Everything You Need to Know About E-Invoices Under GST

what is e-invoice under GST

Recently, the GST council declared mandatory e-invoicing for businesses exceeding 5 crore turnover annually. This announcement left the industry baffled because earlier it was mandatory only for large-scale enterprises. Unlike MSMEs and small businesses, they can bear additional compliance costs of e-invoicing but it is pricey for SMEs. If you are also worried about the same then you should read this article to understand the nitty-gritty details of e-invoice under GST

What Is E-Invoice Under GST? 

what is e-invoce?

E-invoice (aka Electronic Invoice) is a system of invoices where it is authenticated electronically by the designated portal for B2B transactions. Once it is authenticated, a unique Invoice Reference Number (IRN) is generated. Also, each invoice is digitally signed and attached with a unique QR code. This whole process is called e-invoicing under GST. 

Need For an E-Invoicing System

Following are the needs of e-invoicing 

  • A standardized e-invoice process makes the sharing of invoices easy 
  • Government agencies can track your transactions 
  • Eliminates manual data entry while filing GST returns 
  • Avoids data discrepancy 

Benefits Of E-Invoice

benefits of e-invoice

The following are the benefits of e-invoicing: 

  • Track your e-invoices in real-time 
  • Enables interoperability across business
  • Assists in data reconciliation and improves accuracy in manual data entry 
  • Makes the tax return process since e-invoices will be auto-populated on tax return forms and e-way-bills 
  • As all the transactions will be available online, so there’s no more need for frequent audits
  • The chances of making fake invoices are minimal 
  • Efficiency tax administration enhances 
  • B2B details will be fetched automatically in the GSTR-1 return when invoices are uploaded. 
  • Reduces the need of reporting the same invoices multiple times

List Of Mandatory Fields For E-Invoice 

Field nameDescription
Document Type CodeEach and every document has a code that has to be specified when asked for
Supplier Legal NameName of the supplier (as per PAN card) 
Supplier GSTINGSTIN of the supplier
Supplier AddressFull address of the supplier 
Supplier PlaceMention the city/village/town of the supplier 
Supplier State CodeSpecify the state code where the supplier is located 
Supplier PincodePin code of supplier 
Document NumberA unique invoice number provided by the business
Document DateThe date on which the invoice is generated 
Recipient Legal NameMention the full name of the recipient (as per PAN card) 
Recipient’s GSTINProvide GSTIN of recipient
Recipient’s AddressProvide the full address of the customer/buyer
Recipient’s State CodeSpecify state code (laid out by governing authority) 
Place of Supply State CodeSpecify the state where the items are to be delivered 
PincodeThe location of the recipient has to be selected.
Recipient PlaceCity/village/town of recipient
Invoice Reference Number or IRNA unique reference number of 64 characters is generated by the GST portal. Suppliers keep this field empty when uploading invoices on the GST portal. 
Shipping To GSTINGSTIN of the entity where the items are to be delivered 
Shipping To State, Pincode, and State CodeSpecify the state and its code along with the pin code where the product is being delivered 
Dispatch From Name, Address, Place, and PincodeName and full address of dispatching entity 
Is ServiceWhether the invoice is for service
Supply Type CodeMention the type of supply and its corresponding code 
Item DescriptionDescription of items mentioned in the invoice 
HSN CodeIt is a coding standard decided by governing authorities for a particular product or service. 
Item PriceThe price of a product before deducting the discount, excluding GST
Assessable ValuePrice of goods/service after subtracting discount, excluding GST
GST RateThe tax rate on specific goods/services mentioned in the invoice
IGST Value, CGST Value, and SGST Value SeparatelyDeclaring taxes on goods/services separately
Total Invoice ValueThe total value of the invoice includes GST.

Sample Of E-Invoice 

sample of e-invoice

All businesses must use the e-invoice format shared by GSTIN. Before uploading the same to the portal, it is necessary to fill in all the mandatory fields and also fill in non-mandatory fields wherever applicable. The following image is the sample format of the e-invoice: 

Regulatory Updates On E-Invoice

In order to allow businesses to get used to with new system of electronic invoicing, the GST council of India introduced e-invoicing in a phased manner. The following are the applicability of e-invoice

The cut-off date for mandatory implementation of e-invoiceBusiness turnover (Annual)
1st October 2020Exceeding 500 crore 
1st January 2021Exceeding 100 crore 
1st April 2021Exceeding 50 crore 
1st April 2022Exceeding 20 crore 
1st October 2022Exceeding 10 crore 
1st January 2023Exceeding 5 crore 

Summing Up 

So this was all about e-invoicing under GST. If you want to further simplify the e-invoicing process, download Munim – a cloud-based accounting software, made in India, made for India. Along with e-invoice generation, you can maintain inventory, sales records, and expenses. In a word, Munim is a one-stop accounting solution for all businesses.  

Frequently Asked Questions On E-Invoicing 

What was the system for issuing invoices before e-invoicing? 

Before e-invoicing, an entity could issue invoices from any third-party software and upload them manually in the GSTR-1 return. Once it was done successfully, the same information would reflect in the GSTR-2A form (which was viewed only form). The transporters were responsible for generating e-way bills from invoices. 

Who is responsible for uploading e-invoices? 

According to e-invoice rules, the seller is responsible for uploading it to the IRP system and getting the QR code and IRN (Invoice Reference Number) in the physical copy of the invoice issued to the recipient. 

Which documents are to be uploaded to the IRP system? 

The following documents are to be uploaded to the IRP system: 
Invoice by Supplier
Credit Note by Supplier
Debit Note by Supplier
Any other document as required by the governing body

What are available options for generating e-invoices? 

There are multiple ways to generate an e-invoice which are as follows: 
Web
API 
SMS 
Mobile 
offline tool 
GSP 

Can we cancel an e-invoice? 

Yes, you can cancel an e-invoice within 24 hours by logging onto IRP. 

How to cancel e-invoices in bulk? 

Following are the steps to cancel e-invoices in bulk: 
Go to the e-invoice portal. Click on ‘Bulk Generation Tool’ 
Download an offline utility named ‘e-invoice Cancel by IRN – JSON Preparation’
Enter the required details such as IRN, Reason for Cancellation, and Remarks and click on ‘Validate’ to check if there are any errors if. 
Click on ‘Prepare JSON once the file is validated. 
Login to the e-invoice portal and open the e-invoice section. Click on ‘Bulk IRN Cancel’ and upload the JSON file.

Is e-invoice mandatory for e-way bills?

Yes, an e-invoice is required to generate an e-way bill, however, an e-invoice is also required to validate the e-way bill at the time of transportation. 

What supplies come under e-invoice currently? 

E-invoice applies to: 
Supplies made to registered persons (B2B) 
Supplies to SEZ (w/o tax payment) 
Exports (w/o tax payment)
Deemed exports

mehul.jagwani

About the author

Mehul is a content writer with a heart of nomad. He is currently working with Munim ERP Pvt. Ltd. as a content writer and he is passionate about Quantum Mechanics, Christopher Nolan's movie and Traveling. His weekends are well spent with his Golden Retriever recharging him with cuddles and strolls.

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