A Comprehensive Guide To E-Invoicing Under GST

All about E-invoicing under GST

In India, a number of compliance requirements are associated with GST. Among them, one is e-invoicing. All the businesses with turnover exceeding five crore must generate an e-invoicing.

But what is e-invoicing? Let’s find out!

What Is e-invoicing Under GST?

E-invoicing or electronic invoicing under GST (Goods and Services Tax) is a system where businesses generate invoices in a standardized electronic format with the help of GSTN.

This protocol came into effect in the 35th Council meeting of GST, where the members decided to implement an e-invoicing system that covers all types of enterprises, especially large ones.

Now, let’s understand how the system works.

Every invoice generated receives a unique identification number from the Invoice Registration Portal (IRP), which is managed by the GST Network (GSTN).  Then, the invoice details are automatically sent to the e-way bill portal or the GST portal in real-time. This removes the need for manual data entry when creating invoices, making the process faster and more accurate.

Benefits of e-Invoicing For Businesses

●     E-invoicing simplifies and streamlines the invoicing process and ensures real-time reporting of transactions.

●     Automated data entry reduces mistakes that can happen when entering information manually.

●     The procedure of invoice generation gets speed up, leading to quicker payments.

●     Saves money on paper, printing, and storing physical invoices.

Who Should Generate E-invoice?

What are the Exceptions To E-Invoicing Applicability?

The below entities are exempted from the requirement to generate e-invoices, regardless of their turnover.

●     Special Economic Zones (SEZ) Units: Businesses operating within SEZs are not required to generate e-invoices, except SEZ developers.

●     Non-Banking Financial Companies (NBFCs)

●     Insurance Companies: Entities providing insurance services are exempt from e-invoicing.

●     Banks and other financial institutions

●     Goods Transport Agencies (GTA): Businesses involved in the transportation of goods.

●     Providers of passenger transportation services.

●     Government departments and local authorities

●     Other Notified Entities

Documents Required For e-invoicing

Below is the list of documents required for e-invoicing under Section 34 of the CGST Act:

●     Credit notes

●     Tax invoices

●     Debit notes

Transactions

●     Taxable Business-to-Business (B2B) sale of services or goods,

●     Business-to-government sale of services or goods, exports, deemed exports, supplies to SEZ (with or without tax payment),

●     SEZ developers

●     Stock transfers or supply of services to specific persons and

●     Supplies under reverse charge are covered by Section 9(3) of the CGST Act.

How To Get An E-invoice?

Below are the steps involved in generating e-invoice.

●     Before starting the procedure, make sure your billing software or ERP system is updated to meet the PEPPOL e-invoicing standards.  

●     For IRN generation, you can use either of the two methods below.

➔    Whitelist your computer system’s IP address on the e-invoice portal for direct API integration or use a GST Suvidha Provider (GSP).

➔    Download a tool that lets you upload bulk invoices at once. This tool creates a JSON file to upload to the e-invoice portal and generate IRNs in bulk.

●     Use your billing software to make the invoice. Include details like the billing name and address, supplier’s GSTIN, total value, item prices, GST rates, and tax amounts.

●     Upload the invoice details in a JSON file through an app or GST service provider, or directly through the API. You can also interact with the Invoice Registration Portal (IRP) using SMS or a mobile app.

●     The IRP validates the invoice details, checks for duplicates, and generates an Invoice Reference Number (IRN). The IRN is based on four parameters: Seller GSTIN, invoice number, financial year, and document type (invoice, debit note, or credit note).

●     The IRP digitally signs the invoice and creates a QR code in the output JSON for the supplier. The supplier receives an email notification about the e-invoice generation if an email address is provided in the invoice.

●     The IRP sends the authenticated invoice details to the GST portal for GST returns. If applicable, details are forwarded to the e-way bill portal.

●     You can print the invoice as usual with your logo. The e-invoicing system only requires you to report invoices electronically to the IRP.

Frequently Asked Questions (FAQs)

1.     What is E-Invoicing under GST?

E-invoicing, or electronic invoicing, is a system where B2B invoices are validated and authenticated online through the GST Network (GSTN). Each invoice gets a unique identification number from the Invoice Registration Portal (IRP).

2.     Can I still print my invoices after generating an e-invoice?

Yes, you can print your invoices as usual with your logo.

3.    Is there any time limit for generating an e-invoice?

Before 30th April 2023, there was no time limit. However, from 1st May 2023, taxpayers with an Annual Aggregate Turnover (AATO) of ₹100 crore or more must generate e-invoices within seven days of the invoice date. Further, the GST department deferred the 7-day reporting time limit by three months as of 6th May 2023, with a new implementation date yet to be announced.