GST E-Invoicing

Enterslice offers comprehensive assistance and consulting services for GST e-invoicing implementation. Our team of experts can guide businesses through the entire process, from understanding the requirements and implications of e-invoicing under GST to implementing the necessary technical system. Package inclusion..

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What is GST E-Invoicing

Governments have established the GST e-invoicing system, also known as electronic invoicing, to standardise and streamline the creation, sharing, and reporting of bills for commercial transactions. By guaranteeing that invoices are simple to verify, it aims to streamline tax compliance and lower tax evasion.

Several nations, including India, have embraced e-invoicing under the Goods and Services Tax (GST) system. GST e-invoicing is a process that mandates businesses to create invoices in a specific electronic format in the Indian context. The Invoice Registration Portal (IRP), which creates a distinct Invoice Reference Number (IRN) and a Quick Response (QR) code for each invoice, then authenticates these invoices.

To automate the process of reporting invoice information to the GST portal, India has implemented a GST e-invoicing system. It makes it possible to validate invoice data in real time and fulfil the requirement for manual data entry on the GST portal. The information from an e-invoice is automatically transferred to the GST site when created and authorised, lowering the possibility of errors and increasing efficiency.

Objective

  • 'e-Invoicing' or 'electronic invoicing' is a mechanism in which B2B invoices and other necessary papers are electronically validated by GSTN for usage further on the common GST portal.
  • The GST Council implemented an e-Invoicing system for a select group of users, generally major businesses, at its 35th meeting. Later, it was expanded to include small and medium-sized firms.
  • E-invoicing refers to sending a previously prepared standard invoice on a common e-invoice, not creating invoices on the GST site.
  • Each invoice will receive an identification number under the electronic invoicing system from the Invoice Registration Portal (IRP) run by the GST Network (GSTN).
  • Real-time data transfer occurs from this gateway to the GST and e-way bill portals for all invoice information. As a result, since the data is sent directly from the IRP to the GST site, it eliminates manual data entry for filing GSTR-1 returns and creating part-A of the e-way invoices.

Who must generate the GST e-invoice and it’s Applicability?

Based on their annual revenue and industry classification, specific Indian enterprises are required to generate GST e-invoices:

  • Businesses with a combined annual revenue over 500 crore Indian rupees: Businesses must produce e-invoices if their combined annual revenue, calculated across all of their GSTINs (Goods and Services Tax Identification Numbers), reaches INR 500 crore in any fiscal year starting in 2017–18. The value of all taxable supplies, including exports, exempt supplies, and interstate supplies, determines the turnover threshold.
  • Companies operating in the following industries: Besides the turnover requirements, several industries must produce e-invoices regardless of turnover. The listed industries consist of:
  • Banking, financial institutions, and insurance firms must produce electronic invoices, regardless of annual revenue.
  1. Telecommunications: Regardless of turnover, companies that offer telecommunication services must produce e-invoices.
  2. Railways: The Indian Railways and other organisations providing services to the railways must produce electronic invoices.
  3. Airlines and other aviation-related businesses must produce electronic invoices.
  • Businesses with revenue below the indicated INR 500 crore threshold may freely opt-in and produce e-invoices. Increased compliance and streamlined procedures enable smaller enterprises to utilise the e-invoice system.
  • The government occasionally revise the industry classifications and turnover limits for e-invoice generation.

Who need not comply with GST e-Invoicing?

In India, some companies are excluded from having to use GST e-invoicing. The following business types are exempt from the requirement to use GST e-invoicing:

  • Companies with annual revenue below a certain threshold: Businesses are exempt from the GST e-invoicing requirements if their combined annual revenue, calculated across all of their GSTINs, is less than the set threshold. A total annual turnover of INR 500 crore is required for mandatory e-invoicing. Smaller companies, however, are free to implement e-invoicing voluntarily.
  • Some industries or sectors may still need to be covered by the e-invoicing regulations, even if e-invoicing is currently required for firms in sectors including banking, insurance, telecommunications, railways, and airlines.
  • Special economic zones (SEZs): The e-invoicing requirement does not apply to companies operating in Special Economic Zones (SEZs). SEZs have been set aside with specific tax advantages and incentives to encourage exports and economic expansion. This exemption could change due to governmental laws. Therefore, SEZ companies should monitor any adjustments to the e-invoicing standards.
  • Exporters and companies who provide products or services covered by a Letter of Undertaking (LUT) for export or supplies to Special Economic Zones (SEZs) are exempt from the requirement to use electronic invoicing for such transactions. These transactions must follow different regulatory procedures to enable exports and SEZ supply.
  • As exclusions and standards may vary, staying current with the most recent notices and government policy recommendations about GST e-invoicing compliance is essential. For reliable and current information relevant to your company, consult a tax expert or look to official government sources.

Time limit to generate e-Invoice:

No time limit has been set by the GST systems or the GST law for the generation of e-invoices till April 30, 2023. Taxpayers with Annual Aggregate Turnover (AATO) of INR 100 crore or more must create electronic invoices for tax invoices and credit-debit notes within seven days of the invoice date or be deemed non-compliant starting May 1, 2023.

For the remaining applicable taxpayers, there is no set deadline during which an e-invoice must be generated.

Process of getting an e-invoice

The steps involved in creating or raising an e-invoice are as follows.

  • The taxpayer must see the modified ERP system. At the very least, the CBIC must have informed him of the necessary parameters.Generally speaking, a taxpayer has two possibilities for IRN generation.
    • On the e-invoice portal, the IP address of the computer system can be permitted for direct API integration or integration via GST Suvidha Provider (GSP).
  • To upload invoices end masse, download the generating programme. To produce IRNs in mass, a JSON file can be created and published to the e-invoice gateway.
  • After that, the taxpayer must create a standard invoice for that programme. He must include all pertinent information, including the name and address for the billing address, the supplier's GSTN, the transaction's value, the item's GST rate, the amount of tax due, etc.
  • After selecting one of the alternatives, create the invoice using the appropriate ERP or billing programme. After that, submit the invoice's details, particularly the required fields, to the IRP via a JSON file, an application service provider (app or through GSP), a direct API, or both. The central registrar for e-invoicing and its validation will be the IRP. Other ways to connect with IRP include SMS-based and mobile app-based methods.
  • The B2B invoice's crucial details will be verified by IRP, along with any duplicates, and an invoice reference number (hash) will be generated for future use. IRN is produced using the following four criteria: the seller's GSTIN, the invoice number, the fiscal year and the necessary paper type.
  • IRP creates a QR code in Output JSON for the supplier, generates the invoice reference number (IRN), and digitally signs the invoice. On the other hand, the supply seller will be informed about creating the e-invoice through email.
  • For GST returns, IRP will transmit the authenticated payload to the GST portal. Details will be sent, if necessary, to the e-way bill site. The seller's GSTR-1 is automatically filled out for the applicable tax period. It then establishes the tax obligation.
  • All taxpayers must only record invoices on IRP electronically under the e-invoicing system.

E-invoicing advantages for businesses

By utilising an e-invoice introduced by GSTN, businesses will gain the following advantages:

  • E-invoice closes and plugs a sizable gap in data reconciliation under GST to eliminate mismatch errors.
  • Interoperability and a decrease in data entry errors are made possible by the ability of different applications to read electronic invoices.
  • E-invoice makes it possible to track invoices in real time.
  • The GST return filing process would be backwards integrated and automated; the pertinent information from the invoices will be pre-populated in the various returns, particularly for generating part-A of e-way bills.
  • Increased speed of actual input tax credit availability.
  • The tax authorities conduct audits or surveys because the data they need is available at the transaction level.
  • Access to official credit methods, such as e-invoice discounting or financing, should be quicker and more straightforward, especially for small enterprises.
  • Enhanced customer relationships and expansion opportunities for small firms working with big businesses.

How can electronic invoicing stop tax fraud?

The following approaches will contribute to reducing tax evasion:

  • Since the e-invoice must be mandatorily issued through the GST site, tax authorities will have access to transactions as they occur in real time.
  • Since an invoice is generated before completing a transaction, there will be less opportunity for manipulating the records.
  • As all invoices must be generated through the GST system, it will lessen the likelihood of fraudulent invoices and ensure that only real input tax credits are collected. The ability to correlate input credit information with output tax information makes it simpler for GSTN to identify fraudulent tax credit applications.

What are the mandatory fields of an e-invoice?

The GST invoicing regulations must be primarily followed using E-Invoice. In addition, it should consider the policies or invoicing practices used by each industry or sector in India. For businesses, certain information is required, while the rest is optional. Users can only fill out relevant fields; several fields are also optional. It has also defined each field for interested users and provided sample input. One can observe that several necessary fields from the e-way bill format, like the sub-supply type, are now included in the e-invoice.

Services offered by Enterslice

Enterslice may offer the following services related to GST e-invoicing implementation assistance:

  • Consulting: Enterslice can offer knowledgeable advice and direction on the demands and effects of GST e-invoicing for your company. They can assist you in comprehending the technological considerations, legal requirements, and advantages of putting e-invoicing into practice.
  • Support for Implementation: Enterslice may help you put the processes, software, and infrastructure required to create e-invoices that adhere to GST e-invoicing standards. They can aid in the e-invoicing portal of the government's integration with your current invoicing programme.
  • Training and Awareness: To inform your staff about the importance of e-invoicing, Enterslice may organise training sessions or workshops. This might involve instruction on creating and submitting electronic bills, comprehending invoice reference numbers (IRNs), and adhering to pertinent laws.
  • Enterslice could provide services to ensure your company complies with the GST e-invoicing standards for compliance and auditing. They could help you carry out internal audits to find holes or non-compliance concerns and aid you in fixing them.
  • End to End assistance: For any questions, problems, or adjustments relating to GST e-invoicing, Enterslice may offer continuous help and assistance. They can assist you in keeping abreast of the most recent advancements and modifying your invoicing procedures appropriately.

Frequently Asked Questions

The e-Invoice System allows GST-registered persons to upload all B2B invoices to the Invoice Registration Portal (IRP). The IRP generates and returns a unique Invoice Reference Number (IRN), digitally signed e-invoice and QR code to the user.

Taxpayers could generate e-invoices in real-time or even after a few days or weeks. However, now there is a new restriction; a seven-day time limit for reporting invoices to the IRP. The time limit will apply to e-invoicing-eligible businesses with a turnover of Rs. 100 crore or more from May 1 2023.

Generally speaking, you can send e-invoices in three ways: Via your ERP system if this supports the type of e-invoice you wish to send. Via an online invoice template, you manually enter the information and send the invoice to your customer via a service provider who helps you send your invoices.

The penalty for non-generation of e-invoice is applicable here. The penalty for non-issuance of invoice: 100% of the tax due or INR 10,000 (whichever is higher) will be imposed for each instance of non-compliance. Penalty for incorrect invoice: INR. Twenty-five thousand will be imposed as an e-invoice penalty notification here.

Ten crore up to Rs. 20 crore from October 1 2022. As per the latest e-invoice limit notification 10/2023 dated May 10 2023, the sixth phase applies to businesses with a turnover of more than Rs. 5 crores in FY 2017-18 onwards.

 

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