The introduction of GST to this digital era provided the businesses to transport goods from one place to another which was facilitated by the E-way bills. Similarly, the GST council has decided the implementation of E-invoice under the GST rules. So that it would be easier for people to submit the pre-generated invoice on the common GST portal and thus, It automates multi-purpose reporting with one-time reporting of invoice details.

What is E-Invoicing?

E-invoicing is an electronic invoice or a document that is exchanged among the buyer and seller and used to authenticate under the government tax port through the GST network. It is a digital invoicing system in which business businesses are prepared and validated by the GST network.

E-invoices has introduced India in a phased manner based on the turnover of the companies. Under the phase it was launched for businesses having an annual turnover of 500 crores on October 1st,2020 then under the 2nd phase it went live for companies having an annual turnover of 100 crores on 1st January 2021, and finally for companies having annual turnover of 50 crores on 1st April 2021.

Need for the introduction of E-invoice

Under the old system, the seller needed to prepare and report in two different systems i.e GST portal and the E-way bill. businesses had to generate invoiced using different software and fill them in GSTR 1 and GSTR-2A form and made them available to the recipients in view-only mode. Like wise transporters also had to generate e-WAY bills by importing invoices into an excel sheet.

To end this endless paperwork the government introduced the E-invoice system which allowed easy sharing of invoices digitally and making it easy while filing returns as the E-invoices are pre-populated.

Benefits of E-invoices

  • Seamless generation of E-way bill
  • Easy and precise input tax credit claim
  • Real-time tracking of invoices
  • Minimize mismatching of invoices during reconciliation
  • Improved business efficiency

Documents required for generating E-invoice

  • Invoice by a supplier
  • Debit notes by a supplier
  • credit notes by a supplier

Generating E-invoice

E-invoices can be generated similarly to the e-way bill. It can be generated from the taxpayers’ system and sent to the invoice registration portal for verification.

The GST E-invoice system mainly has two parts

  • Communication between the businesses and invoice registration portal
  • Communication between the buyer and invoice registration portal, GST e-way billing system

Nowadays most businesses are generating E-invoices through various accounting software and then the invoices are reported to the invoice registration portal (IRP) than the IRP provides a digitally signed invoice with a unique invoice registration number and QR code. This helps the interaction between the accounting software and IRN portal by using API to generate E –invoices quickly.

Documents required for generating an invoice

  • Supplier’s name, GSTIN, address, pin code
  • Buyer’s name, GSTIN, address, pin code
  • Buyer’s bank details and transaction number
  • Goods details
  • Invoice date and number
  • Dispatch details
  • Invoice type
  • Debit and credit details
  • Tax schemes
  • Total invoice amount and accessible values

Apart from the mandatory documents, the GST council has also listed some optional requirements to be filed depending upon the businesses .and then the invoices can be uploaded to the IRP portal in a JSON file.

Unique IRN creation

After uploading the invoices in the IRP portal it will generate a hash parameter based on the details provided and check for any duplicate invoices under the central registry. after authenticating the B2B invoices the IRP will digitally sign and create a QR code for the seller.

Additionally, IRP will send the payload to the GST portal for filling returns and automatically file the GSTR 1 for the seller and GSTR 2A for the buyer for the relevant period which will help in calculating the liability and input tax credit claims.

How will E-invoice curb tax fraud?

After the introduction of E-invoice, the tax authorities will have real-time access to the transactions as the invoices will be generated, through the GST portal. It will help them detect the illegal manipulations of the details and identify the fake invoices by matching the input tax credit with the output tax credit. This will help the authorities to detect fraud claims and prevent tax crimes

Conclusion

Since GST and E-invoice are important in today’s world of business and have been made mandatory by the government, proper accounting software is required to meet the needs of business and stay ahead. Most, importantly fill in the details correctly else it will create problems while filing returns.

Frequently asked questions on E-invoice

  1. What are the documents for E-invoicing?
    • Invoices by the supplier
    • Debit and credit notes
    • Other documents as notified by GST council
  2. To whom all E-invoicing will apply?
    • Businesses having an annual turnover of more than 100 crores.
    • However, there are some exceptions for financial institutions, NBFCs, insurance institutes, passenger transportation services, and the sale of online tickets.
  3. Can E-invoice be canceled?
    • Yes, it can be canceled wholly but not partially. On cancellation of an E-invoice, it has to be reported to the IRN within 24 hours and after that, no more cancellations will be entertained.
  4. Is there a facility for bulk invoicing on IRP?
    • No there is no such facility you have to upload one invoice at a time
  5. Is it necessary to digitally sign the E-invoice?
    • The invoice will be automatically get signed after validation
  6. Is it possible to make changes to E-invoice?
    • Yes, you will be allowed to make any modifications and file the GST returns
  7. What are various ways for getting E-invoices?
    • Multiple websites and apps provide these services .one of the most popular website is the GST suvidha provider
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