E-Invoicing
Updated: May 16
This post will discuss requirements regarding E-invoicing under GST.
e-Invoicing under GST
For Registered persons whose aggregate turnover (based on PAN) in any preceding financial year from 2017-18 onwards, is more than prescribed limit i.e. Rs. 10 Crores w.e.f. 1st October 2022, e-invoicing is mandatory. With effect from 1st August 2023, e-invoicing will be mandatory for turnover exceeding Rs. 5 Crores.
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GST Registered persons will continue to create their GST invoices on their own Accounting / ERP Systems. These invoices will now be reported to ‘Invoice Registration Portal (IRP)’. On reporting, IRP returns the e-invoice with a unique ‘Invoice Reference Number (IRN)’. Then, the invoice can be issued to the receiver.
In case provisions of e-invoicing is applicable, an invoice without IRN will not be a valid invoice and no input to the buyer shall be available without IRN generation. The aim of this system is seamless flow of information from IRP to GST system to minimize tax evasion through preventing fake invoices, back dating of invoices, enhanced controls, real time MIS reporting etc.
To generate E-invoice, an eligible GST registered user can create a login at E-Invoice portal. The login credentials of E-Invoice portal may also be used at E-way Bill portal for generation of E-way bill. To avoid duplication of efforts, E-way bill can be generated using the system allotted IRN, issued upon generation of e-invoice. The process workflow is as follows:
Ways of generating E-invoice:
Through IRP portal by using offline utility and uploading JSON file on the IRP system
Through Accounting Software such as Tally / Busy etc.
Through API linked software
How to Generate E-invoices on IRP using offline utility
How to Generate E-invoices in Tally
How to generate E-invoices in Busy
How to generate E-invoices in Marg
Frequently asked questions:
Is e-invoice applicable to both goods and services?
Yes, e-invoicing is applicable to both goods and services for suppliers crossing the threshold limit of Rs. 20 crores.
Is e-invoicing applicable to all organizations?
No, while, w.e.f. 1st April 2022, e-invoicing is applicable to entities having turnover more than Rs. 20 Crores, there are certain exemptions given to various types of organizations who are not required to generate e-invoices irrespective of their turnover. These organizations are:
a) Insurance Companies
b) Banking Companies
c) Financial Institutions including NBFC
d) Goods Transport Agency (GTA)
e) Passenger Transport Service Provider
f) Multiplex Halls
g) SEZ units
Is there any minimum threshold for generating e-invoice?
There is no invoice level threshold for generating e-invoice. Every eligible tax payer must generate an e-invoice irrespective of the value of invoice. Without IRN, invoice shall not be a valid invoice.
What all documents are required to be generated using e-invoicing system?
E-invoicing system can be used to generate following documents:
a) B2B Invoices (both forward and reverse charge)
b) Invoices issued to government / government departments
c) Debit notes
d) Credit notes
e) Export Invoices
What all documents are not required to be generated using e-invoicing system?
E-Invoicing system is not applicable to generating following documents:
a) Delivery Challans
b) B2C Invoices (except invoices to Government)
c) Bill of Supply
d) Supply of Nil rated / Exempted Items
e) RCM Invoice generated by recipient of service
Do we need to generate e-way bills when we have already generated e-invoice?
Yes, both e-way bill and e-invoice may be required for the same transaction. E-way bill is an electronic way bill for movement of goods. In most cases, e-way bills are not required to be generated for value less than Rs. 50,000, however, e-invoice is an electronic invoice and needs to be generated for every supply transaction irrespective of whether movement has occurred or not.
If vehicle details are entered while generating e-invoice, e-way bill can be generated using IRN, otherwise Part B of E-way bill is separately required to be filed in.
Is E-way bill required to be generated within specific number of days of generation of e-invoice?
No, there is no prescribed time limit for generation of e-way bill from the date of generation of e-invoice. E-way bill is required for movement of goods.
Is e-invoice required in case of delivery challan?
No, e-invoice is not required in case of delivery challan, however, e-way bill may still be required to be generated for movement of goods.
How to handle sales return in case of e-invoicing?
In case of sales return, a delivery challan would be required to be generated and e-way bill for movement to be generated against the delivery challan.
Additionally, credit note against sales return will be required to be issued using e-invoicing portal.
Is e-invoice required in case of intra-state branch movements, sale on approval basis, job work etc.
No, since intra-state branch movements, sale on approval basis and job work don't fall under the definition of supply under GST, invoice is not required to be generated,
In such circumstances, delivery challan coupled with e-way bill shall be required.
Can e-invoice be cancelled?
Yes, e-invoice can be cancelled within 24 Hrs. of generation of IRN. For cancelling e-invoice, e-way bill needs to be cancelled. 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 will also be updated with such ‘cancelled’ status.
Also, Once an IRN is cancelled, the concerned invoice number cannot be used again to generate another e-invoice/IRN
Can e-invoice be partially cancelled?
No, e-invoice can't be partially cancelled. If required, it has to be cancelled in totality.
Can e-invoice be amended?
No, e-invoice can't be amended. Amendment needs to be filed through amendment facility available in GSTR-1, however, any amendment may be informed to the officer by IRP.
What if e-invoice is required to be cancelled but period of 24 Hrs. from generation of IRN has expired?
E-invoice can't be cancelled post 24 Hrs. If the invoice still needs to be cancelled, it must be cancelled in the GSTR-1 return.
For more FAQs, please refer here.