Detailed Guide and FAQ's on E-Invoicing under GST

Frequently Asked Question on E-Invoicing under GST Act

Beginning on October 1, 2020, taxpayers with an aggregate revenue over Rs. 500 crore will be subject to the GST's e-Invoicing system and from January 1st, 2021, e-invoicing was made mandatory to companies with a combined turnover of more than Rs. 100 crore.

The CBIC also announced on March 8th 2021 that starting on April 1st 2021, company having annual sales between Rs. 50 crore and Rs.100 crore will be able to use the e-invoicing system. The government has extended the use of electronic invoicing to companies with annual revenue of more than Rs 20 crore, effective April 1, 2022.

The whole turnover of all GSTINs in India under a single PAN would be included in the aggregate turnover for e-invoicing. You can check and confirm the GSTIN for which you wish to raise the e-invoice using the GST search tool if you have several GSTINs on hand.

This article addresses numerous FAQs regarding the GST E-invoicing system.

Basics of E-Invoicing

What is E-Invoicing?

A system of raising invoices known as electronic invoicing or e-Invoicing, enables invoices produced by one software to be read by any other software, obviating the need for any further data entry or mistakes. In other words, it is an invoice that is created in a standard format and whose electronic data may be exchanged electronically, assuring data interoperability.

Is e-invoicing mandatory? Who is covered by e-invoicing?

As of October 1, 2020, all firms whose combined revenue has exceeded the ceiling of Rs. 500 crore in any of the prior fiscal years from 2017–18 to 2019–20 must issue invoices. E-invoicing also became mandatory for companies with a turnover of more than Rs. 100 crore on January 1, 2021, for any fiscal year between 2017–18 and 2019–20.

From April 1, 2021, it was also made available to companies with annual sales of more than Rs. 50 crore. The government has expanded the use of electronic invoicing to companies with annual revenue of more than Rs 20 crore, effective April 1, 2022.

Nevertheless, as stated in CBIC Notification No.13/2020 -Central Tax, the following types of registered persons shall not be subject toe-invoicing, regardless of turnover:

• An insurance provider, bank, or other financial organisation, such as an NBFC
• Goods Transport Organization (GTA)
• Licensed individual offering passenger transportation services
• a registered individual offering admission to the showing of motion pictures in multiplexes as a service

What are the benefits of E-invoicing?

The following are some benefits of electronic billing:

• B2B invoices are reported once during generation, reducing the need for numerous forms of reporting.
• When employing an e-invoicing system, the majority of the data in form GSTR-1 can be kept ready for filing.
• The data from an e-Invoice can also be used to create e-waybills with ease.
• Data reconciliation between the books and the submitted GST returns is largely unnecessary.
• It is possible to provide real-time tracking of invoices created by a supplier, as well as quicker input tax credit availability. It will also lessen problems with input tax credit verification.
• Better automation and control of the tax filing process.
• Fewer frauds because the tax authorities will also have real-time access to data.
• Elimination of the production of fake GST invoices.

Does the e-invoice schema apply to reverse charge mechanism (RCM) transactions?

Yes, reverse charge mechanism (RCM) transactions are covered by the e-invoice scheme.

If an organization's turnover exceeds the criteria for qualifying for e-invoicing in March 2021(i.e., FY 2020-21). When should it begin producing electronic invoices?

Starting with FY 2017–18, the prior year's turnover should be taken into account to determine eligibility for e–invoicing. As a result, starting with the start of the following fiscal year, a business whose annual turnover surpasses the set threshold must create electronic invoices. For instance, e-invoicing will be used starting on April 1, 2021, if the threshold turnover was exceeded in the fiscal years 2020–21.

The aggregate turnover for e-invoicing eligibility is to be considered from FY 2017-18 onwards. However, GST was implemented only on 1st July 2017. Hence, for FY2017-18, is the aggregate turnover to be computed from 1st April 2017 or 1st July 2017?

The Central Goods and Services Tax (CGST) Act's definition in Section 2(6) must be followed when calculating the total turnover fore-invoicing. The total turnover for the fiscal year 2017–18 is to be calculated from July 1 through March 31, 2018.

What are the supplies currently covered under e-invoicing?

Currently, e-Invoicing is applicable to:

• supplies provided to registered users (i.e., B2B supplies),
• supplying SEZs with goods (with or without tax payment),
• exports (with or without tax payment), as well as considered exports,
• are made by the group of taxpayers who have been notified.

Is e-invoicing applicable to nil-rated or wholly-exempt supplies?

No, e-invoicing is not applicable to totally exempt or nil-rated supplies because a bill of supply, not a tax invoice, is issued in these circumstances.

Do financial or commercial credit notes need to be reported to the IRP?

No, you only need to report credit and debit notes to the IRP if they were issued in accordance with Section 34 of the CGST or SGST Acts.

E-Invoicing Workflow

How will Three-Invoicing model work?

Businesses will continue to create invoices on their separate ERPs in accordance with the e-Invoicing paradigm, exactly as they havein the past. To ensure a level of standardisation and the machine-readability of these bills, only the standard, schema, and format for the creation of invoices will be specified. The taxpayer will be responsible for producing the invoice.

It must be recorded at the time of generation to the GST Invoice Registration Portal (IRP). The IRP adds the digital signature for thee-Invoice, the OR code, and generates a special Invoice Reference Number (IRN) for it. The QR Code will hold the key information from the e-Invoice and provide it back to the taxpayer who created it in the first place.Additionally, the IRP will email the seller's registered email ID with the signed e-Invoice.

What will the workflow of e-Invoice be like?

An workflow Invoice's had two main components. The interaction between the company/supplier and the invoice registration portal is the first phase (IRP). Invoices are created by the supplier, who then submits aJSON file of those invoices to the IRP. Before sending the invoice back to the supplier, the IRP verifies the data on it, creates an IRN and QR code, and digitally signs the document.

How do I create an electronic invoice?

The process to create an e-invoice varies with the following four methods: 

• Offline tool
• Using GST Suvidha Provider
• Through Direct Integration
• Via API integration with sister concern GSTIN
• Using E-way Bill API credentials

What will be the data contained in an e-Invoice?

According to the GSTN's draught format, an e-Invoice will have the following components:

• The technical field names and descriptions for each field are included in this section of the e-Invoice schema. It will also staten whether a field is required or not, and it includes some sample values andnexplanations.
• Masters: Masters will define the set of inputs for a few pre-defined fields in GSTN. It contains fields such as UQC, State Code, invoice type, supply type, and others.
• e-Invoice Template: The template allows the reader to correlate the terminology used in other sheets and is in accordance with the GST laws. Green and yellow markers indicate mandatory and optional fields, respectively.

What are the various types of fields in an e-invoice?

Data for fields with the label "Mandatory" must be submitted without fail.

If a necessary field is empty, it can be reported as nil.

The 'Optional' fields can be filled in or left blank. Only certain types of enterprises and situations are addressed by them.

Some of the 'Optional' portions of the e-invoice can have required fields. For instance, the portion titled "e-way bill details" is designated as "Optional." The 'Mode of Transportation' field, however, is required for this part.   

What is the maximum number of line items supported by an e-Invoice?

The maximum number of line items allowed per e-Invoice is 1,000.

Does the e-invoice need to be signed again by the supplier?

The Central Goods and Services (CGST) Rules, 2017, Rule 46applies in this situation. Rule 46 states that when issuing bills, the supplier or his authorised agent must sign or digitally sign them. A caveat to Rule 46, however, stipulates that if an electronic invoice is issued in compliance with the Information Technology Act of 2000, no signature or digital signature is necessary. Therefore, it has been determined that a supplier will not be required to sign or digitally sign the document in the event of e-invoices.

Can a company add their logo to the electronic invoice template?

No placeholder for a company's logo will be included in thee-Invoice design. Although the company's accounting and billing software can accommodate this, the IRP will not receive the logo.

Reporting of E-invoices

If it is necessary for an invoice or credit/debit note to be reported to the IRP by an informed person, will it still be legitimate without an IRN?

A notified person is required to create an invoice in accordance with Rule 48(4) of the CGST Rules by uploading the required information in Form GST INV-01 on the IRP after acquiring an IRN. According toRule 48(5), invoices issued by such notified people in any other way than that described in Rule 48(4) are not to be considered invoices. Therefore, if an invoice or debit/credit note is issued by a notified person, it will only be legally binding with an IRN.

What are the types of documents that are to be reported into the IRP?

The e-Invoicing programme will cover the following documents:

• Invoices from the provider
• Credit Notes from the Vendor
• Debit Notes from the VendorAny other document as required bylaw to be reported by the creator of the document

What are the modes available for getting e-invoices registered on the IRP?

There will be a variety of ways to register e-Invoices on the Invoice Registration Portal (IRP). Some of the suggested modes include:

• based on the web,
• an API,
• an offline tool, and
• a GSP

What are the prerequisites to generate an e-invoice?

Here are the prerequisites for the generation of e-invoices:

• The individual who generates an e-invoice or e-way bill must be enrolled on the GST portal.
• He should have a legitimate reportable document on hand, such as an invoice, debit note, or credit note.
• The taxpayer should either have a valid JSON file that adheres to the e-invoice schema or should have integrated his ERP system withAPIs if he is producing e-invoices in bulk.

How can one verify the authenticity of an e-invoice?

Anyone can check an e-accuracy invoice's by uploading the signed JSON and using the option to "Verify Signed Invoice" under the"Search" option. The QR code printed on the invoice can also be verified by downloading the QR Code Verify app.

Can more than one IRN be generated for the same invoice?

No, the e-invoice system makes sure that the same invoice from the same supplier pertaining to the same financial year is not uploaded again in order to generate more than one IRN by checking in the CentralRegistry of the GST system. Such bills will be denied by the IRP.

Can a cancelled e-invoice number be used again?

No, the same invoice number cannot be used to create a new invoice once an IRN has been cancelled. The IRP will reject the same if it issued again.

Can e-commerce operators generate e-invoices on behalf of the sellers who sell using their platforms?

Yes, the e-commerce operator may create e-invoices on behalf of such suppliers if they are informed individuals required to record invoices under Rule 48(4) and sell through an e-commerce firm.

Amendment/cancellation of e-invoices

Can an e-Invoice be cancelled partially/fully?

An e-invoice must be fully cancelled; it cannot be partially cancelled. It must be reported on the IRN within 24 hours of being cancelled.After 24 hours, cancellations cannot be made on the IRN and must be made manually on the GSTR-1 return on the GST portal before filing.

How can an e-invoice be amended?

Only on the GST site in the GSTR-1 return can changes to an e-invoice be made.

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