The Full Guide On GST E-Invoicing in India

GST e-invoicing is the submission of electronic invoices for goods and services through the government GST portal. The GST Network will authenticate the B2B invoices and assign a unique identification number to each invoice for businesses with more than ₹50 crore turnover. India's GST e-invoicing took effect on October 1, 2020.

The GST e-invoice generation system aims to reduce GST evasion in India. It has numerous benefits over paper invoices, including cost reduction, global acceptance, and increased accuracy. Businesses who rely on e-invoicing for processing accounts payable get to save a lot of time.

This article provides information on the GST e-invoicing in India, including who it applies to, how it works, and the consequences for not using it.

Let’s get started!

  1. Who does e-invoicing GST apply to in India?
  2. Is e-invoicing mandatory in India?
  3. How to register on the GST e-invoicing system
  4. How to generate an e-invoice with IRP
  5. What happens if you don’t use GST e-invoicing?
  6. Why did the Indian government introduce e-invoicing?
  7. How does e-invoicing ensure GST compliance?
  8. Getting started with GST E-invoicing
  9. Explanation of e-invoice fields
  10. Mandatory fields of the e-invoice
  11. More Information about GST e-invoicing in India

Who does e-invoicing GST apply to in India?

GST e-invoicing applies to all businesses whose aggregate turnover is more than ₹50 crore. Initially, it only applied to businesses whose total turnover exceeded ₹500 crores in the financial years from 2017/2018 to 2019/2020. But on April 1, 2021, CBIC amended GST e-invoicing.

According to the CBIC Notification No.13/2020 – Central Tax, e-invoicing does not apply to some people regardless of their turnover. Those categories of people include:

  • Goods Transport Agencies (GTAs)
  • A financial institution, an insurer, or a banking company, including an NBFC
  • Registered people supplying passenger transportation services
  • An (SEZ) Special Economic Zone unit
  • Registered people offering services through admission to cinematographic films exhibitions in multiplex services
  • Government departments and local authorities (excluded through CBIC Notification No. 23/2021)

Is e-invoicing mandatory in India?

Taxpayers whose turnover exceeds the specified limits in any financial year from 2017/2018 to 2019/2020 must comply with e-invoicing. On October 1, 2020, the aggregate turnover limit was ₹500 crore per Notification No 61/2020-Central Tax and 71/2020-Central Tax. Later, the CBIC changed the limit to ₹50 crores.

The aggregate turnover includes the turnover of all GSTINs under a single PAN across India.


How to register on the GST e-invoicing system

Any GST registered taxpayer who wants to generate IRNs can register on the trial e-invoice system with a GSTIN.

If you are registered on the e-way bill portal, you don't need to register on the e-invoice system again. You may simply log in with your EWB credentials.

Here are the required steps for registration on the e-invoice system:


Step 1: Visit the IRP portal.

Use the same login credentials on the e-way bill portal to login onto the e-invoice registration portal (IRP).

If you’re not registered on the e-way bill portal, use your GSTIN and the mobile number registered with the GST system. The screen will open once you enter the URL of the e-invoice system.


Step 2: Navigate to the 'Registration' tab.

Click on the e-invoice registration tab to register. The e-invoice registration form will open, prompting you to enter your GSTIN and the captcha code displayed. Once done, click ‘Go’ to submit the request.

After submitting your request, you will be redirected to the e-invoice registration form.


Step 3: Verify your details.

Now, you will see personal details such as applicant name, address, trade name, mobile number, email, and more, as registered on the GST portal. Click on ‘Send OTP’ to verify these details.

You will receive a message containing a one-time password (OTP) on the registered mobile number. Enter the OTP in the registration form and click the ‘Verify OTP’ button.

Upon successfully verifying the OTP, you will be prompted to enter a username of choice (consisting of 6-15 characters).

Once done, click on the ‘Save’ button. Now, you can log into the e-invoice system using the credentials you created.


How to generate an e-invoice with IRP

Step 1: Choose any of the two options for IRN generation below:

  • Download the bulk generation tool and use it to bulk upload invoices. The tool will generate a JSON file that you can upload on the e-invoice portal for bulk IRN generation.
  • Have the IP address of the computer system whitelisted on the e-invoice portal for direct API or integration via GST Suvidha Provider (GSP).

Step 2: Now, raise a regular invoice on your ERP software or billing software. It must contain all the necessary details such as GSTN of the supplier, tax amount, billing name and address, item rate, transaction value, GST rate applicable, etc.

Step 3: Use the JSON file or through One API or an application service provider to upload the details of the invoice onto the IRP. Ensure that all mandatory fields are uploaded.

You can also use mobile app-based or SMS-based modes to interact with IRP, which serves as a registrar for e-invoicing authentication. IRP validates the key details of the B2B invoice.

Step 4: Check for any duplications, then generate the invoice reference number (IRN) for reference.

IRP will generate the invoice reference number (IRN) based on Seller GSTIN, FY in YYYY-YY, invoice number, and document type (INV/DN/CN).

IRP then digitally signs the invoice and creates a QR code in Output JSON for the supplier. The supply seller will receive an email on the generation of the e-invoice (if provided in the invoice).

The IRP forwards the details to the GST and e-way bill portals. The seller’s GSTR-1 will be auto-filled for the respective tax period.


What happens if you don’t use GST e-invoicing?

Failure to issue an invoice and issuing an incorrect invoice is considered an offense under GST and attracts penal provisions. The penalty for non-issuance of the invoice is ₹10000 or 100% of the tax due, whichever is higher. Incorrect invoicing attracts a ₹25000 penalty.

The e-invoice system requires you to upload an invoice on the IRP (invoice registration portal). It intimates all your B2B supply transactions to the government. First, you will need to generate an invoice or the credit or debit note on your accounting software/ERP.

Also, you need to upload the invoice on the IRP to get your unique Invoice Reference Number (IRN). Failure to do that means non-intimation of supply transactions to the government, and any invoice issued without the IRN is considered invalid under the GST law.

Failure to generate IRN is considered as non-issuance of invoice per the sub-rule (5) of rule 48 of the CGST Rules.


Why did the Indian government introduce e-invoicing?

The main reason for introducing e-invoicing by the Indian government is to curb the fake tax credit menace and make invoicing transparent. E-invoicing aims to help Indian businesses grow by improving how they interact with each other.

Not only has e-invoicing played a major role in the growth of businesses in India, but it has also helped make the planet greener. It is cloud-based and thus eliminates the need for pen and paper for invoicing.

The e-invoicing system has reduced audit risks. It streamlined invoice management for many enterprises, increasing team efficiency in accounts receivables management. No manual intervention is required, and it allows higher invoice processing.

Through e-invoicing, businesses of different sizes can embrace digitization. There will be fewer accounting and tax filing errors with ERP and tech-based solutions for billing. Companies will pass data to the GST system seamlessly.

With the e-invoicing system, enterprises can generate invoices electronically and automate different processes. It's fuel for businesses to grow.

With e-invoicing, the need for data reconciliation between the books and GST returns filed is almost eliminated. You can report B2B invoices on generation, which eliminates the possibility of reporting in multiple formats.

Storing data in form GSTR-1 and preparing them for filing is pretty easy with an e-invoicing system. With e-Invoice data, you can generate e-way bills seamlessly. The input tax credit can be available more quickly, and you can enable real-time tracking of invoices prepared by a supplier.


How does e-invoicing ensure GST compliance?

E-invoicing ensures GST compliance with a GSTN system that captures all transactions at the incipient invoice generation stage. Also, the GSTN auto-populates the sale and purchase returns of GST registered sellers and buyers. It captures all GST-applicable B2B transactions in real-time.

If a B2B invoice does not have an IRN, you cannot use it to avail ITC (Input Tax Credit). This mitigates fraud by enterprises. E-invoicing is running in many countries globally, allowing countries to follow contemporary global standards of invoice format for business transactions.

E-invoicing is mandatory for all GST-registered businesses, except for goods and passenger transport, financial institutions, SEZ units, B2C, and GST-exempted transactions. It improves account reconciliation, provides accurate ITC claims, reduces data input errors, and shortens payment cycles.

The government can track invoices in real-time, reducing errors of the input tax credit. E-invoicing has not only reduced the burden of businesses matching invoices but has also availed correct ITC on time. The government no longer suffers losses due to unscrupulous practices of fake and fraudulent tax invoices.

The burden of GST compliance for trade has reduced thanks to the automated population of e-invoices in the GST returns of sellers and buyers. However, the government needs to ensure that there are no technology glitches in e-invoicing.

Electronic invoicing aims to transform GST compliance into an auto-regulated system. It supports a clean environment by providing for the retention of records in a cloud environment.


Getting started with GST E-invoicing

The GST e-invoicing system mandates businesses to generate ‘e-invoice’ for every sale on the government GST portal. The system only applies to taxpayers whose turnover exceeds the threshold limit set by the government.

If your business falls under the ₹50 crore aggregate turnover threshold, you will receive a unique number whenever an e-invoice needs to be generated. Then, you can match the number with the invoices written in the sales return and pay taxes for verification.

While you can manually upload your JSON files to the IRP portal, it helps to automate the process with One API integration. You only need to connect by API, and you will be set for GST e-invoicing.


Connect to the GST Portal

Explanation of e-invoice fields

S.No.

Defined Columns

Meaning

1

Technical field name

This is the technical name given to the field

2

Cardinality

It shows whether the invoiced item is optional or mandatory and whether it can be repeated or not

3

Small description of the field

It refers to the field name to be displayed in the e-invoice

4

Is it mandatory on invoice

It indicates if a field is optional or mandatory

5

Technical field specification

It specifies the date format, the maximum length of the field, and decimal places

6

Sample values of the field

Example to familiarize the user

7

Explanatory notes of the field

A detailed explanation of what the file means and the details to be mentioned


Mandatory fields of the e-invoice

Here are the mandatory fields of an invoice as per the notified e-invoice schema in January 2020:

Sl.No.

Name of the field

List of Choices/Specifications/Sample Inputs            Remarks

1

IRN 

Maximum length: 50 

Sample: 649b01ft

A unique reference number for the invoice. The seller may generate it or leave it blank before submitting it to IRP. Should the seller generate IRN, the system will take care of validation and registration against the invoice. If the seller leaves this field blank, the e-invoice system will generate an IRN. The invoice can only be considered valid if it has IRN and is registered on GST

2

Invoice_Type_Code  

Maximum length: 10 


Denotation for regular (Reg), deemed exports (DEXP), sale from the bonded warehouse, SEZ supplies with payment (SEZP), SEZ supplies without payment (SEZWP), export with payment of tax (EXP), and export without payment of tax (EXPWP)

3

Invoice Number

Maximum length: 16 

Sample input: Sa/1/2019   

To identify the invoice uniquely, you require a sequential number within the business context,  operating systems, time frame, and supplier records. You don’t need to use an identification scheme.

4

Invoice Date  (DD/MM/YYYY)

The date of issuance of the invoice

5

Invoice_Period_Start_Date            (DD/MM/YYYY)

Not explained

6

Invoice_Period_End_Date            (DD/MM/YYYY)

Not explained

 

7

Preceeding_Invoice_Reference            

Maximum length:16 

Sample input: Sa/1/2019

Detail of the original invoice being amended by a subsequent document like a credit and debit note. It’s needed to keep future expansion of electronic versions of debit notes, credit notes, and other documents required under GST

8

Preceeding_Invoice_Date            (DD/MM/YYYY)

The date of issuance of the invoice

9

Supplier_Legal_Name   Maximum length: 100

Name as appearing in PAN (Permanent Account Number) of the supplier

10

Supplier_GSTIN           Maximum length: 15

It must be the alphanumeric GSTIN of the supplier raising the e-invoice

11

Supplier_Address1 

Maximum length: 100

Address of the supplier

12

Supplier_State  

Maximum length: 50

State of the supplier

13

Supplier_Pincode 

Maximum length: 6

Pincode of the supplier

14

Billing_Name

Maximum length: 100

The trade name of the buyer to be mentioned here

15

Billing_GSTIN   

Maximum length: 15

The GSTIN of the buyer

16

Billing_POS 

Maximum length: 2

The place of supply state code 

17

Billing_Address1 

Maximum length: 100

The place (district/locality/state) of the buyer on whom the invoice is billed or raised 

18

Billing_State 

Maximum length: 50

State of the buyer

19

Billing_Pincode 

Maximum length: 6

Pincode of the buyer

20

Payee_Name 

Maximum length: 100

The person's name to whom payment is to be made

21

Payer_Financial_Account

Maximum length: 18 

Account number of payee

22

Mode of Payment

Maximum length: 6

Cash/Direct Transfer/Credit

23

Financial_Institution_Branch

Maximum length: 11

IFS Code 

24

Dispatch_From_Details

Information about the location from which goods has been sent out

25

List (items)

Refers to a group of business terms describing the goods and services invoiced

26

Tax_Total 

Decimal (10,2)

When tax currency code is available, there must be two instances of the tax total present, but only one with tax subtotal

27

Paid_amount

Decimal (10,2)

The sum of amounts paid in advance. You must round it up to a maximum of two decimals

28

Amount_due_for_payment Decimal (10,2)

The outstanding amount to be paid. You must round it to a maximum of two decimals

29

Tax_Scheme 

Maximum length: 4

Mandatory element. It usually mentions 'GST.'

30

Shipping_To_Name 

Maximum length: 60

Refers to a group of business terms providing information about the address where goods and services invoiced were or are delivered

31

Shipping_To_GSTIN 

Maximum length: 100

Refers to a group of business terms providing information about the address where goods and services invoiced were or are delivered

32

ShippingTo_Address1   Maximum length: 50

Refers to a group of business terms providing information about the address where goods and services invoiced were or are delivered

33

ShippingTo_Pincode Maximum length: 50

Refers to a group of business terms providing information about the address to which goods and services invoiced were or are delivered.

34

ShippintTo_State 

Maximum length: 100

Refers to a group of business terms providing information about the address to where goods and services invoiced were or are delivered.

35

Subsupply Type 

Maximum length: 2

Refers to a group of business terms providing information about the address where goods and services invoiced were or are delivered.

36

Transaction Mode 

Maximum length: 2

This refers to a group of business terms providing information about the address where goods and services invoiced were or are delivered

37

Company_Name 

Maximum length: 60

The person and address where goods are dispatched

38

Address1 

Maximum length: 100

The person and address where goods are dispatched

39

State 

Maximum length: 2

The detail of the person and address where goods are dispatched

40

Pincode 

Maximum length: 6

It is the detail of the person and address where goods are dispatched

41

SLNO

Integer

Serial Number like 1, 2, 3

42

Quantity 

Decimal (13,3)

The number of items (i.e., goods or services) charged

43

Rate 

Decimal (10,2)

The total number of item units to which the price is applicable

44

Camt

Decimal (11,2)

CGST amount as per item

45

GST Rate

Decimal (3,2) 

The percentage that applies to the invoiced item (the GST rate)

46

Iamt

Decimal (11,2)

IGST amount as per item

47

Assessable Value

Decimal (13,2) 

The unit price (GST excluded) before subtracting item price discount. It can’t be negative

48

Samt

Decimal (11,2)

SGST amount as per item

49

Batch Name 

Maximum length: 20)


It's important to mention batch number details for some manufacturers.

50

Total Invoice Value

Decimal (11,2)

The total cost/amount of the invoice with GST. You must round them to two decimals maximum


More Information About GST E-invoicing in India?

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