E-INVOICE UNDER GST

E-Invoice under GST

What is Invoice:

An invoice is a commercial instrument issued by a seller to a buyer. It identifies both the trading parties and lists, describes, and quantifies the items sold, shows the date of shipment and mode of transport, prices and discounts, if any, and delivery and payment terms. In certain cases, (especially when it is signed by the seller or seller’s agent), an invoice serves as a demand for payment and becomes a document of title when paid in full. Types of invoice include commercial invoice, consular invoice, customs invoice, and proforma invoice. It is also called a bill of sale or contract of sale.

What is e-Invoice under GST:

E-Invoice is nothing but an electronic invoice issued by all the Registered Persons whose aggregate turnover during the previous year was more than Rs. 100 Cores (ie. Notification No. 88/2020 – Central Tax dated 10th November 2020).

As per Rule 48(4) of CGST Rules, notified class of registered persons (ie. Registered Persons whose aggregate turnover during the financial year was more than Rs. 100 crores except exempted) have to prepare invoice by uploading specified particulars of invoice (in FORM GST INV-01) on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN).

The process of issuance of Invoice Reference Number (IRN) with QR code after uploading all the particulars of invoice in Form GST INV-01 is called as e-Invoice under GST. Note that generation of E-Invoice doesn’t mean generation of invoice by a Government portal. It can be generated by using any software.

Registered persons can create their GST invoices on their own Accounting/Billing/ERP Systems and report to 'Invoice Registration Portal (IRP)’. On reporting, IRP returns the e-invoice with a unique ‘Invoice Reference Number (IRN)’ after digitally signing the e-invoice and adding a QR Code. Then, the invoice can be issued to the receiver (along with QR Code).

Supplies to registered persons (B2B), Supplies to SEZs (with/without payment), Exports (with/without payment), Deemed Exports, by notified class of taxpayers are currently covered under e-invoicing.

The basic aim behind adoption of e-invoice system by tax departments is ability to pre-populate the return and to reduce the reconciliation problems. The e-invoice system will help to curb the actions of unscrupulous taxpayers and reduce the number of fraud cases as the tax authorities will have access to data in real-time.

E-invoicing aims to make invoice reporting an integral part of a business process and remove the tedious task of invoice-compilation at the end of a return period. The e-Invoicing will help in curbing Goods and Services Tax (GST) evasion through issue of fake invoices and make the returns filing process simpler for businesses as invoice data be captured by a centralised portal.

Who have to issue an e-Invoice under GST:

All the Registered Persons except exempted persons, whose aggregate turnover during the previous year was more than Rs. 100 Cores (ie. Notification No. 88/2020 – Central Tax dated 10th November 2020) shall issue e-Invoice under GST.

Who are exempted to issue an e-Invoice under GST:

The following persons are exempted to issue an e-Invoice under GST:

  • Insurers;

  • Banking companies or financial institutions, including a non-banking financial company (NBFC);

  • Goods Transport Agency (GTA) supplying services in relation to transportation of goods by road in a goods carriage;

  • Suppliers of passenger transportation service;

  • Suppliers of services by way of admission to exhibition of cinematograph films in multiplex screens and

  • Persons registered in terms of Rule 14 of CGST Rules (OIDAR).

Benefits of e-Invoice:

The following benefits are available to the Tax Payers:

  • Time Saving: Both the supplier and receipent will save the time in e-invoicing;

  • Cost Reduction: With paperless invoicing, you do not have to pay for paper or for postal fees. Further, by saving time with e-invoicing instead of using templates and emailing PDFs, you save working time. Concentrate on other value-adding tasks instead;

  • Error Free Returns: Due to increased automation, the mistakes or errors will be reduced;

  • Better Customer Service: It is more convenient for customer to get an e-invoice to their desired platform receiving an e-invoice instead of a paper invoice saves up to 90% on processing costs;

  • Easy track of Invoices: Using e-invoicing, we can track the invoice sent, viewed, paid or received details and

  • Hight Control: If you use online invoicing software, everything is saved on one platform which is accessible from anywhere on any device.

Step by Step e-Invoice Generation Process:

Herein below is the step by step process to get registered under GST:

  • 1

    Generation of JSON File:

    Through Own Software - 30 Minutes Job

    The tax payer has to generate the invoice in his/her GST Software as per the e-invoice standards and create a JSON File for uploading with Invoice Registration Portal.

  • 2

    Uploading JSON file with IRP:

    Through IRP - 10 Minutes Job

    Once the JSON file is generated, you can upload the same using API into Invoice Registration Portal for generating Invoice Reference Number along with QR Code.

  • 3

    Generation of IRP and QR Code:

    Through IRP - 10 Minutes Job

    Once the JSON file is uploaded, the Invoice Registration Portal will verify the JSON file and generates the digitally signed 64 digit Invoice Reference Number along with QR Code if the file is correct in al respects. You can find herein below the specimen digitally signed e-Invoice containing 64 digit Invoice Reference Number and QR Code.

  • 4

    Generation of E-Way Bill:

    Through IRP - 10 Minutes Job

    Apart from generation of 64 digit Invoice Reference Number and QR Code, the Invoice Reporting Portal will share the invoice to E-Way bill poratl for online generation of E-Way Bill. The Tax Payer can generate the E-Way Bill and can save in time.

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