What is B2C e-Invoicing: Applicability, Date, Requirements, Limit, Examples

The scope of e-invoicing is expanding, and it’s time we discuss what that means for B2C transactions. Announced after the 54th GST Council meeting on 9th September 2024, this shift is expected to bring greater transparency to consumer-facing businesses. 

As a Finance leader, you're probably wondering: What exactly is B2C e-invoicing? How will it affect your operations? And most importantly, how can your business prepare for this change? In this article, we’ll walk you through everything—from what B2C e-invoicing entails to the key benefits and challenges—so you can make informed decisions moving forward.

In this article-

• What is B2C e-invoicing, and why does it matter for your business?
• The objectives and importance of B2C e-Invoicing
• Key dates: When is B2C e-Invoicing going live?
• A quick look at how B2C e-Invoicing works in practice
• Who needs to comply, and what are the requirements?
• Are there any limits or thresholds for B2C e-invoicing?
• The benefits you can expect from adopting this system
• Challenges to watch out for during implementation
• FAQs to address common concerns

What is B2C e-invoicing?

B2C e-invoicing implies the electronic invoicing requirement under GST for certain taxpayers, who make a taxable supply of goods and services to end-consumers and raise tax invoices. 

Businesses that raise such B2C GST invoices should report these to the Invoice Registration Portal (IRP) authorised by the GST Network. In turn, their invoices will be verified and authenticated by the IRP (on behalf of the GSTN). Each e-invoice generated will get a unique Invoice Reference Number (IRN) and a QR code containing details of such authentication.

Objectives of B2C e-invoicing

The objective of introducing e-invoicing for B2C transactions was to reduce tax evasion and improve compliance. The importance of B2C e-invoicing is that it ensures businesses record all B2C transactions accurately and report them in the GST returns to duly cover these under the tax net. Further, B2C e-invoicing aims to improve business efficiency, is environmentally friendly, and is inclined to cost efficiency to sectors such as the retail and e-commerce.

B2C e invoice implementation date

The GST Council introduced a pilot B2C e-invoicing system at its 54th meeting, held on 9th September, 2024. The system will be run on a pilot and voluntary basis in select sectors/States before launching its full-scale rollout. We can expect a CBIC notification on this matter in a few weeks and the pilot runs starting in a month or two.

Applicability of e-invoicing in B2C

Only certain sectors and States would be initially covered in the pilot run of the B2C e-Invoicing system. Although there is no official announcement of the list of sectors and states. Yet, the 9th September press release by PIB highlighted that the retail sector will immensely benefit from B2C e-invoicing. 

This indicates that the pilot will most probably cover the organised retail players in the Indian market making annual turnover above a certain threshold, for instance, Rs.500 crore or Rs.1000 crore. Furthermore, the government would want to implement the pilot in tech-first segments such as quick commerce, e-commerce, OIDAR, online gaming, banking, and insurance.

How B2C e-invoicing works?

Newly added businesses must enable e-invoicing and register on either of six IRPs. The applicable businesses can continue creating tax invoices for B2C transactions on their Accounting/Billing/ERP Systems. They should report these to the GSTN, i.e., to one of the six IRPs, such as the Clear IRP. 

Typically, Order Management Systems (OMS), billing systems or Point of Sale (POS) Machines are used for billing at consumer-facing retail outlets. Usually, all the sales are consolidated towards the end of the day and passed as a single entry on the ERP of the enterprise. 

Teams must report each invoice data in a predefined JSON format called the INV-01 schema. Hence, direct integration with IRP is recommended to ensure minimal business disruption and near real-time processing. 

After verification, the IRP returns a signed e-invoice with a unique ‘Invoice Reference Number (IRN)’ and a signed QR code. Ultimately, the team can issue the e-invoice to the recipient consumer containing the QR code via email or any other communication mode. It is expected that GSTN would set a definite time limit to issue such e-invoices to the consumers, for instance, 48 hours from the time and date of sale.

Requirements for e-invoicing in B2C

Currently, there are no particular requirements set out by the government for B2C e-Invoicing. We can expect an update through a CBIC notification and circular in due course of time.

Limits of e-invoicing in B2C

There is no threshold limit in turnover fixed by the GSTN/government for imposing the requirement of B2C e-invoicing. We expect the pilot run will be applicable only to large-sized businesses that have good tech-support to begin with.

Benefits of e-invoicing for B2C

The following are the benefits expected from implementing the B2C e-invoicing system-

• Brings uniformity and standardisation across industries, ensuring consistency in B2C invoices.
• Reduces cases of invoice manipulation and fraudulent transactions since the invoices are digitally authenticated by GSTN.
• Consumers would receive validated and accurate invoices, increasing trust and transparency in the billing process.
• Ensures that all B2C sales are accurately reported in real-time as it eliminates underreporting of sales in GSTR-1, thereby reducing the scope for tax evasion.

Challenges of B2C e-invoicing

With a new B2C e-invoicing system expected to be implemented in the near future, a lack of preparedness/training by applicable businesses would lead to numerous challenges, listed below-

IT Team: Enterprises may need to invest in good IT infrastructure to support a seamless generation of B2C e-invoicing if they had not established earlier. Ensuring 100% system uptime and managing complex integrations across multiple data sources (ERPs, PoS) can be overwhelming, especially when dealing with real-time e-invoice generation and compliance with security policies.

Sales Person: Additional data requirements for B2C invoice reporting slow down operations, particularly during peak hours, leading to customer frustration and potential errors in data entry.

Sales Manager: Training the sales team to adapt to new processes while ensuring all sales are recorded digitally and reported correctly to the government adds significant responsibility.

Warehouse Team: Timely generation of e-invoices and e-way bills is critical for shipments, and managing expiring e-way bill extensions manually or handling sales returns via finance team adds to the operational burden.

Tax/Finance Team: Consolidating and reconciling data from various sources to ensure accurate tax liability reporting in GSTR-1 is crucial but challenging, especially with the added complexity of real-time B2C e-invoicing.

How to evaluate technology for B2C e-invoicing?

Scalability and Performance: Ensure the system handles high transaction volumes and has 100% uptime

Compliance and Accuracy: Adhere to GST regulations and enable easy updates for compliance.

Integration and Compatibility: Ensure seamless integration with ERP systems and robust APIs.

Security and Data Protection: Implement strong encryption and comply with data privacy regulations. 

Cost Efficiency: Balance initial costs and operational expenses for scalable solution.

Vendor Support and Reliability: Choose a vendor with a strong reputation for reliability and customer services.

How can Clear help with B2C e invoicing?

Clear e-Invoicing is a prominent and reliable solution for unified e-invoicing and e-way bill compliance with over 700M+ e-invoices handled on the platform and backed by multiple IRPs, including Clear IRP. Here's how you benefit-

• B2C e-invoicing successfully launched in KSA and Malaysia and in pipeline over 5+ countries 
• Enjoy seamless smart integration and rapid deployment with minimal disruption, backed by expert teams for smooth ERP/billing system integration
• One of the 4 official IRPs, approved by GSTN, processing 1 in every 4 e-invoice in India
• Platform built for scale and extendability - 99.9% uptime systems built with national infrastructure mindset
• EINV Latency is under 200 ms and recon matching speed is less than 10 mins (for 1L vs 1L documents)  with invoice Ingestion scale of up to 1.5 GB under 30 min
• 24*7 technical and customer support with AI-enabled chat assistant 
   

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