GST E-INVOICING CONCEPT AND PROCEDURE

E-INVOICING: INTRODUCTION AND NEED TOWARDS E-GOVERNANCE & TRANPERANCY FOR EASE OF DOING BUSINESS

Since the inception of GST, cases of fake invoicing and tax evasions are reportedly increased year on year. As per the records, there has been sharp increase in cases of fake invoicing where thousands of Crore fraudulent claim of ITC unearthed.

In order to control fake invoicing, tax evasion and to promote the tax payer services (pre-population of ANX-1 & II and reducing reconciliation problems) in better way, a much needed E-Invoicing finally going to be implemented in the phased manner over the period of time.

This blog discusses about the concept of E-Invoicing under following heading.

Contents

1. What is E-Invoicing under GST?

2. Are all taxpayers required to generate E-Invoice under GST?

3. What is the procedure for generating an E-Invoice under GST?

4. Is E-Invoicing applicable for all types of transactions?

5. What is Invoice Reference Number (IRN)?

6. What is Quick Response code (IRN)?

7. What if e-invoice is not prepared by the taxpayer to whom E-Invoicing is applicable?

8. Is there any requirement to issue e-invoice in triplicate and duplicate?

9. What are the timings of issuing an E-invoice?

1. WHAT IS E-INVOICING UNDER GST?

E-invoicing is a mechanism which has been developed with the objective to authenticate the B2B transactions automatically by GSTN for further use on common GST portal. It doesn’t mean the generation of invoice by any computer system or tax portal. E-invoicing standards approved by GST council in its 37th meeting held on Sept,2019 Generation of E-Invoice will be the responsibility of taxpayers.

2. ARE ALL TAXPAYERS REQUIRED TO GENERATE E-INVOICE UNDER GST ?

  • No, E-invoice is to be prepared by following class of persons-
Aggregate Turnover of Supplier in a F.Y. Applicability status Date of applicability
>500 crores Voluntary 1st January ,2020
>100 crores Voluntary 1st February,2020
>100 crores Mandatory 1st April,2020
>500 crores (for B2C transactions) (note) Mandatory 1st April,2020

Note- QR code is required to be generated for B2C transactions by those taxpayers.

3. WHAT IS THE PROCEDURE FOR GENERATING AN E-INVOICE UNDER GST?

    Following step to be followed in sequence to generate E Invoice–

  1. Generation of invoice by taxpayer in its accounting or billing software
  2. Creation of JSON file of the same to upload it on Invoice Registration Portal (IRP)
  3. Generation of Invoice Reference Number (IRN) by the supplier (Optional Step)
  4. Uploading the JSON file & IRN(if generated) of the invoice to IRP
  5. Generation of IRN by IRP(if not generated by the supplier) and its validation by IRP by digitally signing and attaching QR code after performing duplication checks
  6. Once the invoice (JSON) is digitally signed by IRP & QR code is attached to it, it becomes an E- invoice and same will be sent to supplier & recipient by IRP on mail
  7. The so called E-invoice can now be downloaded by both supplier and recipient
  8. IRP transfer the details of E-invoice to invoice registry of GST and E-way Bill system

4. IS E-INVOICING APPLICABLE FOR ALL TYPES OF TRANSACTIONS?

  • At present, E-invoicing is applicable for B2B, Exports & SEZ sales related to tax invoices, Dr/Cr notes, and RCM invoices except proforma invoices.

5. WHAT IS INVOICE REFERENCE NUMBER (IRN)?

  • A unique number based on hash (logarithm of Supplier GSTIN, Invoice No., Type & FY)
  • Generated by IRP ,can also be generated by supplier but valid only once registered on portal
  • A Unique identity for each invoice for entire FY for a taxpayer
  • It is not an invoice number (invoice no. remain same as mentioned on the invoice)

6. WHAT IS QUICK RESPONSE CODE (IRN)?

  • A code generated by IRP after validation of invoice (digital signing of invoice by IRP).
  • Consist of following E-invoice parameters-
    • GSTIN of Supplier& Recipient
    • Invoice Number, date and value (taxable & gross value)
    • No of line items, HSN code of main item ( highest taxable value), Unique IRN
  • Checking invoice by tax officer on roadside by offline app if internet not available.

7. WHAT IS THE PROVISION IF E-INVOICE IS NOT PREPARED BY THE TAXPAYER TO WHOM E-INVOICING IS APPLICABLE?

  • If the E Invoice is mandatory not generated as per procedure than such Invoice shall not be treated as invoice under CGST Act.

8. IS THERE ANY REQUIREMENT TO ISSUE E-INVOICE IN TRIPLICATE AND DUPLICATE ?

  • No, taxpayers who are required to prepare e-invoice are not required to do so.

9. WHAT ARE THE TIMINGS OF ISSUING AN E-INVOICE?

  • Invoice shall be issued as per invoicing provisions laid in section-31 of CGST Act,2017-
    • For Goods-On or before removal of goods
    • For Services-before or after provisioning of service but within 30/45 days

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Anurag Jain

CA in Mumbai

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