The e-invoicing system was introduced with the objective of providing better taxpayer services, reduction in tax evasion, increasing efficiency in the administration of GST and many other benefits.
In this article, let us know how the face of invoicing changes with the e-invoicing system as compared to the present system of raising invoices.
|Sl. No.||Point of comparison||Under the present system of invoicing||Under the e-invoicing system|
|1.||Applicability||All taxpayers||Those taxpayers making B2B supplies or exports with an aggregate annual turnover more than Rs.500 crore in any preceding financial year (FY 2017-18 onwards) must generate e-invoice from 1st October 2020 (Applicable to those with more than Rs.100 crore as turnover from 1st January 2021)|
|2.||Physical invoice||A physical invoice will continue to be generated as per the rules prescribed under the Act. There is no change in how an organisation issues physical invoices|
|3.||Reporting of invoices on the GST portal||Manual typing-in of invoice details, JSON upload, accounting/billing software that use the API to upload invoices.||Same as the present system, but invoices have to follow the prescribed schema and contain the mandatory parameters.|
|4.||Invoice Reference Number||There was only the concept of the invoice number and not an invoice reference number. No prescribed format/conditions in this regard were present except that the invoice number had to be assigned sequentially.||Invoice Reference Number generated through Hash generation algorithm must be used under e-invoicing system. The objective is to allow easy comparison of e-invoices through unique IRN validated on the Central Registry and stored for future reference.|
|5.||Dispatch of e-invoice||GST portal did not contain any facility for validation and downloading of invoices.||Validated e-invoices are sent to the supplier to their registered e-mail ID.|
|6.||Digital Signature||Only supplier’s digital signature was required on the invoice and there was no facility for digital signing of uploaded invoices by GSTN/GST portal.||Validated invoices will be digitally signed by the IRP.|
|7.||QR code||Invoices could not be verified on the basis of a QR code.||Validated invoices will also contain QR code generated by IRP. This will enable verification of invoices even when internet facility is not available. It is mandatory for B2C transactions to have QR code.|
|8.||Possibility of mistakes||Higher possibility of mistakes since higher manpower involvement.||Much lower possibility of mistakes since once the JSON of invoice details is uploaded and verified on the IRP, GSTR-1 of seller is updated. Further, e-Way bill details under Part A are also filled up, wherever applicable.|
|9.||Amendment of invoice||Amendment/cancellation facility available on GST portal and can be made as per law||E-invoice is only available for 24 hours with the IRP during which time the invoice can be fully cancelled. After that, the invoice can be amended as per GST laws on the GST portal.|
|10.||Viewing the invoice||Invoice details entered could be viewed on the GST portal||Necessary invoice details can be made available on an app that can scan the QR code. Further, e-invoices are sent as an e-mail ID so the supplier can always save a copy under the e-invoicing system.|
|11.||Verification of invoice||Not easy to verify the genuineness of an invoice during an inspection||Easy to verify the genuineness by scanning QR code and also checking of IRN|
|12.||Possibility of search||Relatively higher possibility of a search by the department||Lower possibility of a search by the department since invoice details at the transaction level is already available with them.|