What is E-Invoicing?
E-Invoicing means recording a transaction on the Government's website in an online system. After this, a special number called the Invoice Registration Number (IRN) is given for each invoice. This number must be written on the invoice issued by the taxpayer.
What are the Advantages of E-Invoicing?
Advantages of E-Invoicing are listed below:
|
S. No. |
Particulars |
Simple Explanation |
|
1 |
Automation of documentation process |
E-invoicing reduces paperwork as everything is done digitally, making the process faster and easier. |
|
2 |
Better focus on economic activities |
Businesses save time on regular tax work and can focus more on running and growing their business. |
|
3 |
No Duplication of data |
You don’t have to enter the same information again and again on different platforms. Once you upload details for e-invoicing, the same data is used for GST, E-way bills, etc. |
|
4 |
Digitalization of supply chain |
E-invoicing helps in making the entire supply chain digital, which later helps the government make better rules and policies. |
|
5 |
Better tax administration |
E-invoicing makes it easier for the government to manage taxes and reduces chances of tax cheating. |
|
6 |
Invoice level matching |
It helps match the tax you paid and the tax you collected at the invoice level, reducing errors. |
|
7 |
Complete trail of B2B invoices |
The government can track all business-to-business invoices properly, leaving no room for confusion or fraud. |
|
8 |
Auto-population of Data |
E-invoice data is auto-populated in Form GSTR 1/2A/2B/4A/6A which helps in faster return filings. |
To whom E-Invoicing is applicable?
Every registered person whose aggregate turnover (Total Sales) in any preceding financial year from exceeds Rs. 5 crores would be required to comply with the e-invoicing provisions.
Who are Exempt from compliance of E-Invoicing?
The following classes of registered persons are exempt:
1. Insurance companies
2. Banking Companies
3. Financial Institution including an NBFC
4. Goods Transport Agency (GTA)
5. Passenger Transportation Service provider (Bus)
6. Supplier supplying services by way of admission to exhibition of cinematograph films in multiplex screens (Movie Tickets)
7. Special Economic Zone (SEZ) unit
8. A government department and a local authority
Do E-invoice required in case of B2C Transactions?
No. E-invoice is required only when goods or services are supplied to a registered persons. There is no need to generate an e-invoice for sales made to unregistered persons.
For B2C sales (sales to unregistered persons), the rule is different. In such cases, certain registered businesses must print a QR code on the tax invoice.
Do E-Invoice applicable in case of Reverse Charge?
If a notified person (whose turnover is above the limit) issues an invoice for a supply where reverse charge applies, then they must follow the e-invoicing rules.
But if the same notified person receives goods or services from an unregistered person under section 9(4), then e-invoicing rules do not apply.
What are the documents required for E-invoicing?
Under GST law, registered businesses need to issue different documents for different situations. For example, a tax invoice must be issued when selling taxable goods or services. A delivery challan is issued when goods are moved but it is not considered a sale. A receipt voucher is issued when advance payment is received.
Can we amend (Modify / Cancel) E-Invoice?
Changes to an e-invoice cannot be made on the Invoice Registration Portal (IRP). Any corrections to the e-invoice must be done on the GST portal only. However, if needed, the e-invoice can be cancelled on the IRP within a limited time. Once cancelled, the cancellation details are sent to the GST system, and the cancelled invoice is removed from Form GSTR-1.
What is the Impact of E-Invoice on E-way Bill?
The E-way bill system is linked with the e-invoicing system. It is up to the taxpayer whether they want to generate the E-way bill at the same time as the e-invoice. If the details of both Part A and Part B of the E-way bill are provided while reporting the invoice to the Invoice Registration Portal (IRP), the E-way bill will be generated automatically. If only Part A is given and Part B details are missing, the taxpayer will have to fill in the remaining details later through the E-way bill section on the IRP or the E-way bill portal to generate the E-way bill.
How to verify authenticity of E-Invoice?
You can check if an e-invoice is genuine by uploading the signed JSON file or the signed QR code on the e-invoice portal. Another simple way is to scan the QR code printed on the invoice.
What is the Time limit for registering E-invoice?
There is no time limit mentioned in the law for generating e-invoices. But GSTN has given guidelines for this.
From 1st November 2023, businesses with annual turnover above Rs. 100 crores cannot report invoices that are older than 30 days from the invoice date. This rule applies to invoices, credit notes, and debit notes.
From 1st April 2025, this same 30-day rule will apply to businesses with turnover of Rs. 10 crores or more.
For example, if the invoice date is 1st April 2025, it cannot be reported after 30th April 2025. The portal will not allow reporting of such invoices after the 30-day period.
Do we Need to carry physical copy of invoice for movement of goods?
As per GST law, if an e-invoice with an IRN (Invoice Reference Number) is available, it can be shown electronically to the officer for checking. In such cases, there is no need to carry a physical copy of the invoice while transporting goods. The government has also clarified that showing the QR code with the IRN on a mobile or other electronic device is enough for verification.
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