E-invoicing under GST - Meaning, Applicability, Process, and More

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E-invoicing Under GST

When the GST law was introduced back in 2017, there were many loopholes that the taxpayers took advantage of. As issues like fake invoicing, tax leakage, ITC frauds came to light, the GST council made necessary changes to the law and introduced e-way bills. This made it necessary for every registered person to generate an e-way bill, on the common portal, before transporting goods from one place to another.  

Then to put more strict compliance of invoicing and to curb the fraud practices, the GST council proclaimed the system of e-invoicing, in its 35th meeting. Initially, e-invoicing was made mandatory for a specified category of taxpayers. But the GST council is making continuous changes and amendments to the e-invoicing provisions. If we look at the current position, a huge number of individual taxpayers and companies fall under the ambit of e-invoicing.  

What is E-Invoicing?  

E-Invoicing or Electronic Invoicing is an electronic mechanism where B2B invoices are authenticated by GSTN. Under this system, a registered person generates an invoice on his accounting software and uploads it on the Invoice Registration Portal. Then IRP validates the invoice and issues an Invoice Reference Number and a QR code against that invoice on successful validation. After the issuance of IRN and QR code, all the information related to the invoices is transferred to the main GST portal and the e-way bill portal.  

Unlike e-way bills, invoices are not generated online in this e-invoicing system. Rather e-invoicing is an electronic mechanism to authenticate the already generated invoices by the registered persons.  

Applicability of E-Invoicing under GST  

GST E-Invoicing is applicable to the registered person whose aggregate turnover in any financial year, from 2017-18 to 2021-22, exceeds Rs. 10 crore.

To put it in simple words, say, the aggregate turnover of Mr. X is Rs 25 crore in the financial year 2018-19, while the turnover of other financial years, between 2017-18 and 2021-22 does not exceed Rs 20 crore. Now because the turnover of Mr. X in F.Y. 2018-19 exceeds Rs 20 crore, he is mandatorily required to generate e-invoices from 1st April 2022.  

Note: The aggregate turnover here means a turnover of all GSTINs registered under a single PAN.  

However, e-invoicing is not applicable to the following category of registered persons:  

  • A banking company or Financial Institution (including NBFC) or any insurer 

  • Goods transporting Agency  

  • Person supplying passenger transportation services 

  • Person supplying services of admission to the exhibition of cinematographic film on multiplex screens 

  • SEZ unit or developer 

  • Government department or any local authority  

Further, the e-invoicing system is applicable in the case of the following supplies:  

  • Supply to registered persons  

  • Supply to SEZ units or developers with or without payment of tax  

  • Export of goods or services with or without payment of tax and 

  • Deemed export  

Benefits of E-Invoicing under GST  

The e-invoicing system benefits the registered person in the following ways:  

  • Reducing mismatch errors during GST reconciliations 

  • Easy and fast availability of input tax credit  

  • Real-time tracking of all invoices issued by the suppliers 

  • Mitigation of fake GST invoicing  

  • Reduction in tax leakage and frauds  

  • One-time reporting of invoices on the portal, as the information gets auto-populated on the GST and e-way bill portals.  

  • Better automation of tax filing process 

Process of Generating E-Invoice under GST  

The step-by-step process to generate an e-invoice through the Invoice Registration Portal (IRP) is as follows:  

Step 1: Raising invoices by the supplier in his accounting software. All the necessary details like billing name and address, GSTIN of the supplier, transaction value, item rate, GST rate, tax amount, should be uploaded on the software.  

Step 2: After this, the accounting software will generate a JSON file that needs to be uploaded to the Invoice Registration Portal.  

Step 3: Upload the JSON file generated on the e-invoice portal. Then the IRP will validate and authenticate all the details of the invoice through the JSON file.  

Step 4: Once all the details are validated a unique Invoice Reference Number (IRN) will be generated, on the portal, against the invoice.  

Step 5: Once the IRN is generated, IRP digitally signs the invoice and creates a QR code in Output JSON for the supplier.  

Step 6: The supplier will get an intimation of e-invoice generation through the email provided in the invoice.  

Step 7: Then the details of the invoice will be forwarded from IRP to the GST portal and e-way bill portal. Once the details are uploaded on the GST portal, the supplier's GSTR 1 will also get auto-populated for the relevant tax period.  

Author : Simran

Date     : 29-Jun-2022

Frequently Asked Questions on E-Invoicing

The GST law doesn't specifically provide any time limit for the generation of e-invoices. However, it is to be noted that any invoice without an IRN would be deemed to be an invalid document and may lead to the blocking of input tax credit for the recipient. Hence the supplier should generate the e-invoice before making it available to the recipient.

An e-invoice can be canceled but not modified. If the registered person wants to cancel an already generated e-invoice, he can do so within a period of 24 hours of the generation of that invoice. After 24 hours the portal will not report the cancelation of the e-invoice. In that case, the registered person will have to manually cancel the e-invoice on the GST portal. Further, in case the registered person needs to modify any detail in the invoice, he will have to carry put the modifications on the GST Portal (while filing GSTR-1). However, these modifications will be flagged to proper officer for information.

The following documents need to be reported under e-invoicing: Invoice of supplier Credit note Debit note

No, e-invoicing is not applicable in the case of exempt supplies as a bill of supply is issued for exempt supplies and not an invoice.

Yes, with the help of bulk generation tools available in the e-invoice portal to record all the invoice data in a single sheet and upload all the invoices at once.