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GST e-invoicing mandatory from January 1, 2021, if turnover exceeds Rs 100 cr

GST e-invoicing mandatory from January 1, 2021, if turnover exceeds Rs 100 cr

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The Central Board of Indirect Taxes and Customs (CBIC) on Tuesday notified that GST e-invoicing will be mandatory for any firm whose turnover exceeds Rs 100 crore from January 1, 2021. The limit set earlier was a turnover of Rs 500 crore.

“In exercise of the powers conferred by sub-rule (4) of rule 48 of the Central Goods and Services Tax Rules, 2017, the Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 13/2020 – Central Tax, dated the 21st March, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 196(E), dated 21st March, 2020, namely:-

In the said notification, in the first paragraph, with effect from the 1st day of January, 2021, for the words ‘five hundred crore rupees’, the words ‘one hundred crore rupees’ shall be substituted,” said the notification.

The changes will bring a large number of medium enterprises under the ambit of e-invoicing. It is expected that it will be made available to all taxpayers for B2B transactions from 1st April 2021.

“Inclusion of dealers with turnover between INR 100-500 Cr, within the E-invoicing gamut, is another step towards formalisation of the economy. There could be some initial hiccups in implementation, albeit, in the long run the same is likely to result in more transparency, better tax administration and automation of tax compliance and filings,” said Harpreet Singh, Partner, Indírect taxes, KPMG India.

The electronic invoicing system for business to business transactions was implemented on a mandatory basis for companies with turnover above Rs 500 crore from October 1.

Source: Economic-Times.

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GST e-invoice system: 495 lakh e-invoices generated on NIC portal

GST e-invoice system: 495 lakh e-invoices generated on NIC portal

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Ministry of Electronics & IT has said that over 495 lakh GST e-invoices were generated on the NIC portal by 27,400 tax payers within the first month of introduction.

“Path breaking e-invoice initiative which completed one month on the 31st October, is poised to revolutionize the way businesses interact with each other. According to NIC, within the first month of introduction itself, more than 495 Lakh e-invoices were generated on the NIC portal by 27,400 tax payers. The e-invoice system, the game changer in the GST system, was launched on 1st October, 2020 for the businesses with aggregate turnover of more than Rs. 500 Crores in the financial year,” an official release said.

It will be yet another milestone in India’s journey in enhancing ease of doing business. The data captured by the Invoice Registration Portal will flow seamlessly to GSTR1 return of the tax payer in GST Common Portal (gst.gov.in), thus reducing the compliance burden, the release said.

Starting with 8.4 Lakh e-invoices on 1st October, 2020, the usage has gradually picked up and 31st October, 2020 saw generation of as many as 35 lakh e-invoices in a single day. This coupled with generation of 641 Lakh e-way bills during the month of October, 2020, (by far the highest in a month during two and half years of journey of e-way bill system), establishes the robustness of the system. As per the feedback received from the tax payers, the response of the system is good and generation of IRNs is hassle-free. Proactive communication by NIC Help desk with tax payers has helped them in finetuning their systems to reduce the errors.

Currently, there are three modes of generations of IRN in NIC system. First is the direct API interface of ERP system of tax payer with NIC system. Second is the API interface of ERP system of the tax payer through GSP with NIC system. Third is using the offline tool for bulk uploading of invoices and generating IRNs. Around 15% of the tax payers are using the offline tool for the IRN generations and 85% are integrating through API.

The Government is planning to reduce the aggregate turnover cut off to Rs 100 Crores for generation of IRN by the tax payers in coming days. NIC has already enabled the API and offline tool based trial sites for these tax payers and geared up with the required infrastructure to handle the generation of e-invoices from these tax payers.

Keeping requirements of small tax payers in view, who need to prepare 5-10 B2B invoices in a day, NIC is also developing an offline Excel based IRN preparation and IRN printing tool which will allow them to enter the invoice details, prepare the file to upload on NIC IRN portal, download the IRN with QR code and print the e-invoice with QR code.

Presently, the generation of IRN using API interface is allowed for businesses with aggregate turnover more than Rs 500 crores, GSPs and shortlisted ERPs. Now, direct access will be extended to the tax payers using E-way Bill API interface. Generally, the big businesses will enable their suppliers and clients to use their ERP/SAP systems for generation of invoices. Therefore, it has been decided to facilitate them to enable their suppliers and clients to use their integration channels.

Source: Zee-News

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GST e-invoicing for all B2B transactions from April 1, 2021: Finance Secretary

GST e-invoicing for all B2B transactions from April 1, 2021: Finance Secretary

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The government will roll out the electronic invoicing (e-invoicing) system for all business-to-business (B2B) transactions under the Goods and Services Tax (GST) regime from April 1 next year that will replace physical invoices, finance secretary Ajay Bhushan Pandey said.

The government introduced the e-invoicing system on October 1, 2020 for businesses with an annual turnover over Rs 500 crore. “By January 1, 2021, it will be available to taxpayers with an annual turnover over Rs 100 crore,” he said.

“It is a great step forward as e-invoicing has many advantages both for the business and the tax administration. Buyers and sellers will be able to have realtime information of the invoices. It replaces the physical invoice and will soon replace the existing e-way bill system and taxpayers will not have to generate separate e-way bills,” he said.

Pandey said the e-invoicing system may eventually dispense with the present system of filing GST returns for smaller businesses and micro, small and medium enterprises (MSMEs) because e-invoice will pre-populate returns for such businesses and they will be required to simply pay the taxes.

“The returns will be automatically generated for all supplies for which e-invoices have been issued,” he said after reviewing the progress of the e-invoicing system that was introduced on October 1 for businesses with an annual turnover of over Rs 500 crore. The meeting was attended by senior officials from the Central Board of Indirect Taxes and Customs (CBIC), the National Informatics Centre (NIC) and the GST Network (GSTN).

After review of the progress in the last seven days, Pandey said the implementation of e-invoicing is getting progressively robust. “This is the beginning of a new chapter of the ease of doing business and paying taxes in India. From the first to the seventh day Invoice Reference Number (IRN) generation has grown by 163% and have touched the count of 13.69 lakh IRNs on the seventh day, i.e., on October 7,” he said.

“As e-invoicing is an exceedingly progressive system, we expect that it will also have other major advantages of improving the payment cycle for the industry and give boost to invoice based lending to MSMEs,” he said.
India has been able to build and develop this massive e-invoice system in GST in just seven to eight months, he said. According to a note prepared by GSTN, between October 1 and October 7 more than 69.5 lakh IRNs were generated by over 71 thousand users.

“On the very first day of e-invoicing system, more than 8.40 lakh IRNs were generated by 8,453 users while on October 7 about 13.69 lakh IRNs were generated by 14,100 users, it said.

To be sure, the introduction of e-invoicing system was initially scheduled from April 1, 2020, but it was postponed to October 1 because of the suddent outbreak of Covid-19 pandemic. In order to make the system gradually adjust to the e- invoicing system, it was prescribed that the taxpayers having aggregate turnover of Rs. 500 crore and above only would be required to issue e-invoice from October 1.

Source: Hindustan-Times.

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E-invoice
GST e-invoicing to start from Oct 1, as planned: GSTN CEO

GST e-invoicing to start from Oct 1, as planned: GSTN CEO

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The plan to introduce the e-invoicing regime from October 1 will not be postponed. This was revealed by GST Network (GSTN) CEO Prakash Kumar at Friday’s BusinessLine Knowledge Series webinar on ‘GST: Is it Really Good and Simple?’

While large companies are ready for this change, small and medium enterprises are not. This had raised hope that the new regime would be postponed.
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Kumar also said the GSTN, the IT backbone of the indirect tax system, will, from November, auto-populate the GSTR-3B returns of taxpayers. “The aim is, from November month returns filed in December, GSTR-3B will be auto-populated. First, we are doing this for monthly tax filers. The entire tax-paying community will be covered after that,” he explained.

Over one crore assesses are eligible to file GSTR 3B returns every month, which shows how much tax has been paid actually after deducting the Input Tax Credit (ITC). GSTR-1 is a monthly return (it can also be filed quarterly) on the outward supply statement and shows the quantum of liability. It is alleged that some assesses over-report ITC, which in turn results in lower tax payment.

GSTN recently started to generate GSTR-3B based on the GSTR-1 filed, Kumar said, adding that for two months PDF documents would be given to taxpayers so that people can check and inform the authorities of any error in the process or computation of tax or the ITC.

Source:thehindubusinessline

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GST Network issues FAQs on einvoicing scheme ahead of Oct 1 launch

GST Network issues FAQs on einvoicing scheme ahead of Oct 1 launch

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E-invoicing will not be applicable for business-to-consumer supplies or import bills of entries, while special economic zone units, banking companies, insurers, goods transport agencies and passenger transport companies will be exempt from issuing them.

The GST Network issued clarifications through frequently asked questions on Monday, ahead of the October 1 launch of the scheme for businesses with more than Rs 500 crore turnover. The scheme will introduce a standard invoicing standard for all companies.

“Businesses will continue to issue invoices as they are doing now. Necessary changes on account of e-invoicing requirement to enable reporting of invoices to Invoice Registration Portals (IRP) and obtain Invoice Reference Number (IRN), will be made by ERP or accounting and billing software providers in their respective software,” the IT backbone provider of GST said.

Businesses will need to get the updated version having this facility, GTSN clarified. A dedicated mobile app to scan and verify validity of e-invoice quick response (QR) code will be provided by the government.

“These FAQs not only clarify the key doubts of the industry on the subject matter, but also throw light on the modus-operandi of e-invoicing system,” said Abhishek Jain, tax partner .

E-invoices will be needed for business to business transactions, for exports, credit and debit notes. Suppliers of services by way of admission to exhibition of cinematograph films in multiplex screens will also need e-invoicing.

E-invoicing will enable auto-reporting of invoices into GST return, auto-generation of e-way bills, facilitate standardisation and inter-operability leading to reduction of disputes among transacting parties, improve payment cycles, reduction of processing costs and thereby greatly improving overall business efficiency.

Source: Economic-Times.

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GST e-invoicing for businesses with Rs 500-cr turnover from Oct 1

GST e-invoicing for businesses with Rs 500-cr turnover from Oct 1

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The government will notify a new GST e-invoice scheme under which businesses with turnover of Rs 500 crore and above will generate all invoices on a centralised government portal starting October 1, an official said on Thursday. Earlier, the turnover threshold for businesses was set at Rs 100 crore.

CBIC Principal Commissioner (GST) Yogendra Garg said the existing Goods and Services Tax (GST) return filing system would be improved further by incorporating the features proposed in the new system.

“Yesterday, the GST Implementation Committee has recommended that we will go ahead with October 1 deadline (for e-invoice)… To begin with we will not do it for Rs 100 crore and above, as we had notified. We will soon come out with a notification to make it Rs 500 crore from October 1 and as they stabilise, we will bring a date for Rs 100 crore turnover people,” Garg said at an Assocham event here.

The new turnover threshold would be notified by next week, he added.

The e-invoice was aimed at curbing GST evasion through issue of fake invoices. Besides, it would make the returns filing process simpler for businesses as invoice data would already be captured by a centralised portal.

In November last year, the government had said that from April 1 electronic invoice (e-invoice) would be mandatory for businesses with turnover of Rs 100 crore. Later in March 2020, the GST Council extended the implementation date to October 1.

The Council also exempted insurance, banking, financial instituions, NBFCs and passenger transport service from issuing e-invoice.

It had also decided to introduce the new GST returns filing system in phases between October 2020 and January 2021.

Garg said in the last 3 years of GST, there has not been a single month which saw returns being filed by all the businesses registered under GST.

About 70-80 per cent of GST registered businesses file returns within the due date.

“2019-20 has been a year of consolidation of compliance requirement…. We took a call that instead of introducing the new return system which we had promised, we will carry out improvement in the existing return system and take it closer to what we had promised in the new return system to make the certainty of credit,” he said.

Garg said the GST administration is working on a proposal to make a system available to businesses about how much input tax credit (ITC) is available with a taxpayer.

“The endeavour is to make life simpler for taxpayer. The vision for 4th year of GST is compliance burden gets reduced and e-invoice would help in this,” he said.

With regard to GST audits, Garg said central tax officers have been training state officers on the audit experience, some of the states had some good strategies which we are working on.

“To the extent possible these arre not going to be physical audits, these are more going to be desk audits,” he added.

Source: Economic-Times.

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E-invoicing Structure, as Envisioned by GSTN

E-invoicing Structure, as Envisioned by GSTN

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e-invoicing Structure

The government has recently released a blueprint for implementing the E-invoicing system all over India, which proposes a working model as well as a standard format for the generation of E-invoices.

We shall look into the fundamentals of E-invoicing, to understand its mechanics in a better way.

The Two Important Components of the E-invoicing Model

The E-invoicing working pattern has been agreed upon globally with some minor variations in the mode of implementation. In India, it comprises of two essential components as given below:

  1. Invoice Registration Portal (IRP) – The invoices, credit notes, and debit notes which are generated by the taxpayers, should be registered on the IRP, which subsequently generates a unique reference number known as the Invoice Reference Number (IRN), a QR code, and a digital signature for these items. In fact, an invoice will be valid for the purpose of Input Tax Credit, refund, etc., only if it is registered on the IRP
  2. A standard format for the E-invoice – This standard pattern comprises of data fields and the necessary specifications. It is highly recommended for the businesses/taxpayers to upgrade their systems so as to follow this E-invoice format which enables seamless interoperability as well as data exchange all through the system.

The E-invoice Standard

The standardized E-invoice format recommended for India has been formulated in accordance with the global practices and the industry requirements for businesses in India. Further, this format has been confirmed after consulting with the respective trade authorities, the Institute of Chartered Accountants of India (ICAI), and also as per the opinions from the public.

There are around 120 fields, out of which about 50 are to be uploaded mandatorily on the Invoice Registration Portal for attaining the reference number as well as the digital signature.

Section

 Compulsory Non-compulsory Total Scope
Details of Invoice

11

 7

18

 Recognizing the distinctiveness and nature of invoices like the invoice number, type, date, etc., and also the IRP-generated details like the IRN
Details of Items

9

 24

33

 Details of line items like quantity, HSN, tax rate, etc.

Invoice Reference Details

 2 8

10

 Provides reference for previously generated or supplementary documents for the invoice
Additional Details of Items

1

 8

9

 Extra details which are related to line items like batch, barcode, serial numbers, etc.

Details of the Suppliers

 5 5

10

 GSTIN and address of the suppliers
Details of the Buyers

6

 3

9

 GSTIN and address of the buyers
‘Ship To’ Details

7

2

9

 Address and other information like mode of supply, type of transaction, etc.

‘Dispatch From’ Details

 4 4

8

 Address and other information like E-commerce operator through which it was dispatched, state, etc.
*Details of Supporting Documents

0

 2

2

 The URLs which support the documentation, if any
*Payment Details

4

 5

9

 Payment terms, account information, etc.
Total 49 68 117

These sections are non-compulsory. If used, the mandatory fields are highly recommended. For other sections, ‘compulsory’ indicates that it is essential for registering on the IRP. In the case of line item, the data would repeat for each of these.

The E-invoicing Workflow

After the taxpayers generate the invoice using their respective accounting/ERP systems, the procedure of getting it registered with the government on the IRP, should be carried out.

There exists two components for the E-invoicing workflow namely,

  • The communication between the government and the taxpayers
  • The communication between GST, E-way bill system, and the IRP

Now let us look into the details of these two E-invoicing components.

The communication between the government and the taxpayers

The taxpayers are required to upload the compulsory fields from the invoices to the IRP in the JSON format. Further, there is provision to upload it through different methods like offline tools, GSPs (GST Suvidha Providers), web portal, mobile app, SMS, and via direct API.

Apart from providing a standard format for E-invoice, the government has also offered a model in which a unique IRN would be generated, which is technically referred to as ‘hash’, using SHA-256. Although the taxpayers could generate the IRN using their respective systems, the invoice would be valid only if it is registered with the IRP. The IRN thus generated along with the digital signature and QR code, would be reverted to the taxpayers through the same channel.

The communication between GST, E-way bill system, and the IRP

Considering the high volume of transactions on the IRP system while getting the invoice registered, the IRP comes with multiple nodes known as ‘Registrars’. The taxpayers have the option to register their invoices via any of these Registrars, and further, the latter preserves the data for the past 24 hours.

The IRP system is connected to the GST system, which acts as the repository of all IRNs, so as to ensure that there is no duplication of records. This arrangement also enables the populating of GST ANX-1 for the suppliers. Further, the E-invoice data is made available in the E-way bill system, and the transporters/taxpayers would just have to update the information on Part B in order to obtain a valid E-way Bill Number.

In fact, the taxpayers would have to upload the invoice data only once to the IRP system, wherein, the GST and E-way bill requirements would be dealt with.

To conclude, the basics of the E-invoice standard has been dealt with in detail here, which helps you to understand the entire process in a better manner.

E-invoice
New GST filing format, e-invoicing to help in ease of doing biz, reporting for taxes: GSTN CEO

New GST filing format, e-invoicing to help in ease of doing biz, reporting for taxes: GSTN CEO

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GST Network CEO Prakash Kumar on Friday said e-invoicing and the new format for filing GST will help improve the ease of doing business and reporting for the indirect taxes.

“E-invoicing is a step towards improving ease of doing business and reporting for GST. Manual data entry leads to transcription errors and wrong entries,” Kumar said while addressing an event on ‘E-invoicing and New GST Return Format’ organised by the PHD Chamber of Commerce and Industry.

There is a need for standard to ensure complete interoperability, he said. “The economies in the high-income group OECD are at the forefront of invoice digitisation,” he said. The GSTN CEO said that in India, the aim is to make digitisation part of business process of taxpayers and eliminate all manual reporting.

N K Gupta, chairman (indirect taxes committee) of PHD Chamber, said e-invoicing is the new system through which business-to-business (B2B) transactions are authenticated electronically by GSTN.

This is a major step towards the push for a digital economy, he said and lauded that GSTN is improving every day and GST is digitised to a great extent. Sanjay Aggarwal, senior vice-president of PHD Chamber, said e-invoice is the future means of electronic billing.

It has been adopted by many governments internationally. It has been implemented in a staggering manner over a period of time, initially launched for B2B and B2G (business-to-government), he added.

Source: Economic-Times

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

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What is E-invoicing?

What is E-invoicing?

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E-invoicing

E-invoicing refers to a method in which the entire B2B invoices that are generated by the accounting software, are electronically authenticated by GSTN (Goods and Service Tax Network) for any further use such as generating E-way bills, preparing returns, and the like. In fact, E-invoice does not involve generating or creating invoices from the common portal or the tax department; rather, it includes the submission of invoices already generated from the respective accounting software at the central GST portal.

However, the GST system fails to recognize the invoice formats generated by the different accounting/ billing software. In this scenario, there arises the need for a standard invoice format (schema) which could be easily uploaded on the GST portal. This standard schema needs to be followed by the entire accounting/ billing software in order to generate the JSON of every invoice in that format so as to make the uploading process on the GST portal easy. The E-invoice schema provided by the GST system has mandatory as well as non-mandatory fields which could be used by all types of businesses.

The E-invoice mechanism is likely to be rolled out in different phases starting from January 1st 2020, upon a voluntary basis. In the beginning, it will be applicable only for those taxpayers who are above a particular turnover or an invoice value, and also for volunteers. Later on, it will be implemented for the entire taxpayers in a step-by-step manner.

What do you mean by E-invoicing?

If an invoice is generated by a software on the computer or Point of Sales (PoS) machine then does it become an e-invoice? Is e-invoice as a system where taxpayers can generate the invoices centrally? Many such questions are raised when e-invoice gets discussed.

E-invoice does not mean generation of invoices from a central portal of tax department, as any such centralization will bring unnecessary restriction on the way trade is conducted. In fact, taxpayers have different requirements and expectation, which can’t be met from one software generating e-invoices from a portal for the whole country. Invoice generated by each software may look more or less same, however, they can’t be understood by another computer system even though business users understand them fully. For example, an Invoice generated by SAP system cannot be read by a machine which is using ‘Tally’ system. Likewise there are hundreds of accounting/billing software which generate invoices but they all use their own formats to store information electronically and data on such invoices can’t be understood by the GST System if reported in their respective formats. Hence a need was felt to standardize the format in which electronic data of an Invoice will be shared with others to ensure there is interoperability of the data. The adoption of standards will in no way impact the way user would see the physical (printed) invoice or electronic (ex pdf version) invoice. All these software would adopt the new e-Invoice standard wherein they would re-align their data access and retrieval in the standard format. However, users of the software would not find any change since they would continue to see the physical or electronic (PDF/Excel) output of the invoices in the same manner as it existed before incorporation of e-Invoice standard in the software. Thus the taxpayer would continue to use his accounting system/ERP or excel based tools or any such tool for creating the electronic invoice as s/he is using today.

To help small taxpayers adopt e-invoice system, GSTN has empaneled eight accounting & billing software which provide basic accounting and billing system free of cost to small taxpayers. Those small taxpayers who do not have accounting software today, can use one of the empaneled software products, which come in both flavors, online (cloud based) as well as offline (installed on the computer system of the user).

E-Invoicing Under GST

The GST Council has approved introduction of ‘E-invoicing’ or ‘electronic invoicing’ in a phased manner for reporting of business to business (B2B) invoices to GST System, starting from 1st January 2020 on voluntary basis. Since there was no standard for e-invoice existing in the country, standard for the same has been finalized after consultation with trade/industry bodies as well as ICAI after keeping the draft in public place. Having a standard is a must to ensure complete inter-operability of e-invoices across the entire GST eco-system so that e-invoices generated by one software can be read by any other software, thereby eliminating the need of fresh data entry – which is a norm and standard expectation today. The machine readability and uniform interpretation is the key objective. This is also important for reporting the details to GST System as part of Return. Apart from the GST System, adoption of a standard will also ensure that an e-invoice shared by a seller with his buyer or bank or agent or any other player in the whole business eco-system can be read by machines and obviate and hence eliminate data entry errors.

The GST Council approved the standard of e-invoice in its 37th meeting held on 20th Sept 2019 and the same along with schema has been published on GST portal. Standards are generally abstruse and thus an explanation document is required to present the same in common man’s language. Also, there are lot of myth or misconception about e-Invoice. The present document is an attempt to explain the concept of e-invoice, how it operates and basics of standards. It also contains FAQs which answer the questions raised by people who responded to the draft e-invoice standard used for public consultation. It is expected that the document will also be useful for the taxpayers, tax consultants and the software companies to adopt the designed standard.

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What is E-invoicing under GST

What is E-invoicing under GST

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What is E-invoicing?

E-invoicing refers to a method in which the entire B2B invoices that are generated by the accounting software, are electronically authenticated by GSTN (Goods and Service Tax Network) for any further use such as generating E-way bills, preparing returns, and the like. In fact, E-invoice does not involve generating or creating invoices from the common portal or the tax department; rather, it includes the submission of invoices already generated from the respective accounting software at the central GST portal.

However, the GST system fails to recognize the invoice formats generated by the different accounting/ billing software. In this scenario, there arises the need for a standard invoice format (schema) which could be easily uploaded on the GST portal. This standard schema needs to be followed by the entire accounting/ billing software in order to generate the JSON of every invoice in that format so as to make the uploading process on the GST portal easy. The E-invoice schema provided by the GST system has mandatory as well as non-mandatory fields which could be used by all types of businesses.

The E-invoice mechanism is likely to be rolled out in different phases starting from January 1st 2020, upon a voluntary basis. In the beginning, it will be applicable only for those taxpayers who are above a particular turnover or an invoice value, and also for volunteers. Later on, it will be implemented for the entire taxpayers in a step-by-step manner.

What are the Benefits of the E-invoicing System?

There are several benefits for implementing an E-invoicing system of which some are provided below:

  • It enables the automatic preparation of GST returns (ANX-1 and ANX-2)
  • It facilitates the system to match the input credit liability with the output tax, automatically
  • E-invoice could be generated for invoices, credit/debit notes, and other appropriate documents
  • E-invoicing can be further used for generating E-way bills by just providing  the details of the vehicle
  • It helps to decrease the issues concerned with input credit verification considerably, as the same data would be reported to the buyer as well as to the tax department
  • The invoices which are uploaded by the suppliers for the purpose of authentication would be shared automatically with the buyers for reconciliation
  • It offers complete information about the B2B invoices
  • It enables one-time reporting of the B2B invoice data that is generated by the supplier, which helps in minimizing the efforts of reporting in different formats (GSTR 1/E-way bills).

How to Create an E-invoice?

Generally, the taxpayers would be accountable for the generation of an E-invoice, and they need to report the same to the Invoice Registration Portal (IRP) as well for authentication, following which it generates a unique Invoice Reference Number (IRN) and digitally signs the E-invoice. Further, it also generates a QR code and returns the invoice to the vendor.

Given below are the different steps involved in E-invoicing:

Step 1: The vendor creates the invoice in his accounting/billing system. This invoice should conform to the standard E-invoice schema and must have the necessary parameters. The vendor’s software generates a JSON for every B2B invoice, which would be uploaded on the IRP portal

Step 2: In the next step, an Invoice Reference Number (IRN) is generated, which is optional. In fact, the vendor himself can generate this number which is based upon the particular algorithm

Step 3: In this step, the JSON of the E-invoice is uploaded into the IRP by the vendor. This can be uploaded directly into the IRP, or by way of GSPs (GST Suvidha Providers), or other third parties

Step 4: In this step, the IRP generates/validates the Hash of the uploaded JSON, if it is done by the vendor. Further, upon authentication of the same by the central registry of the GST system, the IRP adds its signature on the invoice data. The Hash thus computed by the IRP becomes the IRN (Invoice Reference Number) of the E-invoice. This number shall be unique for each invoice, and serves as the unique identity for the same for the whole financial year in the GST system

Step 5: In this step, the uploaded data is shared with the GST/E-way bill system

Step 6: In this step, the IRP returns the digitally-signed JSON with IRN to the vendor, along with a QR code. Further, the registered invoice would also be sent to the vendor as well as buyer on their respective mail ids as per what was mentioned in the invoice.

Summary:

In general, E-invoices are not generated by the GST portal; rather, those are generated by the accounting/billing system of the taxpayers. They will be uploaded into the GST ANX-1, once they have been validated as well as registered by the invoice registration system. An E-invoice will be authenticated through the digital signature of the IRP. There are many benefits for the E-invoicing system including the auto-preparation of GST ANX-1 and ANX-2 returns, handling of input credit verification issues, and many more.