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The e-Invoicing system under GST was implemented from 1st October 2020 for taxpayers with an aggregate turnover exceeding Rs.500 crore. E-invoicing was extended to businesses with an aggregate turnover exceeding Rs.100 crore from 1st January 2021. On 8th March 2021, the CBIC also notified applicability of the e-invoicing system from 1st April 2021 for businesses with total turnover ranging between Rs.50 crore to Rs.100 crore. Aggregate turnover for e-invoicing will include the turnover of all GSTINs under a single PAN across India. This article covers various FAQs on the e-invoicing system under GST.
Electronic invoicing or e-Invoicing is a system of raising invoices, under which invoices generated by one software can be read by any other software, eliminating the need for any fresh data entry or errors. In simpler words, it is an invoice generated using a standardised format, where the electronic data of the invoice can be shared with others, thus ensuring the interoperability of data.
e-Invoicing is mandatory from 1st October 2020 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 limit 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.
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:
Here are some of the e-Invoicing benefits:
Yes, the e-invoice scheme applies to reverse charge mechanism (RCM) transactions as well.
To calculate e-invoicing eligibility, the preceding year’s turnover, beginning from FY 2017-18, should be considered. Hence, if a business’ turnover exceeds the prescribed limit in a financial year, it would be required to generate e-invoices from the beginning of the next financial year. For example, if the threshold turnover was exceeded in FY 2020-21, then e-invoicing will be applicable from 1st April 2021.
The aggregate turnover for e-invoicing is to be calculated as per the definition under Section 2(6) of the Central Goods and Services Tax (CGST) Act. For FY 2017-18, the aggregate turnover is to be computed from 1st July 2017 until 31st March 2018.
e-Invoicing currently applies to:
that are made by the notified class of taxpayers.
No, e-invoicing is not applicable to nil-rated or wholly-exempt supplies as in these cases, only a bill of supply is issued and not a tax invoice.
No, only credit and debit notes that are issued under Section 34 of the CGST or SGST Acts need to be reported to the IRP.
Under the e-Invoicing model, businesses will continue to generate invoices on their respective ERPs just as was being done in the past. Only the standard, schema and format for the generation of invoices will be specified, to ensure a level of standardisation and the machine-readability of these invoices. The generation of the Invoice will be the responsibility of the taxpayer.
While generating, it needs to be reported to the Invoice Registration Portal (IRP) of GST. The IRP will generate a unique Invoice Reference Number (IRN) and adds the digital signature for the e-Invoice, along with the OR code. The QR Code will contain vital parameters of the e-Invoice and return the same to the taxpayer who generated the document in the first place. The IRP will also send the signed e-Invoice to the seller on the registered email ID.
The workflow of an e-Invoice involved two major parts. The first part is the interaction between the business/supplier and the Invoice Registration Portal (IRP). The supplier generates an invoice and uploads the JSON file of that invoice to the IRP. The IRP validates the data contained in that invoice and generates an IRN and QR code, as well as digitally signs the invoice, before returning it back to the supplier.
The second part is the interaction between the IRP and the GST/E-Way Bill systems. The e-invoice data gets sent to the GST system, where the GSTR-1 return gets auto-populated. The e-invoice data also gets sent to the e-way bill system, where Part A of the e-way bill gets generated, and if transporter details are provided, then Part B gets generated as well. If not, Part B can be generated at a later point in time. Hence, e-invoicing has reduced a taxpayer’s workflow to a large extent by eliminating multiple data entries.
The process to create an e-invoice varies with the following four methods:
In case of bulk generation of IRN using offline too, download the offline tool available on the portal: https://einvoice1.gst.gov.in/. Enter the invoice details and validate the entries. Generate the JSON file and upload it after logging into the portal. For the rest of the methods, the taxpayer must register his APIs by logging into the e-invoice portal and use the API credentials to connect and generate IRN and e-way bill.
The e-Invoice format is exhaustive. It caters to different industries and businesses using a single format. Here is an example of an e-Invoice format.
As per the draft format generated by the GSTN, an e-Invoice will contain the following parts-
All businesses need to issue e-invoices using the same e-invoice schema laid down by the GSTN. The schema has mandatory and non-mandatory fields. All taxpayers are required to fill mandatory fields. Specific businesses can use non-mandatory fields as per their requirement.
The maximum number of line items allowed per e-Invoice is 1000.
The provisions of Rule 46 of the Central Goods and Services (CGST) Rules, 2017 apply here. According to Rule 46, the signature/digital signature of the supplier or his authorised representative is required while issuing invoices. However, a proviso to Rule 46 states that the signature/digital signature shall not be required in the case of issuance of an electronic invoice that is in accordance with the provisions of the InformationTechnology Act, 2000. Hence, it has been interpreted that in the case of e-invoices, a supplier will not be required to sign/digitally sign the document.
No, there will be no place-holder provided in the e-Invoice scheme for a company’s logo. The company can provide for the same in its accounting/billing software, however, the logo will not get sent to the IRP.
Under Rule 48(4) of the CGST Rules, a notified person has to prepare an invoice by uploading the specified particulars in Form GST INV-01 on the IRP, after obtaining an IRN. Rule 48(5) further states that any invoice issued by such notified persons in any manner other than the manner specified in Rule 48(4) shall not be treated as an invoice. Hence, an invoice or debit/credit note shall become legally valid only with an IRN if it’s being issued by a notified person.
At present, there is no such validation on the IRP.
The following documents will be covered under e-Invoicing-
Multiple modes will be made available for getting e-Invoices registered on the Invoice Registration Portal (IRP). Some of the proposed modes are-
Here are the prerequisites for the generation of e-invoices:
Anyone can verify the correctness of an e-invoice by uploading the signed JSON into the e-invoice system, by selecting the option ‘Verify Signed Invoice’ under the ‘Search’ option. One can also download the QR Code Verify app and verify the QR code printed on the invoice.
No, the e-invoice system checks in the Central Registry of the GST system to ensure that the same invoice from the same supplier belonging to the same financial year is not being uploaded again for generating more than one IRN. The IRP will reject such invoices.
No, once an IRN is cancelled, the same invoice number cannot be used again to generate another invoice. If used again, the IRP will reject the same.
Yes, if such suppliers who sell through an e-commerce entity are notified persons who are supposed to report invoices under Rule 48(4), then the e-commerce operator can generate e-invoices on behalf of them. For more information on the impact of e-invoicing on e-commerce operators, you can refer to this detailed article.
An e-invoice cannot be partially cancelled, it has to be cancelled fully. Once cancelled, it will need to be reported on the IRN within 24 hours. Cancellation done after 24 hours cannot be done on the IRN and needs to be manually cancelled on the GST portal in the GSTR-1 return, before the same is filed.
All amendments to an e-invoice can be made only on the GST portal in the GSTR-1 return.
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 taxpayer for viewing and editing in the GSTR-1 return. From the supplier’s GSTR-1 return, the data will be further auto-populated into the recipient’s (buyer’s) GSTR-2A/2B/4A or 6A as applicable.
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.
No, invoices will continue to be generated on the individual ERP software that is currently in use by businesses. The invoice must conform to the e-Invoicing standard and include the mandatory parameters. The direct generation of invoices on a common portal will not happen.
No, there is no time limit at present in the system.
The GSTN has released several advisories clarifying that the auto-population of details from e-invoices into the GSTR-1 is only a facility extended to taxpayers. The statutory obligation to file an accurate GSTR-1, as per the documents raised during the relevant tax period, lies with the taxpayer.
Also, owing to validations in the GSTR-1, there is a possibility that some e-invoices reported may not get auto-populated in the relevant tables of the GSTR-1, though the same may be available in the downloadable Excel file on GSTR-1 dashboard (with the corresponding error description). This data may be corrected and re-uploaded by the taxpayers before filing their GSTR-1.
Hence, the taxpayer shall verify the data in each field and file the same, in light of the relevant legal provisions. Besides the auto-populated e-invoices, taxpayers are required to add details of any other supplies made during the tax period, in the respective tables of the GSTR-1.
On the GST portal (online method): Use the ‘Reset’ button available at the bottom of the GSTR-1 dashboard. This will delete all the details from the GSTR-1 tables (including the records auto-populated from e-invoice). To delete only certain records, go inside the relevant table of the GSTR-1 and select record(s) and click on ‘Delete’ in the action column (in the ‘Processed Invoices/Documents’ table).
Using the offline utility: One can delete the records following the steps given below:
Yes, details of invoices can be entered in bulk in an excel based bulk converter tool, available on the e-invoice portal. Thereafter, the JSON file must be generated and uploaded on the e-invoice portal after logging into it. The IRN and QR code shall be generated in the form of a response JSON file.
On the IRP, the data will remain for only 24 hours. However, once an invoice has been registered and validated, it will be uploaded into the relevant GST return where it will be available for the entire financial year.
If your account gets frozen on the e-invoice portal, it means that either you have either cancelled your registration or your GSTIN has been deactivated on the GST common portal. A taxpayer should visit the GST common portal and check the status of his GSTIN under the ‘Search Taxpayer’ tab. If you are able to log in to the GST portal but not the e-invoice portal, then you can raise a complaint at https://selfservice.gstsystem.in/.
A time limit is not yet notified for reporting invoices on the IRP. However, an invoice is considered valid only after its registration on the Invoice Registration Portal (IRP). Once uploaded on the IRP, the same will be registered immediately on a real-time basis.
Since every electronic invoice is verified and authenticated by the IRP on behalf of GSTN, they are legally valid.
Some of the countries that have already adopted the system of e-Invoicing are South Korea, Brazil, Chile, Mexico, Canada, Norway, Sweden, Turkey, Italy, Denmark, Peru, etc.
The GSTN, in partnership with the ICAI (Institute of Chartered Accountants of India), drafted the e-Invoice standard. This refers to PEPPOL (Pan European Public Procurement Online), which is based on the UBL (Universal Business Language) standard. This takes into account the requirement under tax laws and has features that are required for international trade. Certain features which are made mandatory under the GST law have also been marked as mandatory fields in the e-invoice. Other features are marked as optional fields. Businesses may choose not to enter the optional fields.
Yes, e-invoice compliance is mandatory for export transactions as well. The e-invoice system allows the declaration of export invoices as well as zero-rated supplies.
No, e-invoicing is not applicable for import transactions/bills of entry.
Yes, SEZ developers have to issue e-invoices if their turnover crosses the specified limit, and they fulfil other conditions listed in the relevant notification. Only SEZ units have been exempted from issuing e-invoices.
No, e-invoicing is not applicable to invoices issued by an ISD.
In this situation, the SEZ unit is exempt from e-invoicing, but e-invoicing will still be applicable to the DTA unit. This is because the aggregate turnover of the legal entity, in this case, exceeds the notified limit. The turnover is to be calculated as per the definition of Section 2(6) of the CGST Act, which is based on the ‘aggregate turnover’ of the common PAN.
The obligation to issue an e-invoice as per the terms of Rule 48(4) lies with the concerned taxpayer, on fulfilment of the prescribed conditions. However, as a facilitation measure, all taxpayers who have crossed the prescribed turnover in any financial year from FY 2017-18 onwards have been enabled to report invoices to the IRP.
One can search the status of enablement of a GSTIN on the e-invoice portal by navigating to ‘Search’ -> ‘e-invoice status of the taxpayer’.
This listing of GSTINs is based only on the turnover of GSTR-3B as was reported to the GSTN. It may also contain exempt entities or entities for whom e-invoicing is not applicable due to some other reason. Hence, enablement status does not necessarily mean that the taxpayer is required to generate e-invoices. The turnover slab of a taxpayer can also be checked on the GST portal by going to the ‘Search Taxpayer’ / ‘Know Your Supplier’ tab.
There is no precise list of taxpayers who are required to generate e-invoice, as the fulfilment of conditions that are prescribed for e-invoicing (For example, the crossing of the turnover threshold, exemptions, nature of supplies made, etc.) are dynamic in nature. However, taxpayers can access the list of GSTINs that are eligible for or actually generating IRNs on the IRP. This list is updated on a periodic basis.
The list can be accessed on the e-invoice portal by navigating to ‘Others’ – ‘GSTINs Generating IRN’. This list may contain the names of exempt entities also but who might have been shown as enabled for e-invoice, and hence the onus lies with the taxpayer to check the conditions and abide by the law. A recipient of supplies may always verify this with their supplier.
Yes, a supplier, as well as the buyer, can print the e-invoice using the QR code on the signed e-invoice returned by the IRP.
As of now, e-invoice provisions are not applicable to B2C transactions. However, a seller is required to display a dynamic QR code on B2C invoices as per Notification No. 14/2020 – Central Tax dated 21.03.2020, read with Notification No. 6/2021 – Central Tax dated 30.03.2021.
The QR code contains the following data:
