E-Invoice is a new concept in the history of India. As the name suggests, E-Invoice is an invoice generated through an electronic system. It is a manner of issuing an invoice like earlier manners of manual invoices, digital invoices and now it is an “electronic invoice”.
As per law, notified registered persons shall prepare their sale Invoices after uploading information on a government designated web portal and get the Invoice reference number (IRN). Invoices generated from personal softwares or manual billing are no more valid under law unless it contains IRN.
Concept of E-Invoice was brought in through CGST Rules vide Notification No. 68/2019 dated 13/12/2019. Rule 48 (Manner of Issuing an Invoice) was amended by inserting three sub-rules i.e. sub-rule (4), sub-rule (5) and sub-rule (6).
Sub-rule (4) provides that, “The invoice shall be prepared by such class of registered persons as may be notified by the Government, on the recommendations of the Council, by including such particulars contained in FORM GST INV-01 after obtaining an Invoice Reference Number by uploading information contained therein on the Common Goods and Services Tax Electronic Portal in such manner and subject to such conditions and restrictions as may be specified in the notification.
Further, sub-rule (5) provides that every invoice other than “E-Invoice (INV-01)” shall not be treated as a valid Invoice.
Sub-rule (6) is just a saviour rule that where invoice is prepared in the manner given in sub-rule (4), there is no need to follow the manner given in sub-rules (1) and (2).
Basics about IRN
IRN is a unique 64-character hash, e.g. 35054cc24d97033afc24f49ec4444dbab81f542c555f9d30359dc75794e06bbe.
IRN generated from portal is a 64 character code as per above along with QR Code and an Acknowledgment Number.
To generate IRN, only JSON format file can be uploaded on portal. The portal after validation, will generate IRN. The portal will return the JSON file only. This JSON will be signed by portal along with IRN details QR Code and Acknowledgment Number embedded in it.
On receipt of signed JSON, it is for the respective ERP or Accounting & Billing software system to generate PDF, if needed.
Signed JSON will not be available for download from IRP or GST System as signed e-invoice later. Hence, it is advisable to properly store the signed e-invoice received from IRP.
Validation of Invoice by Portal (Invoice Registration Portal-IRP)
Portal will check whether the invoice was already reported and existing in the GST System. (This validation is based on the combination of Supplier’s GSTIN-InvoiceNumber-TypeOfDocument-Fin.Year, which is also used for generation of IRN).
In case the same invoice (document) has already been reported earlier, it will be rejected by IRP.
Certain other key validations will also be performed on portal. In case of failure, registration of invoice won’t be successful, IRN won’t be generated and invoice will be rejected along with relevant error codes. In case of rejection, error code will be generated which will give idea about reason for rejection.
Amendment and Cancellation of IRN
Can I amend details of a reported invoice for which IRN has already been generated?
Amendments are not possible on IRP. Any changes in the invoice details reported to IRP can be carried out on GST portal (while filing GSTR-1). In case GSTR1 has already been filed, then using the mechanism of amendment as provided under GST. However, these changes will be flagged to proper officer for information.
Can an IRN/invoice reported to IRP be cancelled?
Yes. The cancellation request can be triggered through ‘Cancel API’ within 24 hours from the time of reporting invoice to IRP. However, if the connected e-way bill is active or verified by officer during transit, cancellation of IRN will not be permitted.
In case of cancellation of IRN, GSTR-1 also will be updated with such ‘cancelled’ status.
Can a cancelled e-invoice number be used again?
No. Once an IRN is cancelled, the concerned invoice number cannot be used again to generate another e-invoice/IRN. In case, it is used again then the same will be rejected by IRP when it is uploaded on IRP. This is because IRN is a unique string based on Supplier’s GSTIN, Document Number, Type of Document & Financial Year.
Can I partially cancel a reported invoice?
No. It has to be cancelled in toto. No partial cancellation of reported e-invoice allowed. Cancellation of invoices is governed by Accounting Standards and any other applicable rules/regulations.
Notified Class of Registered Persons
W.E.F. 01/04/2022, New provisions notified for applicability of E-Invoice vide CGST Notification 01/2022 dated 24/02/2022. As per these provisions, any person whose aggregate turnover, in any preceding financial year (from 2017-18 onwards), exceeds Rs 20 Crore, shall comply with the provisions of E-Invoicing from 1st April 2022 onwards.
W.E.F. 01/04/2021, New provisions notified for applicability of E-Invoice vide CGST Notification 05/2021 dated 08/03/2021. As per these provisions, any person whose aggregate turnover, in any preceding financial year (from 2017-18 onwards), exceeds Rs 50 Crore, shall comply with the provisions of E-Invoicing from 1st April 2021 onwards.
Intially, the registered persons whose aggregate turnover in a financial year exceeds one hundred crore rupees (Rs 100 Crore) were notified as registered persons who shall prepare E-Invoice as per Rule 48(4) of CGST Rules.
However, on 30th July 2020, CBIC through notification No. 61/2020, raised the said limit from Rs 100 Crore to Rs 500 Crore. So, w.e.f. 1st October 2020, only those registered persons, whose aggregate turnover, in any preceding financial year (from 2017-18 onwards), exceeds Rs 500 Crore, shall comply with the provisions of E-Invoicing.
The provisions were again amended and notified w.e.f. 1st January 2021 for applicability of E-Invoice. As per these provisions, any person whose aggregate turnover, in any preceding financial year (from 2017-18 onwards), exceeds Rs 100 Crore, shall comply with the provisions of E-Invoicing from 1st January 2021 onwards. {Refer CGST N/N 88/2020}
For Financial Year 2017-18, aggregate turnover shall be considered w.e.f. 01st July 2017 onwards.
Followings are the persons exempt from compliance of provisions of E-Invoice
- SEZ units
- Where supplier of services is an:-
- Insurer
- Banking Company
- Financial Institution
- Non-Banking Financial Company (NBFC)
- Goods Transport Agency
- Passenger Transport Service Provider
- Person supplying services by way of admission to exhibition of cinematograph films in multiplex screens
Effective date of Applicability of E-Invoice
Initially, it was proposed to applicable from Ist April 2020. However, due to Corona pandemic, it was deffered to Ist October 2020.
Now, effectively, E-Invoice is applicable w.e.f. 1st October 2020 subject to initial relaxations (given below).
Type of Supplies where E-Invoice required
E-Invoice is required only for following outward supplies :-
- Supply of Goods or Services or Both to a registered person; or
- Export of goods or services.
- Supplies to SEZs
- Deemed Exports
So, as of now, there is no need to generate E-invoice for any supply made to unregistered person.
Documents covered under e-invoicing
- Invoices
- Credit Notes
- Debit Notes
Initial Relaxations for Application of provisions
As the concept of E-Invoice is a new one, government has provided some relaxation for application of E-Invoice.
As per Notification No. 73/2020, a registered person may prepare the invoice as per earlier provisions. However, he shall upload the information of such invoice within 30 days on the web portal and get the Invoice Reference number (IRN) for the same.
This relaxation is applicable only for invoices issued within the period from 1st October 2020 to 31st October 2020.
Further, this relaxation is applicable in respect of Tax Invoice only.
Designated Web Portal for E-Invoice
For generation of E-Invoice and other related activities, the designated web portal is https://einvoice1.gst.gov.in/
E-Invoice with E-way Bill
With the introduction of e-invoicing, is e-way bill still compulsory?
Yes. While transporting goods, wherever the e-way bill is needed, the requirement continues to be mandatory.
Will the e-invoice details be pushed to GST System? Will they populate the return?
Yes, On successful reporting of invoice details to IRP, the invoice data (payload) including IRN, will be saved in GST System. The GST system will auto-populate them into GSTR-1 of the supplier and GSTR-2A of respective receivers.
With source marked as ‘e-invoice’, IRN and IRN date will also be shown in GSTR1 and GSTR2A.
Whether the e-way bill get auto-generated?
In case both Part-A and Part-B of e-way bill are provided in the e-invoice schema, the details will be used to generate e-way bill.
In case Part-B details are not provided at the time of reporting invoice to IRP, the same will have to be provided by the user through ‘e-way bill’ tab in IRP log in or e-Way Bill Portal, so as to generate e-way bill.
Advisories from GST/E-Invoice Web Portal
GST Portal has issued numerous advisories in relation to portal activities and updates for E-Invoice. Followings is the summary of relevant advisories:-
Update regarding enabling on e-invoice portal
- As a facilitation measure, all the taxpayers who were having aggregate turnover of Rs. 500 Cr. (from 2017-18 onwards) were enabled on e-invoice portal. The listing is based on GSTR-3B data, as available in GST System.
- One can search the status of enablement of a GSTIN on e-invoice portal under “Search > e-invoice status of taxpayer”.
- In case any registered person, is required to prepare invoice in terms of Rule 48(4) but not enabled on the portal, they may request forenablement on portal: ‘Registration -> e-Invoice Enablement’
- In case any registered person, who doesn’t have the requirement to prepare invoice in terms of Rule 48(4) but still enabled on the e-invoice portal, the same may be brought to the notice at (mailto:support.einv.api@gov.in) so that necessary action can be taken.
‘Verify e-invoice’ Mobile app
‘Verify e-invoice’ Mobile app is released for verification of authenticity of e-invoice (QR code/IRN).
Source:-
CGST Notification No. 68/2019
CGST Notification No. 70/2019
CGST Notification No. 13/2020
CGST Notification No. 61/2020
CGST Notification No. 70/2020
CGST Notification No. 73/2020
CGST Notification No. 88/2020
CGST Notification No. 05/2021
CGST Notification 01/2022 dated 24/02/2022
FAQs
Certail FAQs are being issued in relation to E-Invoice by GSTN. Followings are some important points extracted from these FAQs:-
Advantages of e-invoice for businesses
e-invoice has many advantages for businesses such as Auto-reporting of invoices into GST return, auto-generation of e-way bill (where required).
e-invoicing will also facilitate standardisation and inter-operability leading to reduction of disputes among transacting parties, improve payment cycles, reduction of processing costs and thereby greatly improving overall business efficiency.
SEZ unit having DTA unit
There is an SEZ unit and a regular DTA unit under same legal entity (i.e. having same PAN). The aggregate total turnover of the legal entity is more than Rs. 500 Crores (considering both the GSTINs). However, the turnover of DTA unit is below Rs. 100 crores for FY 19-20. In this scenario, as SEZ unit is exempt from e-invoicing, whether e-invoicing will be applicable to DTA Unit?
Yes, because the aggregate turnover of the legal entity in this case is > Rs. 500 Crores. The eligibility is based on aggregate annual turnover on the common PAN.
Whether e-invoicing is applicable for supplies involving Reverse Charge?
If the invoice issued by notified person is in respect of supplies made by him but attracting reverse charge under Section 9(3), e-invoicing is applicable.
For example, a taxpayer (say Goods Transport Agency or a Firm of Advocates having aggregate turnover in a FY is more than Rs. 500 Cr.) is supplying services to a company (who will be discharging tax liability as recipient under RCM), such invoices have to be reported by the notified person to IRP.
On the other hand, where supplies are received by notified person from (i) an unregistered person (attracting reverse charge under Section 9(4)) or (ii) through import of services, e-invoicing doesn’t arise / not applicable.
Is e-invoicing voluntary, i.e. can entities with aggregate turnover < Rs. 500 Cr. also report invoices to IRP, if they wish to do so?
No, presently, only the notified class of persons will be allowed/enabled to report invoices to IRP.
Is there any time window within which I need to report an invoice to IRP, i.e. is there any validation to the effect that the ‘document date’ (in the payload to IRP) has to be within a specified time window, for reporting to IRP/generation of IRN?
No such validation is kept presently
Is the signature (DSC) of supplier mandatory while reporting e-invoice to IRP?
No, DSC not required.
Can e-commerce operators generate e-invoices on behalf of the sellers on their platforms?
Yes, if such suppliers, selling through e-Commerce entity are otherwise notified persons and supposed to report invoices under Rule 48(4).
Will I need to enter invoice details on a government website and obtain IRN?
- In e-invoice scenario, what is primarily envisaged is ‘machine-to-machine’ exchange of invoice data (mainly between taxpayer’s system & IRP).
- Use Offline Tool to enter data and create JSON file to be uploaded on the IRP if you are not using any ERP/Accounting/Billing Software and have very few invoices to report.
- Soon, mobile app-based tool will be made available for such taxpayers.
Will IRP store/archive e-invoices?
No. IRP will only be a pass-through portal which performs prescribed validations on invoice data and generates IRN. It will not store or archive e-invoice data.
Will there be different invoice schema for different sectors/businesses, e.g. Traders, Manufacturers, Service Providers, Professionals etc.?
No. e-invoice schema is a single standard applicable to all businesses in the country. Many optional fields are available in the schema to cater to the requirements of specific businesses and practices followed by industry and trade in India.
Can the supplier place their entity logo on e-invoice? Is this part of schema?
Elements of invoice which are internal to business, such as company logo etc. are not part of e-invoice schema. After reporting invoice details to IRP and receipt of IRN, at the time of issuing invoice to receiver (e.g. generating as PDF and printing as paper copy or forwarding via e-mail etc.), any further customisation, i.e. insertion of company logo, additional text etc., can be made by respective ERP/billing/accounting software providers.
What is the maximum number of line items which can be reported in an invoice?
The limit is kept at 1000 presently. It will be enhanced based on requirement in future.
Taxpayers who are required to report more than 1000 line items may contact NIC (support.einv.api@gov.in) with few sample invoices having more than 1000 line items, so that necessary enablement can be made.
In the e-invoice schema, the amount under ‘other charges (item level)’ is not part of taxable value. However, some charges to be shown in invoice are leviable to GST. How to mention them?
Such other charges (taxable), e.g. freight, insurance, packing & forwarding charges, amortization charges etc. may be added as one more line item in the invoice.
In e-invoice schema, there is no placeholder for mentioning TCS (Tax Collected at Source) collected by suppliers under Income Tax Act, 1961.
At present, there is no separate placeholder for this field in schema and including it in schema will be examined in next round of revision.
However, as a work around, the field of “Other Charges (Invoice Level)” can be used to mention TCS where it doesn’t form part of taxable value.
It may further be noted that INV-01 schema is only to report specified invoice particulars to IRP and once IRN is obtained from the portal, the business may add any other elements/ charges not relevant to e-invoice reporting, while issuing invoice finally to buyer.
In the current schema, there is no provision to report details of supplies not covered under GST, e.g. a hotel wants to give single invoice for a B2B supply where the supply includes food and beverages (leviable to GST) and Alcoholic beverages (outside GST).
For items outside GST levy, separate invoice may be given by such businesses.
The field “Differential Percentage” of tax rate is not available in schema, which is applicable on “Leasing of vehicles purchased and leased prior to July 1, 2017”.
This is not relevant/applicable after 30.06.2020
In case of Credit Note and Debit Note, is there any validation w.r.t referred invoice number?
No linkage with invoice is built, in view of the amended provisions of GST.
If e-invoice is applicable and issued, am I supposed to issue copies of invoice in triplicate/duplicate?
Where e-invoicing is applicable, there is no need of issuing invoice copies in triplicate/duplicate. This is clearly specified in Rule 48(6).
What data is embedded in QR Code?
The QR code will consist of the following key particulars of e-invoice:
a. GSTIN of Supplier
b. GSTIN of Recipient
c. Invoice number, as given by Supplier
d. Date of generation of invoice
e. Invoice value (taxable value and gross tax)
f. Number of line items
g. HSN Code of main item (line item having highest taxable value)
h. Unique IRN (Invoice Reference Number/hash)
i. IRN Generation Date
Is it possible to have more than one QR code on an invoice?
Yes. Apart from the QR code relating to IRN, the supplier is free to place any other QR Code which is required as per business needs or otherwise mandated by any other statutory requirement. In such cases, the QR Codes need to be marked clearly so that they can be distinguished easily.
