What is e-invoice in GST?
- ‘E-invoicing’ is a system in which Business to Business(B2B) invoices are authenticated electronically by GSTN for further use on the common GST portal.
- A unique Invoice Number is generated for each invoice by IRP. Along with invoice numbers, each invoice is digitally signed and added with QR code. This process collectively is called the e-invoicing under GST.
Why is e-Invoicing introduced?
Today, there are hundreds of accounting software that generate invoices and all of them have their formats to store the information. Although the information in the invoice remains the same, owing to this, the GST system cannot read and understand these invoices.
Benefits from e-invoice under GST:
- Elimination of fake invoices
- The substantial decrease in input credit verification issues
- the e-invoice data is sent to the buyer through the GST system, there is an opportunity for reconciliation with the purchase order.
- B2B use e-invoicing, data is sent directly from the supplier to the buyer’s AP system, eliminating the need for manual and multiple data entries
- E-Way bill can also be generated using e-Invoice data
When will e-invoicing be introduced?
- The e-invoice under GST was originally planned to be implemented on 1st April 2020. However, as per the 39th GST Council meeting held on 14th March 2020, the new date for introducing e-invoicing is 1st October 2020.
- To ensure that businesses have enough time to adapt to the new system of e-invoicing.
- Initially, this will be introduced voluntarily, to begin with.
- Taxpayers with a turnover exceed 500 crores can implement it on a voluntary (trial) basis from January 1, 2020.
- Those with a turnover exceed ₹100 crores can adopt it (on a voluntary trial basis) from February 1, 2020.
- The mandatory implementation of e-invoice is 1st October 2020
- The new date of e-invoicing is introduced or updated in the GST Council Meeting.
An e-invoice will be applicable Type of business to whom
It will be applicable to all the businesses whose aggregate turnover in a financial year exceeds 100 Crore.
Who should upload the e-invoice?
Under the e-invoice concept, the seller has to electronically upload the invoice to the IRP system and capture the IRN (Invoice Reference Number) and the recipient is issued the physical copy of the invoice.
Also, the IRP system is designed to email the digitally signed e-invoice with QR code to the supplier as well as the recipient.
Type of documents are to be reported or required for the GST system
The following documents are covered under the concept of e-invoice.
• Invoice by Supplier
• Credit Note by Supplier
• Debit Note by Supplier
• Any other document required by law
How is e-invoicing different from the current practice of invoicing?
E-invoice is a system in which the invoice needs to be electronically uploaded and authenticated with a unique invoice reference number (IRN). The current practice of issuing a physical invoice (printed) or electronic (ex.pdf version) invoice will not be impacted by E-invoicing practice.
The users would continue to see the physical or electronic (PDF/Excel) output of the invoices in the same manner as it existed before the incorporation of the e-Invoice standard in the software.
Modes of generating e-Invoice
Many modes are available so that the taxpayer can use the best mode based on his/her suitable form.
The following are different modes of generating e-Invoice are as under.
• Web-Based,
• API Based,
• SMS Based,
• Mobile App
• offline tool based and
• GSP based
