E-Invoicing under New GST Return System

What is E-Invoicing?

E-invoicing is a new system started by the GST department of central government for electronic authentication of B2B invoices through GST network. Under this new electronic invoicing system, one identification number is allotted by invoice registration portal to each invoice which is managed by GST network (GSTIN). This electronic system updates the invoicing information in real time to both GST & E-way bill portal.

Direct transfer of invoice information from invoice registration portal to GST portal eliminates the manual data filing system of invoices along with ANS1/GST returns and generation of PART-A of the e-way bills. From 1st April 2020, it is mandatory for GST registered persons having an -

1. Aggregate turnover of more than 100 crores to follow this new electronic invoice system.
2. Aggregate turnover of more than 500 crores must have QR code mentioned on B2C invoices.

What are the benefits of Electronic Invoicing?

There are many ways in which electronic invoicing benefits GST registered users –

• It eliminates the manual entering of invoice details on GST returns after fetching it through various GST software’s. It makes your work easier.
• It reduces the data entry errors an individual can make while filling invoicing data.
• Real time tracking of invoices.
• helps in invoicing data to be auto populated from invoice registration portal to GST & E-way bill portal.
• It eliminates fake invoices
• It reduces multiple format reporting
• Generation of E-way bill using E-invoice data
• Creation of E-invoice for debit/credit notes and other eligible documents.

Role of E-invoicing Portal

There are various roles performed by e-invoicing portal which are as follows –

1. Digitally signing of invoices
2. Allotment of unique reference number to each invoice
3. QR code generation
4. Sending of signed e-invoice to the document recipient on the e-mail mentioned on the invoice.

What is QR Code?

QR code is used for quick viewing, validation, accessing of invoices from GST system. QR code is generated by invoice registration portal after uploading the JSON format of invoices.

QR code consists of the following e-invoicing parameters –

• Supplier GSTIN
• Recipient GSTIN
• Date of invoice generation
• Value of invoice
• Unique invoice reference number
• Number of line items
• HSN code of main item having highest taxable value.

Procedure of Generating E-Invoice under GST

The procedure of generating E-invoice under GST is as follows –

Step 1 – Generation of Invoice & JSON Format

• Seller generates the invoice in its own accounting or billing system.
• The invoice generated must follow the standards of E-invoice. Seller should have a feature of generating invoice data in JSON format in its ERP system.
• Those GST registered users who are not using any accounting software or IT tool for generation of invoice must enter the invoice data with the help of offline tool and then submit the same.
• Seller software must generate the final invoice in the JSON format and upload the same on invoice registration portal. Invoice registration portal only takes JSON format unless it will not be uploaded.

Step 2 – Uploading of JSON

• Seller upload the final invoice JSON format into Invoice registration portal (IRP)
• There are various ways to upload JSON format which are as follows –
  1. Direct uploading on IRP
  2. Uploading through GSP’s
  3. Uploading through third party provided apps

Step 3 – IRP Data Validation

• If invoice generation number is generated, invoice registration portal will generate IRN on the basis of JSON from central registry of GST system and make sure that same invoice from the same financial year should not be uploaded again on IRP.
• If Invoice reference number is not generated, then it is generated by invoice registration portal on the basis of JSON format uploaded by the seller.
• After getting confirmation receipt from the central registry, signatures on invoice date & QR code to JSON added by IRP.

Step 4 - E-invoicing Sharing

• E-invoice data along with the invoice registration number shared with the seller.
• Sharing of signed E-invoice data along with IRN to GST & E-way bill portal will also update ANX-1 of seller & ANX-2 of buyer.
• Invoice signed by invoice registration portal is considered as valid Electronic invoice and used by GST/e-way bill system.

Step 5 – Returning of Digitally Signed Copy

• Digitally signed JSON invoice number returned back to the seller along with QR code.
• Finally. The registered invoice will be sent to both buyer & seller on their registered e-mail Id’s as mentioned in the invoice.

Modes of generation of E-invoice under GST

There are various modes of generation of E-invoice available with the taxpayer so that taxpayer can use the best mode as per his/her suitability. The various modes available under the proposed system for E-invoicing through invoice registration portal are as follows –

• Web based mode
• SMS based mode
• API based mode
• Mobile app based mode
• Web based mode
• Offline tool based mode

Mandatory fields of E-Invoicing under GST

E-invoicing should be done as per GST invoicing rules. Certain fields are indicated mandatory and some are optional for the businesses but users can choose to fill the mandatory fields only. The sections & fields of E-Invoice are differentiated between mandatory & optional fields which are as follows –

1. 18 sections (8 Mandatory, 10 Optional)
2. Out of 8 mandatory sections, 34 are mandatory fields whereas 46 are optional
3. Out of 10 optional sections, 35 are optional fields whereas 17 are mandatory

The field names which are mandatory or compulsorily to be filled are invoice type, invoice type code, supplier GSTIN, invoice number, invoice date, preceding invoice reference, GSTIN, reverse charge, place, pin code, state code, unique identification number, supply type, Shipping To_GSTIN, Shipping To_State, transaction mode, quantity, item description, rate, Assessable value, IGST value, CGST value, SGST value, Total invoice value.

How will E-Invoicing Curb Tax Evasion?

It helps in curbing tax evasion in the following ways –

1. Direct access to the transactions in real time for the tax authorities as it is mandatory to generate e-invoice through GST portal.
2. Less scope for invoice manipulation as invoice generation takes place before carrying out transaction.
3. Reduction in counterfeit GST invoices.
4. Claiming of genuine input tax credit through GST portal.
5. Easy GSTN tracking to identify fake tax credit claim by matching input tax credit with output tax details.