Invoice value including taxable value and gross text
- Invoice number that the supplier gives
- HSN code of the main item or the item that is having the highest taxable value
- Lastly, the date of the generation of the invoice
Can taxpayers make amendments to an e-invoice?
Yes. The taxpayers can always amend an e-invoice. But, the amendments can only be done on the GSTN portal itself.
Can a taxpayer cancel the e-invoice?
The answer is no. The taxpayer cannot cancel the e-invoice partially. His/her invoice under GST should be fully canceled and it should be reported to the IRN within the time limit of 24 hours. If the cancellation of an e-invoice under GST is done after 24 hours of its generation, then it cannot be reported to the IRN portal. In that case, the taxpayers have to manually cancel or update their invoice on the GST portal before their returns are filed.