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The transportation of goods from one place to another is facilitated by the filing of ‘E-Way Bills’ on the common GST portal. Similarly, the GST Council, in its 35th meeting, has decided to implement a system of e-invoicing, which will be applicable to specified categories of persons.
e-Invoicing does not imply the generation of invoice on GST portal. That would be a myth. Instead, e-invoicing involves the submission of an already generated standard invoice on a common e-invoice portal. Thus it automates multi-purpose reporting with a one-time input of invoice details.
ClearTax provides the best-in-class e-invoicing software solution for enterprises. It offers variety of modes through which e-invoice can be generated by the companies such as the seamless API integrations or Excel mode or the FTP/SFTP. The user can enjoy numerous value additions such as reconciliation vis-a-vis e-way bill and GSTR-1 data, insightful reports, customised print template for e-invoice, data archiving, etc.
‘E-invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal.
Under the electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP) to be managed by the GST Network(GSTN). The first IRP was launched by the National Informatics Centre at einvoice1.gst.gov.in.
All invoice information will be transferred from this portal to both the GST portal and e-way bill portal in real-time. Therefore, it will eliminate the need for manual data entry while filing GSTR-1 return as well as generation of part-A of the e-way bills, as the information is passed directly by the IRP to GST portal.
Currently, businesses generate invoices through various softwares, and the details of these invoices are manually uploaded in the GSTR-1 return. Once the GSTR-1 is filed by the respective suppliers, the invoice information is reflected in form GSTR-2A for the recipients for viewing only. On the other hand, the consignor or transporters must generate e-way bill by again importing the invoices in excel or JSON manually.
Under the e-invoicing system to be implemented from 1st October 2020, the process of generating and uploading invoice details will remain the same. It will be done by importing using the excel tool/JSON or via API integration, either directly or through a GST Suvidha Provider (GSP). The data will seamlessly flow to GSTR-1 preparation and for the e-way bill generation too. The e-invoicing system will be the key tool to enable this.
Businesses will have the following benefits by using e-invoice initiated by GSTN:
GSTN had released the draft version of e-invoice format in an excel template and made it available for public feedback around 20 August 2019. The same was approved by the GST Council with some alterations at the 37th GST Council meeting held on 20 September 2019. GSTN associated with ICAI drafted the format to be compliant with the GST and other Indian tax laws. Apart from these, the format adheres to international and various industry standards. The e-invoice format looks exhaustive and a single format caters to different industries and businesses.
Any existing accounting or invoicing software/ application provider (SAP/Tally/Busy) must follow the PEPPOL standard for invoice generation. Taxpayers will, therefore, be able to generate a compliant invoice at the source. GSTN referred the PEPPOL (Pan European Public Procurement Online) standard, which works on Univeral Business Language (UBL) version of electronic XML.
Currently, PEPPOL is the most used standard across the globe. The system advocates diversified business applications and trading communities to exchange information along their supply chains using a common or a standard format. It enables a single point of data entry into electronic commerce for businesses. Thereafter, the data flows across different portals with the help of an IRP.
The GSTN’s e-invoice contains the following parts:
(1) E-invoice schema: It consists of the technical field name, description of each field, whether it is mandatory or not, and has a few sample values along with explanatory notes.
(2) Masters: Masters will specify the set of inputs for certain fields, that are pre-defined by GSTN itself. It includes fields like UQC, State Code, invoice type, supply type, etc.
(3) E-invoice template: The template is as per the GST rules and enables the reader to correlate the terms used in other sheets. The mandatory fields are marked in green and optional fields are marked in yellow.
The taxpayers with annual aggregate turnover of over Rs 500 crore can voluntarily generate e-invoices starting from 7th January 2020 through APIs. Whereas, the taxpayers with the turnover over Rs.100 crore but less than Rs.500 crore could join them from 1st February 2020. The electronic invoicing was to be mandatorily implemented from 1st April 2020 but has been pushed to 1st October 2020 for taxpayers with turnover over Rs.500 crore. The aggregate turnover will include the turnover of all GSTINs under a single PAN, across India.
The following are the stages involved in generating or raising an e-invoice.
1: The taxpayer has to ensure to use the reconfigured ERP system as per PEPPOL standard. He could coordinate with the software service provider to incorporate the standard set for e-invoicing, i.e. e-invoice schema (standards) and must have the mandatory parameters notified by the CBIC, at least.
2: Any taxpayer has got primarily two options for IRN generation.
(1) The IP address of the computer system can be whitelisted on the e-invoice portal for a direct API integration or integration via GST Suvidha Provider (GSP).
(2) Download the Bulk generation tool to bulk upload the invoices. It will generate a JSON file which can be uploaded on the e-invoice portal to generate IRNs in bulk.
3: The taxpayer must thereafter raise a normal invoice on that software. He must give all the necessary details like, billing name and address, GSTN of the supplier, transaction value, Item rate, GST rate applicable, tax amount, etc.
4: Once either of the above options is chosen, raise the invoice on the respective ERP softwares or billing softwares. Thereafter, upload the details of invoice especially mandatory fields onto the IRP using the JSON file or via application service provider (app or through GSP) or through direct API. The IRP will act as the central registrar for e-invoicing and its authentication. There are several other modes of interacting with IRP such as SMS-based and mobile app-based.
5: IRP will validate the key details of the B2B invoice, checks for any duplications and generates an invoice reference number (hash) for reference. There are four parameters based on which IRN is generated: Seller GSTIN, Invoice number, and FY in YYYY-YY) and document type (INV/DN/CN).
6: IRP generates the invoice reference number (IRN), digitally signs the invoice and creates a QR code in Output JSON for the supplier. On the other hand, the seller of the supply will get intimated of the e-invoice generation through email (if provided in the invoice).
7: IRP will send the authenticated payload to GST portal for GST returns. Additionally, details will be forwarded to the e-way bill portal, if applicable. The GSTR-1 of the seller gets auto-filled for the relevant tax period. In turn, it determines the tax liability.
A taxpayer can continue to print his invoice as being done presently with logo. e-invoicing system only mandates all taxpayers to report invoices on IRP in electronic format.
It will help in curbing tax evasion in the following ways:
E-invoice must primarily adhere to the GST invoicing rules. Apart from this, it should also accommodate the invoicing system or policies followed by each industry or sector in India. Certain information is made mandatory whereas the rest of them is optional for businesses.
Many fields are also made optional and users can choose to fill up relevant fields only. It has also provided a description for every field along with the sample inputs for the interested users. One can see that certain required fields from the e-way bill format are included now in e-invoice such as the sub supply type.
Below is the gist of the contents of latest e-invoice format as notified on 30th July 2020:
The following fields must be compulsorily be declared in an e-invoice:
|Sl. no.||Name of the field||List of Choices/ Specifications/Sample Inputs||Remarks|
|1||Document Type Code||Enumerated List such as INV/CRN/DBN||Type of document must be specified|
|2||Supplier_Legal Name||String Max length: 100||Legal name of the supplier must be as per the PAN card|
|3||Supplier_GSTIN||Max length: 15
Must be alphanumeric
|GSTIN of the supplier raising the e-invoice|
|4||Supplier_Address||Max length: 100||Building/Flat no., Road/Street, Locality, etc. of the supplier raising the e-invoice|
|5||Supplier_Place||Max length: 50||Supplier’s location such as city/town/village must be mentioned|
|6||Supplier_State_Code||Enumerated list of states||The state must be selected from the latest list given by GSTN|
|7||Supplier Pincode||Six digit code||The place (locality/district/state) of the supplier’s locality|
|8||Document Number||Max length: 16
Sample can be “ Sa/1/2019”
|For unique identification of the invoice, a sequential number is required within the business context, time-frame, operating systems and records of the supplier. No identification scheme is to be used|
|9||Preceeding_Invoice_Reference and date||Max length:16
Sample input is
“ Sa/1/2019” and “16/11/2020”
|Detail of original invoice which is being amended by a subsequent document such as a debit and credit note. It is required to keep future expansion of e-versions of credit notes, debit notes and other documents required under GST|
|10||Document Date||String (DD/MM/YYYY) as per the technical field specification||The date when the invoice was issued. However, the format under explanatory notes refers to ‘YYYY-MM-DD’. Further clarity will be required. Document period start and end date must also be specified if selected.|
|11||Recipient_ Legal Name||Max length: 100||The name of the buyer as per the PAN|
|12||Recipient’s GSTIN||Max length: 15||The GSTIN of the buyer to be declared here|
|13||Recipient’s Address||Max length: 100||Building/Flat no., Road/Street, Locality, etc. of the supplier raising the e-invoice|
|14||Recipient’s State Code||Enumerated list||The place of supply state code to be selected here|
|15||Place_Of_Supply_State_ Code||Enumerated list of states||The state must be selected from the latest list given by GSTN|
|16||Pincode||Six digit code||The place (locality/district/state) of the buyer on whom the invoice is raised/ billed to must be declared here if any|
|17||Recipient Place||Max length: 100||Recipient’s location (City/Town/Village)|
|18||IRN- Invoice Reference Number||Max length: 64
Sample is ‘a5c12dca8 0e7433217…ba4013 750f2046f229’
|At the time of registration request, this field is left empty by the supplier. Later on, a unique number will be generated by GSTN after uploading of the e-invoice on the GSTN portal. An acknowledgement will be sent back to the supplier after the successful acceptance of the e-invoice by the portal. IRN should then be displayed on e-invoice before use.|
|19||ShippingTo_GSTIN||Max length: 15||GSTIN of the buyer himself or the person to whom the particular item is being delivered to|
|20||Shipping To_State, Pincode and State code||Max length: 100 for state, 6 digit pincode and enumerated list for code||State pertaining to the place to which the goods and services invoiced were or are delivered|
|21||Dispatch From_ Name, Address, Place and Pincode||Max length: 100 each and 6 digit for pincode||Entity’s details (name, and city/town/village) from where goods are dispatched|
|22||Is_Service||String (Length: 1) by selecting Y/N||Whether or not supply of service must be mentioned|
|23||Supply Type Code||Enumerated list of codes
Sample values can be either of B2B/B2C/ SEZWP/S EZWOP/E XP WP/EXP WOP/DE
|Code will be used to identify type of supply such as business to business, business to consumer, supply to SEZ/Exports with or without payment, and deemed export.|
|24||Item Description||Max length: 300
The sample value is ‘Mobile’
The schema document refers to this as the ‘identification scheme identifier of the Item classification identifier’
|Simply put, the relevant description generally used for the item in the trade. However, more clarity is needed on how it needs to be described for every two or more items belonging to the same HSN code|
|25||HSN Code||Max length: 8||The applicable HSN code for particular goods/service must be entered|
Sample value is ‘50’
|The unit price, exclusive of GST, before subtracting item price discount, can not be negative|
|27||Assessable Value||Decimal (13,2)
Sample value is ‘5000’
|The price of an item, exclusive of GST, after subtracting item price discount. Hence, Gross price (-) Discount = Net price item, if any cash discount is provided at the time of sale|
|28||GST Rate||Decimal (3,2)
Sample value is ‘5’
|The GST rate represented as a percentage that is applicable to the item being invoiced|
|29||IGST Value, CGST Value and SGST Value Separately||Decimal (11,2)
Sample value is ‘650.00’
|For each individual item, IGST, CGST and SGST amounts have to be specified|
|30||Total Invoice Value||Decimal (11,2)||The total amount of the Invoice with GST. Must be rounded to a maximum of 2 decimals|
The e-invoice format notified is as follows:
1. To whom will e-Invoicing apply?
A: e-Invoicing system shall apply to the GST registered persons whose aggregate turnover in the financial year exceeds Rs 500 crore. However, exceptions include Special Economic Zones (SEZ) units, insurance, banking, financial institutions, NBFCs, GTA, passenger transportation service and sale of movie tickets.
2. Can an e-Invoice be cancelled partially/fully?
A: An e-Invoice cannot be cancelled partially but can be cancelled wholly. On cancellation, it must be reported into the IRN within 24 hours. Any attempt to cancel thereafter, cannot be done on the IRN and needs to be manually cancelled on the GST portal before the returns are filed.
3. Will the bulk-uploading of invoices for generation of IRN be possible?
A: No, invoices must be uploaded one at a time into the IRP. The ERP of a company will need to be designed so that it can place the request for the upload of individual invoices.
4. Will there be a facility for e-invoice generation on the common GST portal?
A: No, invoices will continue to be generated on the individual ERP softwares that are currently in use by businesses.
The invoice must adhere to the e-Invoicing standard format and include the mandatory parameters. The direct generation of invoices on a common portal is not being planned at the moment.
5. What are the types of documents that are to be reported into the IRP?
A: The documents that will be covered under e-Invoicing system are as follows-
For more FAQs on E-invoicing, read our article on E-Invoicing FAQs.