E-Invoice Under GST – Limit, procedure, Starting Date, benefits
e-invoice under GST: Businesses can now use GST e-invoices generated from the government’s GST portal to create digital invoices for their goods and services. The idea of electronically generating GST invoices has been considered as a way to reduce GST evasion. e-Invoice under GST is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal. Now, shouldn’t we know the procedure of E-Invoicing and its system?
In the E-Invoicing System, invoices have a Unique Identification Number, that may be issued by the Invoice Registration Portal (IRP). After the data is fed into the portal, it’ll reflect the invoice’s details in the GST portal and e-way bill portal in real-time automatically. Procedure is as follows-
1. PEPPOL standards must be followed if the reconfigured ERP system is used, moreover guidance and assistance can be taken from the software service provider to adhere to stick with standards for e-invoicing and the CBIC parameters.
2. Two ways are available for generating IRN:
- Whitelist computer’s IP address on the e-invoice portal, it’ll enable an immediate API integration. The same can be done with the assistance of GST Suvidha Provider.
- Or, Download the bulk tool to upload bulk invoices. It’ll create a JSON file via which e-invoice can be uploaded bulks in the portal to get bulk IRNs.
3. Now, upload regular invoices on the same software filling all the required details like the billing name and address, transaction value, supplier’s GSTN, item rate, applicable GST rate, tax amount, etc.
4. After opting from the ways available, invoices are often generated on the ERP software. Then upload the invoice details on the IRP either through the JSON file, an application service provider or via direct API and refill the mandatory fields. Then IRP will resemble the central recorder for e-invoicing in addition to its authentication. Not just that SMS and mobile app modes for IRP interaction are available too.
5. The IRP will verify the B2B invoice details, inspect replications, and can also issue an invoice reference number. Invoice series, document type (DN/CN/INV), seller’s GSTIN, the financial year in YYYY-YY format are the four parameters considered for an IRN generation.
6. After IRN generation, the IRP will sign the invoice digitally and a QR code are issued for the supplier. And supplier going to be informed via email about the same.
7. IRP will then transfer the authenticated payload for GST returns to the GST portal. And each detail will be directed to the e-way bill portal. The GSTR-1 then gets auto-populate for the concerned tax period and determines the liabilities.
Now a copy of the invoice can be printed. Note-E Invoicing system works with the invoices on IRP, if available in an electronic format.
Is E-Invoicing applicable to all? If not to whom is it applicable?
E-Invoice limit under GST
E-Invoicing isn’t something which is implemented in 2022, it rolled out from 1st October 2020 for taxpayers having an aggregate turnover exceeding Rs.500 crore vide Notification No 61/2020-Central Tax and 71/2020-Central Tax. Though at the moment it covered businesses having an aggregated turnover exceeding Rs.100 crore from 1st January 2021 vide Notification No. 88/2020.
Further Notification No. 5/2021 the CBIC notified that from 1st April 2021, businesses with a turnover of more than Rs.50 crore will be covered under it. However, as per the latest Notification No. 1/2022, CBIC notified on 24th February 2022 to bring businesses having annual turnover ranging between Rs.20 crore and Rs.50 crore under this umbrella too. The taxpayers need to comply with e-invoicing if the turnover exceeds the threshold limit in any financial year from 2017-18 to 2021-22. Applicability is summarized in the table-
|Notification||Aggregate Turnover||Effective Date|
|61/2020 – Central Tax||500 crores||01st October 2020|
|88/2020 – Central Tax||100 crores||01st January 2021|
|05/2021 – Central Tax||50 crores||01st April 2021|
|01/2022 – Central Tax||20 crores||01st April 2022|
Note-Here the aggregate turnover means turnover of all GSTINs under a single PAN across India. Now is there any exception?
Non-Applicability of E-invoice
In certain cases, irrespective of the turnover e-Invoicing will be not applicable for those belonging to the following categories as per CBIC Notification No.13/2020 – Central Tax:
- Banking and Insurance company or a company or a financial institution, including an NBFC
- A Goods Transport Agency
- Registered person supplying passenger transportation services
- Registered supplying services by way of admission to the exhibition of cinematographic films in multiplex services
- An SEZ unit
- E-invoice is not required for B2C sales, however, a seller is required to display a dynamic QR code on B2C invoices
- E-invoice not required for making only exempt Supplies as only a bill of supply is issued and not a tax invoice.
- A government department and Local authority
Documents reported into IRP
Following documents will be required by the system –
- Invoices by the supplier
- Credit notes and Debit notes by the supplier
- Any other document notified by law to be reported as an e-invoice by the creator of the document
Benefits of E-Invoicing in businesses
Businesses are gonna benefitted by using e-invoice under GST, following are some of the examples:
- It acts as a bridge for filling a major gap in data reconciliation under GST to reduce mismatch errors.
- Here one software can be read by another, allowing interoperability and aids in minimizing data entry errors.
- Real-time tracking of supplier invoices is enabled.
- Backward integration with automation of the return filing process like the relevant details of the invoices would be auto-populated in the various returns, especially for generating the part-A of e-way bills.
- Increase in the pace of availability of genuine input tax credit.
- The Lesser possibility of audits/surveys by the tax authorities since the information they require is available.
Wait now after checking out the process, benefits and related topics, many of us might wonder if can E-Invoice under GST be cancelled?
Can an E-Invoice be cancelled?
Yes, it can be cancelled. But it can’t be cancelled partially. When cancelled, it has to be reported to the IRN within 24 hours. If failed to be within the prescribed time, then it cannot be done on the IRN, but it can be done manually on the GST portal before the returns are filed.
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