What is an e-invoicing and e-invoicing Schema?
The GST Council has approved the introduction of 'E-invoicing' or 'electronic invoicing' in a phased manner for reporting of business to business (B2B) invoices to the GST system. In continuation to that, recently the Central Board of Indirect Taxes and Customs (CBIC) has notified that the e-invoicing will be implemented from 1st October 2020 for the taxpayers whose turnover is more than Rs 500 crore.
What is an Invoice Registration Portal (IRP)?What is an Invoice Registration Portal (IRP)?
E-invoices generated need to be reported to an IRP which will validate invoice and return back with IRN and QR Code.
What is an Invoice Reference Number (IRN)?
It is a unique code (in technical terms hash of 3 parameters - well known hash generation algorithm e.g. SHA256). It is a combination of supplier GSTIN, invoice number and financial year.
What type of documents are covered under e-Invoicing?
- Invoice issued by supplier (including RCM transactions)
- Credit note issued by supplier
- Debit note issued by supplier
- Any other document as required by the law from time to time
Is it mandatory to generate IRN within 24 hours?
Yes, there would be a time limit for e-invoice upload for registration and the same would be notified by the Government. Without registration of e-invoice, the same will not be valid. Once uploaded to the invoice registration portal (IRP), it will be registered immediately, on real-time basis
Can IRN be generated in bulk?
Invoices must be uploaded on IRP one at a time. The IRP will be able to handle a large sequence of invoices for registration and validate them. Essentially, bulk upload will be required by large taxpayers who generate a large number of invoices. Their ERP or accounting system will have to be designed in such a way that it makes requests one by one. For the user, it will not make any difference.
What is an E-invoice end to end workflow?
Step 1: Generation of invoice in respective ERP systems.
Step 2: Generation of IRN (can be done through to respective ERPs or through IRP).
Step 3: Upload JSON file of e-invoice (along with hash/IRN, if generated) to IRP for validation.
Step 4: IRP will generate / validate the hash/IRN and will add its signature and QR code return the JSON to customerStep 4: IRP will generate / validate the hash/IRN and will add its signature and QR code return the JSON to the customer.
Step 5: IRP will share the data with the e-way bill system and GSTN system.
What indicates that IRP has approved the e-invoice?
IRP will return a signed JSON along with a QR code. QR code will contain GSTIN of supplier and buyer, invoice number and date, HSN of major commodity, IRN, etc. (Note: QR code will not have the status of an invoice.
Can IRP reject the submitted invoice?
IRP will validate the e-invoice and will reject if wrong GSTIN or duplicate invoice number is found. It will return the invoice with relevant error codes without registering.
WWhat validations are conducted by IRP?
IRP will validate for GSTIN correctness and whether the invoice already exists in the system.
Does the IRP provide an archiving facility?
No, the details will be stored in IRP for 24 hours, and then the same can be available in GSTN in GSTR-1.
Will IRP return the signed invoice PDF / mail it to respective supplier and buyer?
No, IRP will only return signed JSON Supplier and no sharing of PDF copy or mailing of JSONs / PDFs will be done by IRP to respective buyers and sellers. PDF copy of invoice can be generated by supplier using QR code that is returned by IRP
Is the supplier allowed to distribute e-invoice to the buyer?
Yes, supplier is also allowed to distribute JSON as well as PDF. Further, the supplier is also free to share/distribute business invoice to the buyer (having multiple fields as per the business needs). However, it needs to ensure that business invoice is having all the mandatory fields as prescribed in e-invoice schema
Is printing of e-invoice PDF mandatory?
No, with machine readability the need for printing will be eliminated. Moreover OR code will enable the validation of contents of an e-invoice.
- Whether QR code will be required to be printed on the invoice:
If the invoice is printed by the Company, it needs to contain QR code returned by IRP. QR code will also contain IRN.
- Whether non-tax invoices / documents will be subjected to IRN:
No, Bill of supply and delivery challan will not be required to generate an IRN
- Whether IRN will be required for ISD and Export transactions:
ISD invoice and ISD Credit note will be issued by an Input Service Distributor and IRN will be required on the same. Further, exporters also have to issue tax invoices and would be required to generate IRN.
- Whether importers are required to generate IRN:
E-invoicing / IRN generation is only applicable to the creator of an invoice/ document and hence, Bill of Entry will not be required to obtain an IRN.
What is the process of amendment / cancellation of an e-invoice?
E-invoice reported to IRP can be amended through GSTN and no amendment is permitted through IRP. In case of cancellation of invoice, it can be done by uploading the IRN or following:
- Document type
- Document number
- Document date
Once cancelled the same number cannot be used for any other invoice.
Will e-invoice be mapped to GSTR-1 by IRP?
Yes, the IRP will push the data to the GST portal and the data will be populated in GSTR-1* of the seller.
*Subject to CBIC notification
Will Transporter ID be a part of the e-invoice schema?
Yes, Transporter ID parameter will be created in e-invoice and Part A of EWB will be auto populated from the e-invoice itself.
Can e-commerce companies generate e-invoices for sellers on their platform
The matter has been taken up with the Government to generate e-invoices on behalf of the sellers provided the sellers explicitly authorize them to do so
Will TCS mechanism change after the implementation of e-invoicing?
No, the invoice will be issued by the supplier and not the e-commerce operator and therefore TCS is not a part of the e-commerce operator invoice.
Is the physical copy of an invoice needed for movement of goods?
Relevant changes will be notified by the Government
Is it possible to have more than one QR code on the invoice?
Yes, but seller needs to properly annotate them to clarify which QR code represents which invoice
Large business (> 500 crores) has both B2B and B2C transactions. Will they also be required to print QR codes on the invoices?
Yes, for the B2B invoices the IRP will generate QR code. For the B2C invoices, the taxpayer has to internally generate the QR code.