Who is Eligible for E-invoice in GST?

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To Whom is E-invoicing applicable? This is the first question that pops in the mind of every GST registered tax payers.

GST department is planning to implement e-invoicing for all taxpayers irrespective of turnover limit. But it is yet to be finalized by the department. Hence many taxpayers are getting confused with e-invoicing system, .It is important for businesses to know about this e-invoicing system. Today we are going to see what e-invoicing system is all about. E-invoice is a billing system introduced by GST to simplify billing and compliance norms for all related invoice stakeholders.

Under e-invoicing system, the seller as usual raises sale bill using his billing software. Then you need to generate an IRN number (Invoice Reference number) for the said invoice at IRP (Invoice Registration Portal). This IRN number is important for all the respective stake holders like sellers, buyers, supply chain professionals and govt.

What is GST E-Invoice ?

GST council has implemented e-invoicing system to reduce GST tax evasion from taxpayers. GST officers conclude that with mandatory e-invoicing for all sale of goods and services to businesses, tax evasion can be reduced and reporting gets easier for taxpayer and  assessments becomes easy for GST department.

GST e-invoice is not the soft copy of GST bill like PDFs, prepared by business. GST    e-invoice is a digital invoice for goods and services provided by businesses. You can generate the same at GST e-invoice generation portal. Raising GST e-invoice at GST portal is compulsory for certain taxpayers whose turnover exceeds the prescribed govt. limits. It is applicable to only certain taxpayers only at present.

When a taxpayer generates bill on GST e-invoicing portal, an unique number(IRN) is allocated to the e-invoice generated by them. This unique number can be used by all related parties for correlating those respective invoices, sales returns, reconciliations and tax paid verification and so on.

E-invoice can be generated with your billing software and be updated at GST portal with API integration and excel modes. For more details please consult your tax and software professionals.

Applicability of E-Invoicing

To Whom is E-invoicing applicable? This is the first question that pops into the mind of every GST registered tax payers.

E-invoice is being implemented on a phased manner by the GST council. E-Invoicing system is applicable to only for B2B billing only. It is applicable to PanIndia businesses with an aggregate annual turnover above prescribed limit .

Turnover Criteria for E-Invoicing

  • Phase 1 – Aggregate turnover exceeds Rs. 500 Crores-Applicable from 01.10.2020
  • Phase 2 – Aggregate turnover exceeds Rs. 100 Crores-Applicable from 01.01.2021
  • Phase 3 – Aggregate turnover exceeds Rs. 50 Crores-Applicable from 01.04.2021
  • Phase 4 – Aggregate turnover exceeds Rs. 20 Crores-Applicable from 01.04.2022
  • Phase 5 – Aggregate turnover exceeds Rs. 10 Crores-Applicable from 01.10.2022

Tax payers must mandatorily shift to e-invoicing in FY 2022-23 and onwards if their turnover exceeds specific limit from FY 2017-18 TO FY 2021-22 as per government notifications. Moreover, aggregate turnover means it covers all GSTINs under a single PAN across India.

To Whom E-Invoicing is not applicable

Irrespective of turnover limit, e-invoicing is not applicable to the following registered tax persons.GST e-invoicing is not applicable to sectors like

  1. Passenger transport services,
  2. Insurance or banking company nbfc or financial institution,
  3. SEZ units,
  4. A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services
  5. Goods transport dealer by road gta
  6. Govt. Department or local authority as per cbic notification
  7. Persons registered in terms of rule 14 of cgst rules (oidar)

CBIC has clarified that e-invoicing exemptions applies to the entity as whole. It is not restricted by nature of supply of the entity.

What are the Mandatory details required for e-invoicing?

E-invoices need to adhere to GST billing rules. Moreover they need to also comply with billing rules and policies of respective business sectors too. Some details are mandatory while few are optional.

The following is the list of mandatory fields in GST e-invoice:

  • Supplier details like GSTIN, address and contact details
  • Buyers details like GSTIN, address and contact details
  • IRN number.
  • Item description, price, assessable value and GST rate and value
  • Assessable value and total invoice value
  • HSN code
  • Shipping  details

Can you cancel GST e-invoice?

Yes. You can cancel GST e-invoice wholly/fully. But you cannot cancel e-invoice partially. The cancellation of invoice must be intimated to IRN within 24 hours. In case you want to cancel the invoice after 24 hours, the same can be done manually at GST portal. But the same has to be done before filing GST returns for the period.

Is there any standard format of e-invoice?

All businesses in India need to adhered to standard e-invoice format given by GST department pertaining to their business sector. Each and every taxpayer must follow the single format given by the department.

Present invoicing Vs. E-invoicing

At present bills are prepared by the suppliers through their own billing softwares. E-way bills are generated at GST e-way bill portal. GSTR returns are filed. There are lot of errors in submitting details. Many taxpayers are not able to claim input tax credit due to mismatch and wrong inputs during filing. Tracking and tracing of goods is still a mountain task for the government department. Tax evasion is still a major problem for the government with current invoicing system.

WHEREAS, under e-invoicing system, seller need to just prepare B2B sale bill and generates IRN at IRP portal. The e-invoice automatically gets reflected in respective GSTRs of buyer and seller. No invoice mismatch or errors in invoice. The buyers can easily claim input tax credit. No need for the buyer to keep GSTR return filing of seller. Its’ easy for the government to keep track of movement of consignment & product, frequent route of consignment, product movement, and other factors.

No doubt GST e-invoicing is beneficial to all the stake holders.

Bottom Line

It is advisable to seek professional advice to find out your applicability. Tax and software professionals can integrate your normal billing with GST e-invoicing. Talk to them today. E-invoice can be generated with your billing software and be updated at GST portal with API integration and excel modes. For more details please consult your tax and software professionals.