GST E-Invoicing

GST E-Invoicing

e-invoicing under GST – What is e-Invoicing? Applicability & Implementation Date

e-Invoicing under GST denotes electronic invoicing defined by the GST law. Just like how a GST-registered business uses an e-way bill while transporting goods from one place to another. Similarly, certain notified GST-registered businesses must generate e invoice for Business-to-Business (B2B) transactions.
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What is e-invoicing under GST?

‘e-Invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices and a few other documents are authenticated electronically by GSTN for further use on the common GST portal.
In its 35th meeting, the GST Council decided to implement a system of e-Invoicing, covering specific categories of persons, mostly large enterprises. Later on, it has been expanded to cover mid-sized businesses and small businesses as well.
e-Invoicing does not imply the generation of invoices on the GST portal but it means submitting an already generated standard invoice on a common e invoice portal. Thus, it automates multi-purpose reporting with a one-time input of invoice details. The CBIC notified a set of common portals to prepare e invoice via Notification No.69/2019 – Central Tax.
Under the electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP), managed by the GST Network (GSTN). The National Informatics Centre launched the first IRP at einvoice1.gst.gov.in.
All invoice information gets transferred from this portal to both the GST portal and the e-way bill portal in real-time. Therefore, it eliminates the need for manual data entry while filing GSTR-1 returns and generation of part-A of the e-way bills, as the information is passed directly by the IRP to the GST portal.

Who must generate e invoice and its Applicability?

The e invoice applicability can be explained as follows-

Turnover criteria or e Invoice limit
Phase Applicable to taxpayers having an aggregate turnover of more than Applicable date Notification number
I Rs 500 crore 01.10.2020 61/2020 – Central Tax and 70/2020 – Central Tax
II Rs 100 crore 01.01.2021 88/2020 – Central Tax
III Rs 50 crore 01.04.2021 5/2021 – Central Tax
IV Rs 20 crore 01.04.2022 1/2022 – Central Tax
V Rs 10 crore 01.10.2022 17/2022 – Central Tax
VI Rs 5 crore 01.08.2023 10/2023 - Central Tax
The taxpayers must comply with e-invoicing in FY 2022-23 and onwards if their e invoice limit or turnover exceeds the specified limit in any financial year from 2017-18 to 2021-22. Also, the aggregate turnover will include the turnover of all GSTINs under a single PAN across India.
If the turnover in the last FY was below the threshold limit but it increased beyond the threshold limit in the current year, then e-Invoicing would apply from the beginning of the next financial year i.e. FY 2023-24.
Transactions and documents criteria
The following transactions and documents listed below fall under e invoicing applicability –
Documents Transactions
Tax invoices, credit notes and debit notes under Section 34 of the CGST Act Taxable Business-to-Business sale of goods or services, Business-to-government sale of goods or services, exports, deemed exports, supplies to SEZ (with or without tax payment), stock transfers or supply of services to distinct persons, SEZ developers, and supplies under reverse charge covered by Section 9(3) of the CGST Act.

Who need not comply with e-Invoicing?

However, irrespective of the turnover, e-Invoicing shall not be applicable to the following categories of registered persons for now, as notified in CBIC Notification No.13/2020 – Central Tax, amended from time to time-
Notified Businesses Documents Transactions
  1. An insurer or a banking company or a financial institution, including an NBFC
  2. A Goods Transport Agency (GTA)
  3. A registered person supplying passenger transportation services
  4. A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services
  5. An SEZ unit (excluded via CBIC Notification No. 61/2020 – Central Tax)
  6. A government department and Local authority (excluded via CBIC Notification No. 23/2021 – Central Tax)
  7. Persons registered in terms of Rule 14 of CGST Rules (OIDAR)
Delivery challans, Bill of supply, financial or commercial credit note or debit note, bill of entry, and ISD invoices. Any Business-to-Consumers (B2C) sales, Nil-rated or non-taxable or exempt B2B sale of goods or services, nil-rated or non-taxable or exempt B2G sale of goods or services, imports, high sea sales and bonded warehouse sales, Free Trade & Warehousing Zones (FTWZ), and supplies under reverse charge covered by Section 9(4) of the CGST Act.

Systems before & after e-invoicing

Before e-invoicing could apply, businesses generated invoices through various software, and the details of these invoices were manually uploaded in the GSTR-1 return or using ERP.
Once the respective suppliers file the GSTR-1, the invoice information gets reflected in GSTR-2B for the recipients. On the other hand, the consignor or transporters had to generate e-way bills by again importing the invoices in Excel or JSON manually or via ERP.
Under the e-invoicing system, the process of generating and uploading invoice details will remain the same. It’s done by importing using the Excel tool/JSON or via API integration, either directly or through a GST Suvidha Provider (GSP). The data will seamlessly flow for GSTR-1 preparation and for the e-way bill generation too. The e-invoicing system will be the key tool to enable this.

Time limit to generate e-Invoice

Until 30th April 2023, there has been no time limit fixed by the GST systems or the GST law to generate e-invoices. From 1st May 2023* onwards, taxpayers with Annual Aggregate Turnover (AATO) equal to or more than INR 100 crore must generate e-invoices for tax invoices and credit-debit notes within 7 days of invoice date, failing which such invoices and CDNs will be considered non-compliant.
Further, there is no defined time limit or period within which e invoice must be generated for the rest of the applicable taxpayers. Therefore, such taxpayers are advised to create e invoice on or after the invoice/CDN date preferably a week before the filing of GSTR-1 returns since it takes T+3 days for details of e-invoices to get auto-populated into GSTR-1.
*However, on 6th May 2023, the department has deferred the time limit of 7 days to report the old e-invoices on the IRP portals by three months. Also, the department is yet to announce the new implementation date.

Process of getting an e invoice

The following are the stages involved in generating or raising an e-invoice.
The taxpayer has to ensure to use of the reconfigured ERP system as per PEPPOL standards. He could coordinate with the software service provider to incorporate the standard set for e-invoicing, i.e. e invoice schema (standards) and must have the mandatory parameters notified by the CBIC, at least.

Any taxpayer has got primarily two options for IRN generation:

The IP address of the computer system can be whitelisted on the e-invoice portal for a direct API integration or integration via GST Suvidha Provider (GSP) such as ClearTax.
Download the bulk generation tool to bulk upload invoices. It will generate a JSON file that can be uploaded to the e invoice portal to generate IRNs in bulk.
The taxpayer must thereafter raise a regular invoice on that software. He must give all the necessary details like billing name and address, GSTN of the supplier, transaction value, item rate, GST rate applicable, tax amount, etc.
Once either of the above options is chosen, raise the invoice on the respective ERP software or billing software. Thereafter, upload the details of the invoice, especially mandatory fields, onto the IRP using the JSON file or via an application service provider (app or through GSP) or through direct API. The IRP will act as the central registrar for e-invoicing and its authentication. There are several other modes of interacting with IRP, such as SMS-based and mobile app-based.
IRP will validate the key details of the B2B invoice, check for any duplications and generate an invoice reference number (hash) for reference. There are four parameters based on which IRN is generated: Seller GSTIN, invoice number, FY in YYYY-YY, and document type (INV/DN/CN).
IRP generates the invoice reference number (IRN), digitally signs the invoice and creates a QR code in Output JSON for the supplier. On the other hand, the seller of the supply will get intimated about the e invoice generation through email (if provided in the invoice).
IRP will send the authenticated payload to the GST portal for GST returns. Additionally, details will be forwarded to the e-way bill portal, if applicable. The GSTR-1 of the seller gets auto-filled for the relevant tax period. In turn, it determines the tax liability.
A taxpayer can continue to print his invoice as being done presently with a logo. The e-invoicing system only mandates all taxpayers to report invoices on IRP in electronic format.

Benefits of e-Invoicing to businesses

  • Businesses will have the following benefits by using e-invoice initiated by GSTN-
  • e-Invoice resolves and plugs a major gap in data reconciliation under GST to reduce mismatch errors.
  • e-Invoices created on one software can be read by another, allowing interoperability and helping reduce data entry errors.
  • Real-time tracking of invoices prepared by the supplier is enabled by e invoice.
  • Backward integration and automation of the GST return filing process – the relevant details of the invoices would be auto-populated in the various returns, especially for generating part-A of e-way bills.
  • Faster availability of genuine input tax credit.
  • Lesser possibility of audits/surveys by the tax authorities since the information they require is available at a transaction level.
  • Faster and easy access to formal credit routes such as invoice discounting or financing, especially for small businesses.
  • Improved customer relations and growth in prospects for small businesses to do business with large enterprises.

How can e-invoicing curb tax evasion?

It will help in curbing tax evasion in the following ways-

Tax authorities will have access to transactions as they take place in real-time since the e invoice will have to be compulsorily generated through the GST portal.
There will be less scope for manipulating invoices since the invoice gets generated before carrying out a transaction.
It will reduce the chances of fake GST invoices, and only genuine input tax credit can be claimed as all invoices need to be generated through the GST portal. Since the input credit can be matched with output tax details, it becomes easier for GSTN to track fake tax credit claims.

What are the mandatory fields of an e-invoice?

e-Invoice must primarily adhere to the GST invoicing rules. Apart from this, it should also accommodate the invoicing system or policies followed by each industry or sector in India. Certain information is made mandatory, whereas the rest of it is optional for businesses. Many fields are also made optional, and users can choose to fill up relevant fields only. It has also described every field along with the sample inputs for the interested users. One can see that certain required fields from the e-way bill format are included now in the e-invoice, such as the sub-supply type.

Below is the gist of the contents of the latest e-invoice format as notified on 30th July 2020 via Notification No.60/2020 – Central Tax:

12 sections (mandatory + optional) and six annexures consisting of a total of 138 fields.
Out of the 12 sections, five are mandatory, and seven are optional. Two annexures are mandatory.
The five mandatory sections are basic details, supplier information, recipient information, invoice item details, and document total. The two mandatory annexures are details of the items and the document total.

The following fields must be compulsorily be declared in an e-invoice:

Sl. no. Name of the field List of choices / specifications / sample Inputs Remarks
1 Document Type Code Enumerated List such as INV/CRN/DBN Type of document must be specified
2 Supplier_Legal Name String Max length: 100 Legal name of the supplier must be as per the PAN card
3 Supplier_GSTIN Max length: 15 Must be alphanumeric GSTIN of the supplier raising the e-invoice
4 Supplier_Address Max length: 100 Building/Flat no., Road/Street, Locality, etc. of the supplier raising the e-invoice
5 Supplier_Place Max length: 50 Supplier’s location such as city/town/village must be mentioned
6 Supplier_State_Code Enumerated list of states The state must be selected from the latest list given by GSTN
7 Supplier Pincode Six digit code The place (locality/district/state) of the supplier’s locality
8 Document Number Max length: 16 Sample can be “ Sa/1/2019” For unique identification of the invoice, a sequential number is required within the business context, time frame, operating systems and records of the supplier. No identification scheme is to be used.
9 Preceeding_Invoice_Reference and date Max length:16 Sample input is “ Sa/1/2019” and “16/11/2020” Detail of original invoice which is being amended by a subsequent document such as a debit and credit note. It is required to keep future expansion of e-versions of credit notes, debit notes and other documents required under GST.
10 Document Date String (DD/MM/YYYY) as per the technical field specification The date when the invoice was issued. However, the format under explanatory notes refers to ‘YYYY-MM-DD’. Further clarity will be required. Document period start and end date must also be specified if selected.
11 Recipient_ Legal Name Max length: 100 The name of the buyer as per the PAN
12 Recipient’s GSTIN Max length: 15 The GSTIN of the buyer to be declared here
13 Recipient’s Address Max length: 100 Building/flat no., road/street, locality, etc. of the supplier raising the e-invoice
14 Recipient’s State Code Enumerated list The place of supply state code to be selected here
15 Place_Of_Supply_State_ Code Enumerated list of states The state must be selected from the latest list given by GSTN
16 Pincode Six digit code The place (locality/district/state) of the buyer on whom the invoice is raised/ billed to must be declared here if any
17 Recipient Place Max length: 100 Recipient’s location (City/Town/Village)
18 IRN- Invoice Reference Number Max length: 64 Sample is ‘a5c12dca8 0e7433217…ba4013 750f2046f229’ At the time of the registration request, this field is left empty by the supplier. Later on, a unique number will be generated by GSTN after uploading the e-invoice on the GSTN portal. An acknowledgement will be sent back to the supplier after the successful acceptance of the e-invoice by the portal. IRN should then be displayed on the e-invoice before use.
19 ShippingTo_GSTIN Max length: 15 GSTIN of the buyer himself or the person to whom the particular item is being delivered to
20 Shipping To_State, Pincode and State code Max length: 100 for state, 6 digit pincode and enumerated list for code State pertaining to the place to which the goods and services invoiced were or are delivered
21 Dispatch From_ Name, Address, Place and Pincode Max length: 100 each and 6 digit for pincode Entity’s details (name, and city/town/village) from where goods are dispatched
22 Is_Service String (Length: 1) by selecting Y/N Whether or not supply of service must be mentioned
23 Supply Type Code Enumerated list of codes Sample values can be either of B2B/B2C/ SEZWP/S EZWOP/E XP WP/EXP WOP/DE XP Code will be used to identify types of supply such as business to business, business to consumer, supply to SEZ/exports with or without payment, and deemed export.
24 Item Description Max length: 300 The sample value is ‘Mobile’ The schema document refers to this as the ‘identification scheme identifier of the Item classification identifier’ Simply put, the relevant description is generally used for the item in the trade. However, more clarity is needed on how it needs to be described for every two or more items belonging to the same HSN code.
25 HSN Code Max length: 8 The applicable HSN code for particular goods/service must be entered
26 Item_Price Decimal (12,3) Sample value is ‘50’ The unit price, exclusive of GST, before subtracting item price discount, can not be negative
27 Assessable Value Decimal (13,2) Sample value is ‘5000’ The price of an item, exclusive of GST, after subtracting the item price discount. Hence, gross price (-) discount = net price item, if any cash discount is provided at the time of sale
28 GST Rate Decimal (3,2) Sample value is ‘5’ The GST rate represented as a percentage that is applicable to the item being invoiced
29 IGST Value, CGST Value and SGST Value Separately Decimal (11,2) Sample value is ‘650.00’ For each individual item, IGST, CGST and SGST amounts have to be specified
30 Total Invoice Value Decimal (11,2) The total amount of the Invoice with GST. Must be rounded to a maximum of 2 decimals

FAQs on e-invoicing

Currently, the e-invoicing system is already implemented for the GST registered persons whose aggregate turnover in any previous financial years (2017-18 to 2021-22) exceeds Rs.20 crore. From 1st August 2023, it shall apply to those with a turnover of more than Rs.5 crore up to Rs.10 crore. There are some exceptions as listed in the above section.

An e-invoice cannot be cancelled partially but can be cancelled wholly. On cancellation, it must be reported to the IRN within 24 hours. Any attempt to cancel thereafter cannot be done on the IRN and must be manually cancelled on the GST portal before the returns are filed.

No, invoices must be uploaded one at a time into the IRP. The ERP of a business will need to be designed to place the request for the upload of individual invoices.

No, invoices will continue to be generated on the individual ERP software currently in use by businesses. The invoice must adhere to the e-invoicing standard format and include the mandatory parameters. The direct generation of invoices on a common portal is not being planned at the moment.

Invoices by the supplier, credit notes and debit notes as per the GST law or any other document as notified under GST law are to be reported as an e-invoice.

Basics of e-invoicing

Electronic invoicing or e-Invoicing is a system of raising invoices, under which invoices generated by one software can be read by any other software, eliminating the need for any fresh data entry or errors. In simpler words, it is an invoice generated using a standardised format, where the electronic data of the invoice can be shared with others, thus ensuring the interoperability of data.

CGST Rule 48 lays down the rules for the applicability and generation of e-invoices.

Until 30th April 2023, there was no time limit fixed by the GST systems to generate e-invoices. From 1st May 2023 onwards*, taxpayers with AATO equal to or more than INR 100 crore must generate e-invoices for tax invoice and credit-debit notes within 7 days of invoice date, failing which the invoices/CDNs will be non-compliant. There is no defined time limit or period within which e invoice must be generated for the rest. Hence, for such taxpayers, it is advised to create e invoice on or after the invoice date but before the filing of GSTR-1 returns.

Until 30th April 2023, there was no time limit fixed by the GST systems to generate e-invoices. From 1st May 2023 onwards*, taxpayers with AATO equal to or more than INR 100 crore must generate e-invoices for tax invoice and credit-debit notes within 7 days of invoice date, failing which the invoices/CDNs will be non-compliant. There is no defined time limit or period within which e invoice must be generated for the rest. Hence, for such taxpayers, it is advised to create e invoice on or after the invoice date but before the filing of GSTR-1 returns.

*However, on 6th May 2023, the department has deferred the time limit of seven days to report the old e-invoices on the IRP portals by three months.

Yes, e-invoice is generated after the invoice date. Also, until 30th April 2023, there was no time limit fixed by the GST systems to generate e-invoices. From 1st May 2023 onwards*, taxpayers with AATO equal to or more than INR 100 crore must generate e-invoices for tax invoice and credit-debit notes within 7 days of invoice date, failing which the invoices/CDNs will be non-compliant.

*However, on 6th May 2023, the department has deferred the time limit of 7 days to report the old e-invoices on the IRP portals by three months.

No. Until 30th April 2023, there was no time limit fixed by the GST systems to generate e-invoices. From 1st May 2023* onwards, taxpayers with AATO equal to or more than INR 100 crore must generate e-invoices for tax invoice and credit-debit notes within 7 days of invoice date, failing which the invoices/CDNs will be non-compliant. There is no defined time limit or period within which e invoice must be generated for the rest. Hence, for such taxpayers, it is advised to create e invoice on or after the invoice date but before the filing of GSTR-1 returns.

*However, on 6th May 2023, the department has deferred the time limit of seven days to report the old e-invoices on the IRP portals by three months.

e-Invoicing is mandatory from 1st October 2020 for all businesses whose aggregate turnover has exceeded the Rs.500 crore limit in any of the previous financial years from 2017-18 to 2019-20. From 1st January 2021, e-invoicing became applicable to businesses exceeding the Rs.100 crore turnover limit in any of the financial years between 2017-18 to 2019-20.

Likewise, it was extended to businesses with a total turnover of more than Rs.50 crore from 1st April 2021. The government thereafter extended the e-invoicing applicability to businesses having more than Rs 20 crore turnover w.e.f 1st April 2022. Later, the system expanded to cover businesses with turnover over Rs.10 crore from 1st October 2022. Recently, the department extended the e-invoicing to businesses with a turnover of more than Rs.5 crore w.e.f 1st August 2023.

However, e-invoicing shall not be applicable to the following categories of registered persons, irrespective of the turnover, as notified in the CBIC Notification No.13/2020 – Central Tax-
An insurer or a banking company or a financial institution, including an NBFC
A Goods Transport Agency (GTA)
A registered person supplying passenger transportation services
A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services
An SEZ unit (excluded via CBIC Notification No. 61/2020 – Central Tax)
A government department and local authority (excluded via CBIC Notification No. 23/2021 – Central Tax)
Persons registered under the Rule 14 of CGST Rules (OIDAR)

Here are some of the e-Invoicing benefits-

  • One-time reporting of B2B invoices while generation, which reduces reporting in multiple formats.
  • Most of the data in form GSTR-1 can be kept ready for filing while using e-invoicing system.
  • E-way bills can also be generated easily using e-Invoice data.
  • There is minimal need for data reconciliation between the books and GST returns filed.
  • Real-time tracking of invoices prepared by a supplier can be enabled, along with the faster availability of input tax credit. It will also reduce input tax credit verification issues.
  • Better management and automation of the tax-filing process.
  • Reduction in the number of frauds as the tax authorities will also have access to data in real-time.
  • Elimination of fake GST invoices getting generated.

Yes, the e-invoice scheme applies to reverse charge mechanism (RCM) transactions under Section 9(3).

To calculate e-invoicing eligibility, the preceding year's turnover, beginning from FY 2017-18, should be considered. Hence, if a business' turnover exceeds the prescribed limit in a financial year, it would be required to generate e-invoices from the beginning of the next financial year. For example, if the threshold turnover was exceeded in FY 2022-23, then e-invoicing will be applicable from 1st April 2023.

No. e-Invoice applies only if the turnover of any previous financial year (from 2017-18 onwards) has crossed the threshold limit.

The aggregate turnover for e-invoicing eligibility is to be considered from FY 2017-18 onwards. However, GST was implemented only on 1st July 2017. Hence, for FY 2017-18, is the aggregate turnover to be computed from 1st April 2017 or 1st July 2017?
The aggregate turnover for e-invoicing is to be calculated as per the definition under Section 2(6) of the Central Goods and Services Tax (CGST) Act. For FY 2017-18, the aggregate turnover is to be computed from 1st July 2017 until 31st March 2018.

e-Invoicing currently applies to-

Supplies to registered persons (i.e., B2B supplies),
Supplies to SEZs developers (with/without payment of tax),
Exports (with/without payment of tax), and
Deemed exports,
that are made by the notified class of taxpayers. It does not cover Free Trade & Warehousing Zones (FTWZ), import transactions, input service distributors, high sea sales and bonded warehouse sales. The exemption is with respect to entity and not transaction.

No, e-invoicing is not applicable to nil-rated or wholly-exempt supplies as in these cases, only a bill of supply is issued and not a tax invoice.

Yes, e-invoicing by specifically notified persons is compulsory for the supply of goods or services or both to a registered person.

Yes, you must generate e-invoice for all types of export transactions which are B2B in nature.

No, only credit and debit notes that are issued under Section 34 of the CGST or SGST Acts need to be reported to the IRP.

There is no defined time limit to make a credit note or debit note against an e-invoice. However, it should be noted that from 1st May 2023* onwards, taxpayers with AATO of INR 100 crore and more must report tax invoices, and debit and credit notes to the IRP within 7 days of the document date, failing which the invoices/CDNs will be non-compliant.

*However, on 6th May 2023, the department has deferred the time limit of seven days to report the old e-invoices on the IRP portals by three months.

The invoice issued to the customer must contain the IRN number and the QR Code. Along with this, you may send the standard invoice too.