What is e-invoicing under GST?
What is e-Invoicing Under GST? e-Invoicing under the Goods and Services Tax (GST) regime is a system where Business-to-Business (B2B) invoices and certain other documents are electronically authenticated by the GSTN (Goods and Services Tax Network) for subsequent use on the common GST portal.
What is e-Invoicing Under GST? The decision to implement e-Invoicing was made during the 35th meeting of the GST Council, initially targeting specific categories of entities, primarily large enterprises. However, the scope has since been expanded to include medium and small-sized businesses as well.
What is e-Invoicing Under GST? It’s important to note that e-Invoicing doesn’t involve generating invoices directly on the GST portal. Instead, it involves submitting already generated standard invoices on a designated e-Invoice portal. What is e-Invoicing Under GST? This process streamlines reporting requirements by inputting invoice details only once. The Central Board of Indirect Taxes and Customs (CBIC) specified a list of common portals for preparing e-Invoices through Notification No.69/2019 – Central Tax.
What is e-Invoicing Under GST? Under this system, each invoice is assigned a unique identification number by the Invoice Registration Portal (IRP), managed by GSTN. The first IRP was launched by the National Informatics Centre at invoice.gst.gov.in.
All invoice data is transmitted from the IRP to both the GST portal and the e-way bill portal in real-time. What is e-Invoicing Under GST? This eliminates the need for manual data entry when filing GSTR-1 returns and generating part-A of e-way bills, as the information is directly related by the IRP to the GST portal.
The applicability of e-Invoicing is determined based on turnover criteria, which are outlined as follows:
| Phase | Applicable to taxpayers having an aggregate turnover of more than | Applicable date | Notification number |
| I | Rs 500 crore | 01.10.2020 | 61/2020 – Central Tax and 70/2020 – Central Tax |
| II | Rs 100 crore | 01.01.2021 | 88/2020 – Central Tax |
| III | Rs 50 crore | 01.04.2021 | 5/2021 – Central Tax |
| IV | Rs 20 crore | 01.04.2022 | 1/2022 – Central Tax |
| V | Rs 10 crore | 01.10.2022 | 17/2022 – Central Tax |
| VI | Rs 5 crore | 01.08.2023 | 10/2023 – Central Tax |
What is e-Invoicing Under GST? Taxpayers are required to comply with e-Invoicing in the fiscal year 2022-23 onwards if their turnover exceeds the specified limit in any financial year from 2017-18 to 2021-22. It’s important to note that the aggregate turnover includes the turnover of all GSTINs under a single PAN across India . What is e-Invoicing Under GST? If the turnover in the last fiscal year was below the threshold limit but increased beyond the threshold limit in the current year, then e-Invoicing would apply from the beginning of the next financial year, i.e., fiscal year 2023-24.
Transactions and documents criteria
What is e-Invoicing Under GST? The applicability of e-Invoicing can also be determined based on certain transaction and document criteria. Here’s how it works:
- Type of Transactions: e-Invoicing applies to Business-to-Business (B2B) transactions primarily. This means that invoices generated for transactions between two registered businesses fall under the purview of e-Invoicing.
- Type of Documents: What is e-Invoicing Under GST? Apart from invoices, certain other documents are also subject to e-Invoicing. These include documents such as credit notes, debit notes, and any other document as notified by the government.
- Turnover Threshold: While the turnover criteria determine when a business needs to comply with e-Invoicing, it’s essential to note that the threshold applies to the aggregate turnover of the taxpayer. This encompasses the turnover of all GSTINs under a single PAN across India.
- Threshold Compliance: If a taxpayer’s turnover exceeds the specified threshold limit in any financial year from 2017-18 to 2021-22, they are required to comply with e-Invoicing from the following financial year. For instance, if the turnover surpasses the threshold in the financial year 2022-23, e-Invoicing compliance starts from the fiscal year 2023-24.
Who need not comply with e-Invoicing?
Certain categories of registered persons are exempt from complying with e-Invoicing requirements, regardless of their turnover. What is e-Invoicing Under GST? These exemptions are outlined in CBIC Notification No.13/2020 – Central Tax, and subsequent amendments. The exempted entities and their corresponding documents and transactions are as follows:
Exempted Businesses:
- Insurers, banking companies, financial institutions (including NBFCs)
- Goods Transport Agencies (GTAs)
- Registered persons providing passenger transportation services
- Registered persons providing services related to the exhibition of cinematographic films in multiplexes
- Special Economic Zone (SEZ) units (excluded via CBIC Notification No. 61/2020 – Central Tax)
Government departments and local authorities (excluded via CBIC Notification No. 23/2021 – Central Tax)
- Persons registered under Rule 14 of the CGST Rules (Online Information and Database Access or Retrieval Services – OIDAR)
Exempted Documents:
- Delivery challans
- Bill of supply
- Financial or commercial credit note or debit note
- Bill of entry
- ISD invoices
Exempted Transactions:
- Business-to-Consumers (B2C) sales
- Nil-rated or non-taxable or exempt Business-to-Business (B2B) sale of goods or services
- Nil-rated or non-taxable or exempt Business-to-Government (B2G) sale of goods or services
- Imports
- High sea sales and bonded warehouse sales
- Free Trade & Warehousing Zones (FTWZ)
- Supplies under reverse charge covered by Section 9(4) of the CGST Act
Systems before & after e-invoicing
What is e-Invoicing Under GST? Before the implementation of e-Invoicing, businesses utilised various software to generate invoices, and the details of these invoices were manually uploaded in the GSTR-1 return or through Enterprise Resource Planning (ERP) systems.
Upon filing the GSTR-1 by the suppliers, the invoice information would be reflected in GSTR-2B for the recipients. What is e-Invoicing Under GST? Additionally, consignors or transporters had to generate e-way bills by manually importing the invoices in Excel or JSON format or through ERP systems.
What is e-Invoicing Under GST? With the introduction of the e-Invoicing system, the process of generating and uploading invoice details remains largely unchanged. Invoices can still be imported using Excel tools/JSON or via Application Programming Interface (API) integration, either directly or through a GST Suvidha Provider (GSP). The e-Invoicing system serves as the primary tool for facilitating this process.
Time limit to generate e-Invoice
What is e-Invoicing Under GST? Regarding the time limit for generating e-Invoices, until April 30, 2023, there was no specific time limit set by the GST systems or laws. However, from May 1, 2023, onwards, taxpayers with Annual Aggregate Turnover (AATO) equal to or more than INR 100 crore are required to generate e-Invoices for tax invoices and credit-debit notes within 7 days of the invoice date. Failure to comply with this deadline would render such invoices and credit-debit notes non-compliant.
What is e-Invoicing Under GST? For other applicable taxpayers, there is no specific time limit set for generating e-Invoices. However, it is recommended that they generate e-Invoices at least a week before filing their GSTR-1 returns. This is because it typically takes T+3 days for the details of e-Invoices to be automatically populated into the GSTR-1 form.
What is e-Invoicing Under GST? It’s worth noting that on May 6, 2023, the department deferred the time limit of 7 days to report old e-Invoices on the Invoice Registration Portal (IRP) portals by three months. The department has not yet announced the new implementation date.
Conclusion
What is e-Invoicing Under GST? e-Invoicing represents a significant paradigm shift in the realm of tax compliance, heralding a new era of digitalization and transparency. While its implementation may pose challenges for businesses, the long-term benefits in terms of efficiency, accuracy, and compliance far outweigh the initial hurdles. What is e-Invoicing Under GST? As India marches towards a digital economy, embracing technologies like e-Invoicing will be instrumental in driving growth, fostering trust, and ensuring tax compliance across the ecosystem.
What is e-Invoicing Under GST? In conclusion, businesses must proactively adapt to the changing regulatory landscape, harnessing the power of e-Invoicing to optimise operations, mitigate risks, and stay ahead in an increasingly competitive marketplace.
SOURCES: https://einvoice1.gst.gov.in/#:~:text=The%20e%2DInvoice%20System%20is,QR%20code%20to%20the%20user.
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