e-Invoicing mandatory for business with INR 5+ Cr turnover starting 1st Aug' 2023

e-Invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices are authenticated electronically on the Invoice Registration Portal (IRP) for further use on the common GST portal.

e-Invoicing was initially made applicable to businesses with turnover exceeding Rs.500 crore from 1st October 2020. It got extended to businesses with turnover exceeding Rs.100 crore from 1st January 2021. Thereafter, the government notified that businesses with more than Rs.50 crore turnover to comply from 1st April 2021. Currently, businesses with more than Rs.20 crore are implementing it from 1st April 2022. Next, the government notified applicability of e-invoicing to those with turnover more than Rs.10 crore from 1st October 2022. Recently, the CBIC notified the applicability of e-invoicing to those businesses with turnover of more than Rs.5 crore.It is important to note that the taxpayer should comply with e-invoicing if their turnover exceeds the specified turnover in any financial year from 2017-18 onwards up to 2021-22.

e-Invoice schema is the standard for issuing e-invoices, which lists the mandatory and optional fields in the e-invoice and the descriptions and explanatory notes for each field.

The e-invoices generated need to be reported to an Invoice Registration Portal (IRP), which will then validate the invoice and return it along with an Invoice Reference Number (IRN) and QR Code digitally signing it.

An Invoice Reference Number (IRN) is a unique code issued for every e-invoice (it is a hash-based on three parameters) in technical terms. It is a combination of the supplier GSTIN, invoice number and financial year.

• Minimal data entry errors
• Interoperability of e-invoices
• Reduced effort in GST return filing
• Auto-creation of e-way bills
• Genuine ITC claims by buyers
• Reduced fraud and tax evasion
• Real-time tracking of e-invoices
• Easy verification by tax authorities

• B2B invoices issued by the supplier (including RCM transactions)
• Credit notes issued by the supplier pertaining to B2B invoices
• Debit notes issued by the supplier pertaining to B2B invoices
• Any other document as required by the law from time to time

The invoice will be considered invalid if it does not contain an IRN. Hence, it is suggested to immediately upload invoices to the IRP on a real-time basis so that the IRN can be generated and placed on the invoice.

Yes, IRNs can be generated in bulk on the IRP. Even though the taxpayer uploads invoices in bulk, the invoice’s approval will be done one at a time. The IRP will be able to handle a large sequence of invoices for registration and validate them. Essentially, bulk upload of invoices will be required by large taxpayers who generate a large number of invoices. Their ERP or accounting system will have to be designed so that it makes requests one by one. For the user, it will not make any difference.

• Step 1: Generation of the invoice on the taxpayer’s respective ERP system
• Step 2: Generation of IRN (can be done on the respective ERP or through the IRP)
• Step 3: Upload the JSON file of the e-invoice (along with hash/IRN, if generated) to the IRP for validation
• Step 4: The IRP will generate/validate the hash/IRN and will add a digital signature and QR code, and return the JSON to the taxpayer
• Step 5: The IRP will share this invoice data with the e-way bill system and the GSTN

When the IRP returns the signed JSON along with the QR code, it can be considered that the IRP has approved the e-invoice. The QR code will contain the GSTIN of the supplier, the buyer, the invoice number and date, HSN codes of major commodities, IRN, etc. (Note: The QR code will not have the status of an invoice.)

The IRP will validate the e-invoice and reject it if the GSTIN is wrong. A duplicate invoice number is found, or any other errors will return the invoice with the relevant error codes without registering the same.

The IRP will validate for GSTIN correctness and whether the invoice already exists in the system. The IRP also validates all the data submitted via the JSON file.

No, the details will be stored in the IRP for only 24 hours, after which the same will be available in the GSTN in the GSTR-1 return.

No, the IRP will only return the signed JSON to the respective supplier, and the IRP will do no sharing of PDF copies or mailing of JSONs/PDFs to the respective supplier and the buyer. The PDF copy of the invoice can be generated by the supplier using the QR code that the IRP returns.

Yes, the supplier is also allowed to send the JSON and the PDF to the buyer. Further, the supplier can also share/distribute a business invoice to the buyer (having multiple fields as per the business’ needs). However, it needs to ensure that the business invoice contains all the mandatory fields prescribed in the e-invoice schema.

No, with machine readability, the need for printing will be eliminated. Moreover, the QR code will enable easy validation of the contents of an e-invoice.

It is mandatory to print the QR code on the e-invoice. Even if a business prints the invoice in its format, it still needs to contain the QR code returned by the IRP, as this QR code will also contain the IRN.

No, bills of supply and delivery challans will not be required to have an IRN.

ISD invoices and ISD credit notes will be issued by an Input Service Distributor (ISD), and no IRNs will be required on the same. On the other hand, exporters have to issue tax invoices and would be required to generate IRNs.

e-Invoicing/IRN generation is only applicable to creators of an invoice/document, and hence, a bill of entry will not be required to have an IRN.

e-Invoices reported to the IRP can be amended through the GSTN, and no amendment is permitted through the IRP. Cancellation of e-invoices can be made within 24 hours post generation. Once cancelled, the same number cannot be used for any other invoice. In case of cancellation of an e-invoice, it can be done using the acknowledgement number or IRN as per the availability.

Yes, the IRP will push the data to the GST portal, and the data will be populated in GSTR-1 of the seller.

Yes, but the seller needs to properly annotate them to clarify which QR code represents which e-invoice.

Yes, for the B2B e-invoices, the IRP will generate the QR code. For the B2C e-invoices, the taxpayer has to generate the QR code using their algorithms internally. It is important to note that only specified entities need to generate QR code for B2C invoices.

e-Invoicing involves submitting an already generated standard invoice on a common e-invoice portal or invoice registration portal for validation and authentication by the GST Network.

e-Invoicing was made mandatory from 1st October 2020 applicable to all businesses whose aggregate turnover has exceeded the Rs.500 crore limit in any of the previous financial years from 2017-18 to 2019-20. From 1st January 2021, e-invoicing became applicable to businesses exceeding the Rs.100 crore turnover in any of the financial years between 2017-18 to 2019-20. Likewise, it was extended to businesses with a total turnover of more than Rs.50 crore from 1st April 2021. The government later extended the e-invoicing system to businesses having more than Rs.20 crore turnover from 1st April 2022. From 1st October 2022, it was made applicable to those with a turnover of more than Rs.10 crore up to Rs.20 crore. From 1st August 2023, it was extended to those businesses with more than Rs.5 crore turnover.

However, e-invoicing shall not be applicable to the following categories of registered persons irrespective of the turnover, as notified in the CBIC Notification No.13/2020 – Central Tax: 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)

The GST rules provide the e-invoice requirement under sub-rule (4), (5) and (6) of rule 48. It applies to individual taxpayers only. So, the rest of the taxpayers must follow standard invoicing provisions. The e-invoice system requires intimation of all the B2B supply transactions to the government by way of uploading invoices on the IRP (invoice registration portal). A taxpayer can first generate an invoice or the debit or credit note on his accounting software/ERP. Thereafter, he/she must upload the invoice on the IRP. On uploading the invoice, a unique Invoice Reference Number (IRN) will be issued against each invoice. Non-generation of e-invoices will imply non-intimation of supply transactions to the government. Any invoice issued by the applicable taxpayer without the IRN is considered an invalid invoice under the GST law. In other words, it is regarded as a non-issue of invoice and thus attracts various penalties as listed in the next section.

Failure to generate IRN is considered as a failure of issuance of invoice. This is laid down in sub-rule (5) of rule 48 of the CGST Rules. Penalties under various sections of GST will be levied as listed in the next section.

Non-issuance of e-invoice is an offence under GST and thus attracts penal provisions. Below are some of the penalties for non-issuance of invoice or issuance of incorrect invoice:Penalty for non-issuance of invoice- 100% of the tax due or Rs.10,000, whichever is higher.Penalty for incorrect invoicing is Rs.25,000.inline CTA

E-Invoicing is applicable only for B2B transactions.