GST e-invoice is the intro of the digital billing for products and services supplied by the organization company generated at the government GST portal (https://einvoice1.gst.gov.in/). E-invoicing under GST is a system being introduced to suppress tax evasion and allow an invoicing requirement in India.
The primary goal of e-invoice generation is to examine GST evasion. After the effective rollout of GST, the federal government is now intending towards the anti-evasion procedures to increase income in addition to compliance.
Advantages of GST E-invoicing in India
The advantages of introducing E-invoice generation under GST include:
- Auto-Populated GSTR 1 (for B2B invoices)
- Auto-populated Part A for Eway Bill generation (taxpayer will need to provide car information in Part B to complete EWB generation
- Auto-sharing of uploaded invoices (on IRP) with the buyers for reconciliation.
Applicability of GST E-Invoice System
E-Invoice has actually been introduced in the nation in a phased way based on the Aggregate Annual Turnover of the business.
- The first phase– for companies with turnover more than Rs.500 CR on 1st October 2024.
- The 2nd stage– for business with turnover more than Rs.100 CR on 1st January 2024.
- In 3rd stage E-Invoicing is necessary from 1st April 2024 for entities whose aggregate turnover goes beyond Rs. 50 crore (GST Notification 05/2024- Central Tax)
Section 2( 6) of the CGST Act: “( 6) “aggregate turnover” implies the aggregate worth of all taxable materials (excluding the value of inward materials on which tax is payable by an individual on reverse charge basis), exempt products, exports of goods or services or both and inter-State products of individuals having the exact same Permanent Account Number, to be computed on all India basis but excludes main tax, State tax, Union area tax, integrated tax and cess; “
GST System has also given a center to check the applicability on the E-Invoice Portal ( https://einvoice1.gst.gov.in/)
E-invoice can be generated only by providers. The recipients and transporters can not generate E-Invoice. E-commerce operators can produce e-invoices on behalf of the sellers on their platforms.
E-Invoicing applies just to B2B Business to Business (consisting of B2G– Business to Government) deals.
B2B Supplies consist of
- Domestic supplies along with Exports (consisting of Deemed Exports),
- Supplies to SEZ B2B and
- Supplies through E-commerce Operators
E-invoicing is not required for B2C– Business to Consumer transactions. However, for taxpayers with AATO above Rs 500 Cr, the invoices need to have self-generated QR Code.
Import deals are likewise not covered under E-Invoicing The exclusion from an E-Invoicing
The following entities are omitted from providing e-invoice
- Insurance business
- Banking business
- Financial Institution
- NBFCs
- GTA
- Supplier of guest transportation services
- Supplier of services by method of admission to the exhibition of cinematograph films in multiplex screens
- Special Economic Zones (SEZs) Units (Notified vide Notification No. 13/2024 and 61/2024- Central Tax)
Documents to be reported to GST System under E-Invoicing
- Invoice by Supplier
- Credit Note by Supplier
- Debit Note by Supplier
Bill of Supply, Delivery Challan and Job Work Challan are kept out of the scope of E-Invoicing.
Generating an e-invoice
- Invoice Creation– Invoice is produced using an accounting or billing software.
- Invoice Registration Number (IRN) Generation: Supplier can produce a distinct Invoice Reference Number (IRN) utilizing a basic hash-generation algorithm. Generation of IRN by provider is optional. In absence of IRN, the IRP system of government will produce the same.
- Upload on Invoice Registration Portal (IRP): JSON declare each B2B billing (created through the accounting software or any 3rd party tool), along with the IRN, if generated is uploaded on the Invoice Registration Portal (IRP)
- IRP Validation of Invoice Information: The IRP will confirm the produced hash/IRN attached with JSON (if published by the supplier) or generate an IRN and confirm the file against the central windows registry of GST for any duplication. The IRN will be the special identity of the E-invoice for the whole financial year.
- Digital Signature and QR Code Generation: Upon effective verification, the invoice will be upgraded with IRP’s digital signature on the billing information and a QR code will be contributed to the JSON file.
- E-Invoice information transmission to E-Way Bill Portal and GST System: The uploaded data will be shown the E-way expense system and GST system which will be utilized for auto-population of GST Annexures for GSTR 1.
- E-Invoice Receipt back to Supplier’s accounting system: T he portal will send the digitally signed JSON together with IRN and QR code back to the seller. The invoice will likewise be sent out to the purchaser on their signed up e-mail id.
E-Invoicing is progressively directed by governments throughout the world particularly due to GST evasion.
Tax leak and fraud using fake invoices have actually been an issue the federal government is trying to fight even prior to the GST age. E-invoicing in India is prepared for to put an end to this. Actual time billing reporting prevents subsequent fraudulent changes/adjustments. Blocking the tax leakage, the execution of the e-invoicing under GST will be useful for the taxpayers.
