Transport of goods from one place to another is facilitated by filing “E-Way Bills” on the common GST portal. Similarly, at its 35th meeting, the GST Council decided to implement, the GST Council decided to implement an e-invoicing system that would apply to specific categories of persons.
E-Invoicing is not the generation of invoices on the GST platform. It’s a theory, guy. E-Invoicing is the submission on the portal of a standard invoice that has already been generated. Therefore, multi-purpose reporting is automated with one-time invoice information input.
Update as on 30th July 2020
Update as on March-14th-2020
As on December-13th-2019
CBIC has informed the class of taxpayers who are expected to produce an IRP e-invoice. Those taxpayers with a gross turnover of more than Rs. 500 crores (Previously planned for more than Rs. 100 Crores) will produce e-invoice as of April-1st-2020. The fields included in the e-invoice have also been advised in the CGST rules.
As on October-10th-2019
The e-invoicing design and process have been approved by the GST Council. The finalized version of the e-invoicing prototype was released by GSTN as an announcement on the web.
As on September-20th-2019
As per the decision taken at the 37 th GST Council meeting the new system for the return of GST for all taxpayers and for all forms will be implemented from April 2020.
In August 2019
The draft e-invoice prototype for industry input was released by GSTN by August-20th-2019, known as the e-invoice scheme.
What is E-Invoicing?
“E-Invoicing” or “Electronic Invoicing” is a method in which B2B invoices are electronically authenticated by GSTN for further use on the popular GST portal.
Under the proposed electronic invoicing system, an identification number will be issued against each invoice by the Invoice Registration Portal (IRP).
This would also remove the need for manual data entry while filing ANX-1 / GST Returns as well as the generation of Part-A e-way bills, as the information is forwarded directly to the GST portal via the IRP.
Which is the new mechanism in place to issue invoices?
Businesses are currently producing invoices from different applications and the details of these invoices are submitted manually in the GSTR-1 return.
Under the new return method, the GST ANX-1 annex will mainly take the place of the GST-1 return. Nevertheless, the method of creating and publishing invoice information remains the same. The main tool to allow this would be e-invoicing.
Why is electronic billing going to help businesses?
Businesses can benefit from the following by the use of an e-invoice facilitated by GSTN:
- E-Invoice addresses and fills a big gap in GST data reconciliation to reduce mismatch errors.
- Faster availability of valid production tax credits.
- Less potential audits/surveys by tax authorities as the information they need is accessible at the transaction stage.
What is the GSTN e-invoicing initiative?
GSTN published the draft version of the e-invoice format in an excel template and made it available for public input about August-20th-2019. GSTN along with ICAI has drawn up a framework to comply with the GST and other Indian tax laws. Apart from these, the software complies with international and different industry requirements. The e-invoice software is robust and offers a common interface for various sectors and companies.
Any existing accounting or invoicing software / application provider (SAP / Tally / Busy) must comply with the PEPPOL standard for invoice generation. Taxpayes will therefore be in a position to generate a compliant invoice at the source. GSTN referred to the PEPPOL (PAN European Public Procurement Online) standard, which operates on the Universal Business Language (UBL) version of electronic XML.
The program allows diversified business applications and trading communities to share information along their supply chains using a specific or standard format. This requires a single point of entry of data into online commerce for companies. The data then flows across various portals with the aid of the IRP.
The E-invoice of the GSTN will include the following parts:
- E-invoice scheme: Consists of a specific field name, a description of field, whether compulsory or not, and has number of sample values along with explanatory notes.
- Masters: Masters must determine the input set for certain fields that are predefined by GSTN itself. It includes fields such as UQC, State Code, type of invoice, type of supply etc.
- E-invoice template: The template is as per the GST rules and allows the reader to correlate the terms used in other sheets.
When will the E-invoicing be implemented?
Taxpayers with an annual aggregate turnover of more than Rs. 500 Crore can voluntarily generate e-invoices from January-7th-2020 via APIs. Whereas taxpayers with a turnover of more than Rs. 100 but less than Rs. 500 Crore may join them from Feb-1st-2020.
Electronic invoices were to be made compulsory from April-1st-2020 but were postponed to October-1st-2020 for taxpayers with a turnover of more than Rs. 500 Crore. The aggregate turnover will include the turnover of all GSTIN under one Plate, across India.
What’s the method of obtaining an e-billing?
The following are the stages involved in generating or raising an e-billing.
- It must collaborate with the software service provider to implement the standard set for e-invoicing, i.e. the e-invoice schema (standards) and must include at least the necessary parameters. It should be able to create a JSON file for several invoices together. Those taxpayers who do not have any software will be provided with an offline utility. At a feature date when e-invoicing applies to small taxpayers, they can choose from 8 different accounting and billing software packages all linked to the GSTN. It’s available free of charge.
- The taxpayer will then make a standard invoice for the program. It must include all relevant information such as the name and address of the invoice, supplier’s GSTN, transaction value, item cost, applicable GST cost, tax amount etc.
- Use only the JSON file to upload invoice details, especially mandatory fields, to the IRP. The IRP will act as the central e-invoicing and authentication registrar. There are several IRP-based modes of interaction, such as web-based, API-based, SMS-based, mobile app-based, offline-based and GSP-based.
- IRP validates the key information of the B2B invoice, searches for any overlap and produces the invoice reference number (hash) for reference. There are four parameters: GSTIN seller, Invoice Number and FY in YYYY-YY) and document form (INV / DN / CN).
- RP produces an invoice reference number (IRN), digitally signs an invoice and creates a QR code for the supplier in Output JSON.
The e-invoicing program only allows all taxpayers to record IRP invoices in electronic format.
How is E-invoicing going to curtail tax evasion?
It would help to curb tax evasion in the following ways:
- Tax authorities will have access to transactions as they take place in real time, as the e-invoice will have to be compulsively generated through the GST portal.
- Since input credit can be matched to output tax data, it is easier for GSTN to track false tax credit claims.
What are the mandatory fields for an e-invoice?
In particular, the E-invoice must comply with the GST invoicing rules. In addition, the invoicing method or policies adopted by growing industry or sector in India should also be taken into account.
Most fields are also optional, so users can choose to fill in the appropriate fields only. A definition for each field, along with sample inputs, has also been provided for interested users.
Below is a list of the contents of the new e-invoice format as notified on July-30th-2020:
- 12 Sections (mandatory + optional) and 6 annexes comprising a total of 140 areas.
- Out of the 12 Parts, 5 are Mandatory and 7 are Optional. Two annexes are mandatory.
- The 5 Required Sections are Essential Documents, Supplier Data, Recipient Data, Invoice item Description, Total Report. The two mandatory annexes are the descriptions of the products and the overall text.
Details of E-Invoicing through Videos
Frequently Asked E-invoice Questions
Ques:- What would be subject to e-invoicing?
Ans:- The e-invoicing program shall apply to registered GST persons whose aggregate turnover in the financial year exceeds Rs. 500 Crore. Nonetheless, exceptions include Special Economic Zones (SEZ) systems, insurance, banking, financial, institutions, NBFCs, GTA, Passenger transport services and the selling of film tickets.
Ques:- Will an e-invoice be canceled in part/full?
Ans:- The e-Invoice can not be canceled in part but can be canceled in full.
Ques:- Will the bulk-uploading of invoices for IRN generation be possible?
Ans:- No, invoice need to be inserted into the IRP one at a time.
Ques:- Is there going to be an e-invoice generation facility on the popular GST portal?
Ans:- No, invoices will continue to be created on the individual ERP Software currently used by the businesses. The invoice must adhere to the standard e-invoicing format and must contain the required criteria.
Ques:- Which are the types of documents to be submitted to the IRP?
Ans:- The records to be covered under e-Invoicing are as follows:-
- Supplier’s Invoices
- Supplier Credit notes
- The Recipient’s Debit notes
Conclusion on What is GST e-invoicing
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