The concept of e-invoicing under GST was introduced through the 39th GST Council Meeting. Further, the reason behind the introduction of GST e-invoicing was to ensure the inter-operability of e-invoices around the whole GST system.
What is e-invoicing under GST?
E-invoice, as the name suggests is an electronic invoice in which there is electronic uploading of all the B2B invoices. Thereafter, there is authentication of these invoices on the GST portal. Consequently, on authentication, there is a generation of a unique Invoice Reference Number (IRN) for each invoice. In addition to this IRN, each invoice is digitally signed and added with a QR Code. This process as a whole is e-invoicing under GST registration.
Also Read: GST Invoices Bill Easily Explained Guide By Expert
Benefits of e-invoicing
The main object as well as aim behind the insertion of e-invoicing under the GST system is to pre-populate the returns and thereby, reduce the chances of errors. Accordingly, the benefits of e-invoicing under Goods and services tax in India are as follows:
Saves time by uploading the invoice only once: E-invoicing under GST reduces the reporting of same invoice information multiple times in numerous forms. This is so because the e-invoicing requires only a single upload, and everything get pre-populated, as required.
Auto population of details in GSTR-1: There is auto population of B2B details in GSTR-1 on uploading of e-invoices.
Real time tracking: E-invoicing under GST ensures real time tracking of invoice which allows faster availability of Input Tax Credit to the buyers.
Reduction of frauds: E-invoice ensures reduction of frauds as well as reduction in issuance of fake invoices.
Reconciliation of the data: With the help of e-invoice, a buyer can promptly accept or reject information under a new return by performing a reconciliation with his purchase register.
Is e-invoicing mandatory under GST?
Under the GST system, e-invoicing is mandatory as per the turnover of the GST registered person. Accordingly, the applicability of mandatorily issuing GST e-invoice has come into effect for different turnovers in a phased manner. This is as follows:
| Phase | Applicable to taxpayer having an aggregate turnover of more than | Applicable date |
|---|---|---|
| I | Rs. 500 crores | 01.10.2020 |
| II | Rs. 100 crores | 01.10.2020 |
| III | Rs. 50 crores | 01.04.2021 |
| IV | Rs. 20 crores | 01.04.2022 |
| V | Rs. 10 crores | 01.10.2022 |
| VI | Rs. 5 crores | 01.08.2023 |
Accordingly, from the above table, we can infer that the e-invoice for B2B transactions under GST began with a very high threshold limit of turnover of Rs. 500 crores and more. And, now in the latest phase, this turnover limit has been reduced to Rs. 5 crores (to be applicable from 1st August, 2023) turnover in a financial year.
Note:
-The latest phase of the turnover limit of Rs. 10 crores is applicable through Notification No. 10/2023–Central Tax dated May 10, 2023.
Who does not have to obtain GST e-invoice?
Following persons are exempt from issuing e-invoices even if their turnover exceeds the threshold limit:
– Special Economic Zone units (Not SEZ Developers) Insurer or banking company or financial institution including NBFC.
– Supplies of passenger transportation service.
– GTA supplying services in respect of transportation of goods by road in a goods carriage.
– Person supplying services by way of admission to exhibition of cinematograph films in multiplex screens
Who has to upload the GST e-invoice?
As per the concept of goods and services tax (GST) e-invoice, it is the seller who has to upload the invoice to the IRP system. Thereafter, he has to capture the IRN and QR Code in the physical copy of the invoice to the recipient.
Types of documents covered under GST e-invoice
The types of documents covered under the GST e-invoice are as follows:
– Invoice by the supplier
– Credit note by the supplier
– Debit note by the supplier
– Any other documents
Can you make changes in GST e-invoice?
You cannot make changes in the GST e-invoice. If there are any mistakes or errors in the e-invoice, then the only option available is to cancel the e-invoice and upload a new e-invoice (with a new number) and accordingly, generate a fresh IRN.
Can there be cancellation of e-invoice be partially/fully?
There cannot be cancellation of e-invoice partially. If there is any need of cancellation, then it must be done fully. Further, on cancellation of e-invoice, there must be reporting of the same to IRN within 24 hours of the cancellation. After 24 hours, you will not be able to utilise the IRN to cancel an e-invoice and there will be a need of manual cancellation on the GST Portal. Moreover, the cancellation can be only prior to the filing of returns.
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