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E-invoicing under New GST Return – What is GSTN’s e-Invoicing Software? & Implementation Date

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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 is not the generation of invoice on GST portal. It is a myth. e-invoicing is the submission of an already generated standard invoice on a common portal. Thus it automates multi-purpose reporting with a one-time input of invoice details.

Latest Updates

As on 10th October 2019
GST Council has approved the e-invoicing template and the mechanism. GSTN has released the finalised version of e-invoicing template as an announcement on the portal.

As on 20th September 2019
As per the decision that was taken at the 37th GST Council Meeting, the new GST return system for all taxpayers and for all forms will be implemented from April 2020.

In August 2019
GSTN has released a draft template of e-invoice for industry feedback by 20 August 2019 known as e-invoice schema.

1. What is E-invoicing?

‘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 proposed 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).

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 ANX-1/GST returns as well as generation of part-A of the e-way bills, as the information is passed directly by the IRP to GST portal.

2. What is the current system in place for issuing invoices?

Currently, businesses generate invoices through various softwares, and the details of these invoices are manually uploaded in the GSTR-1 return. The invoice information is thereafter reflected in 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 new return system, an annexure in form GST ANX-1 will mostly take the place of the GSTR-1 return. However, the process of generating and uploading invoice details will remain the same. It will be done by importing using the excel tool/JSON or by the online entry of data. A seamless flow of data is expected for e-way bill generation. e-invoicing will be the key tool to enable this.

3. How will Electronic invoicing benefit businesses?

Businesses will have the following benefits by using e-invoice initiated by GSTN:

      1. E-invoice resolves and plugs a major gap in data reconciliation under GST to reduce mismatch errors.
      2. E-invoices created on one software can be read by another, allowing interoperability and help reduce data entry errors.
      3. Real-time tracking of invoices prepared by the supplier is enabled by e-invoice.
      4. Backward integration and automation of the tax return filing process – the relevant details of the invoices would be auto-populated in the various returns, especially for generating the part-A of e-way bills.
      5. Faster availability of genuine input tax credit.
      6. Lesser possibility of audits/surveys by the tax authorities since the information they require is available at a transaction level.

4. What is GSTN’s e-invoicing initiative?

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 will contain 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.

5. When will E-invoicing get implemented?

While no exact date has been provided yet, electronic invoicing is proposed to be implemented from 1st January 2020. It will be implemented in a phased manner by GSTN. Similar to the new GST return filing system, the electronic invoicing system will first be available on a trial basis or voluntary compliance.

6. What is the process of getting an e-invoice?

The following are the stages involved in generating or raising an e-invoice.

1: Taxpayer must ensure to use the reconfigured ERP system as per PEPPOL standard. He must 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, at least. It should be capable of generating the JSON file for multiple invoices together. Those taxpayers not having any software will be provided offline utility. Also, small taxpayers having annual turnover below Rs 1.5 crore have the option to choose from 8 different accounting and billing softwares all tied up with the GSTN. It is available free of cost. It is available both as online (cloud-based) as well as offline (installed on the computer system of the user).

2: 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.

3: Upload the details of invoice especially mandatory fields onto the IRP using the JSON file only. It can be done directly or GSPs or through APIs(apps or software providers). The IRP will act as the central registrar for e-invoicing and its authentication. There are several modes of interacting with IRP such as web-based, API-based, SMS based, mobile app-based, an offline tool-based, and GSP based.

4: IRP will validate the key details of the B2B invoice, checks for any duplications and generates an invoice reference number (hash) for reference. The hash could have been generated by the taxpayer beforehand itself (Format of IRN or hash: Seller GSTIN, Invoice number, and FY in YYYY-YY). But then, it becomes valid and effective only once registered on IRP.

5: 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 recipient of the supply will also get intimated of the e-invoice generation through email (if provided in the invoice).

6: 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. ANX-1 of seller and ANX-2 of the buyer 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.

7. How will E-invoicing curb tax evasion?

It will help in curbing tax evasion in the following ways:

  • Tax authorities will have access to transactions as they take place in real-time since the e-invoice will have to be compulsorily generated through the GST portal.
  • There will be less scope for the manipulation of invoices since the invoice gets generated prior to carrying out a transaction.
  • It will reduce the chances of fake GST invoices and the only genuine input tax credit can be claimed as all invoices need to be generated through the GST portal. Since the input credit can be matched with output tax details, it becomes easier for GSTN to track fake tax credit claims.

7. What are the mandatory fields of an e-invoice?

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.

The following fields of an invoice must be compulsorily declared in an e-invoice:

 

Sl. no. Name of the field List of Choices/ Specifications/Sample Inputs Remarks
1 Invoice Type Max length: 10

Can be one of the following:

Reg/SEZP/SEZWP/EXP/EXPWP/DEXP

Denotation for regular, SEZ supplies with payment, SEZ supplies without payment, deemed exports, sale from the bonded warehouse, export without payment of tax, export with payment of tax
2 InvoiceType Code Max length: 50

Will be auto-generated by GSTIN based on the invoice type specified by the user

A subcode may also be automatically added by the GSTN
3 Supplier_GSTIN Max length: 15 

Must be alphanumeric 

GSTIN of the supplier raising the e-invoice
4 Invoice Number Max length: 16

Sample input is 

“ 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
5 Preceeding_Invoice_Reference Max length:16

Sample input is 

“ Sa/1/2019”

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
6 Invoice 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
7 Reverse Charge ‘Y’ or ‘N’ as a single character Mention whether or not the particular supply is subject to reverse charge mechanism
8 GSTIN Max length: 15 The GSTIN of the buyer to be declared here
9 State Code Max length: 2 The place of supply state code to be declared here
10 Place  Max length: 50 The place (locality/district/state) of the buyer on whom the invoice is raised/ billed to must be declared here if any
11 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
12 Unique Identification Number Abbreviated as ‘UUID’ 

Max length: 50

Sample input is ‘649b01ft’

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
13 ShippingTo_GSTIN Max length: 15 GSTIN of the buyer himself or the person to whom the particular item is being delivered to
14 Shipping To_State Max length: 100 State pertaining to the place to which the goods and services invoiced were or are delivered
15 Supply Type Max length: 2 

Sample values can be either of Supply/export/Job work

It can be either interstate or intrastate supply. Further, it can be outward or inward supply

 

Moreover, the supply can further be classified as import, export, job work, for own use,   return, sales return, others, SKD/CKD/Lots, line sales, recipients not known, exhibition or fairs

16 Transaction Mode Max length: 2

The schema specifies that the field can have either of regular/bill to/ship to

A combination of a ‘Bill To Ship To’ and ‘Bill From Dispatch From’  is also allowed
17 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 
18 Quantity Decimal (13,2)

Sample value is ‘10’

The number of items (goods or services) that is charged on the invoice as a line item.
19 Rate Decimal (10,2)

Sample value is ‘50’

The unit price, exclusive of GST, before subtracting item price discount, can not be negative
20 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
21 GST Rate Decimal (3,2)

Sample value is ‘5’

The GST rate represented as a percentage that is applicable to the item being invoiced
22 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
23 Total Invoice Value Decimal (11,2) The total amount of the Invoice with GST. Must be rounded to a maximum of 2 decimals

8. How does the e-invoice look like?

The e-invoice format is released by GSTN in consultation with the ICAI is as follows:

e-invoice

Check out the GSTN’s E-invoice Format

 
Find the Frequently Asked Question FAQs about E-invoicing