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What is ‘e-invoicing’?
‘e-invoicing’ doesn’t mean generation of invoice by a Government portal.
Notified class of registered persons have to prepare invoice by uploading specified particulars of invoice (in FORM GST INV-01) on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN).
e-Invoicing was introduced aiming at machine-readability and uniform interpretation. To ensure this complete ‘inter-operability’ of e-invoices across the entire GST eco-system, an invoice standard is a must. By this, e-invoices generated by one software can be read by any other software, thereby eliminating the need of fresh/manual data entry.
Applicability
1st Oct 2020 – Aggregate T/o > INR 500 Crores in any preceding financial year from 2017-18 onwards
1st Jan 2021 – Aggregate T/o > INR 100 Crores in any preceding financial year from 2017-18 onwards
1st Apr 2021 – Aggregate T/o > INR 50 Crores in any preceding financial year from 2017-18 onwards
e-invoicing doesn’t apply in B2C transactions (i.e. supply of goods or services or both to an unregistered person)
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Non-Applicability
e-invoice doesn’t apply to the following category of persons irrespective of their turnover-
1. Special Economic Zone units (not SEZ Developers),
2. An insurer,
3. An NBFC,
4. A Goods Transport Agency,
5. A banking company,
6. A financial institution,
7. A person supplying passenger transportation services,
8. A person supplying services of admission to the exhibition of the cinematographic films in multiplex services.
e-invoicing is also not applicable on Import of goods/ services, ISD invoices, Nil-rated/ wholly exempt supplies.
Note:- e-invoicing apply to RCM transactions as well
What documents are presently covered under e -invoicing?
i. Invoices
ii. Credit Notes
iii. Debit Notes
What supplies are presently covered under e -invoice?
• B2Bsupplies (includes supplies under same PAN),
• Supplies to SEZs (with/without payment)
• Exports (with/without payment)
• Deemed Exports
by notified class of taxpayers are currently covered under e-invoicing.
What are the benefits of e-invoicing?
1. One-time reporting of B2B invoices while generation, which reduces reporting in multiple formats.
2. Most of the data in form GSTR-1 can be kept ready for filing while using e-invoicing system.
3. E-way bills can also be generated easily using e-Invoice data.
4. There is minimal need for data reconciliation between the books and GST returns filed.
5. Real-time tracking of invoices prepared by a supplier can be enabled, along with the faster availability of input tax credit. It will also reduce input tax credit verification issues.
6. Better management and automation of the tax-filing process.
7. Reduction in the number of frauds as the tax authorities will also have access to data in real-time.
8. Elimination of fake GST invoices getting generated.