By CA Satish Sarda :
There have been so many instances of large scale frauds in GST through fictitious billing, bogus registrations etc. e-Invoicing will play a major role in restricting these frauds to a great extent. E-invoicing has been initiated phase wise. For turnover exceeding Rs 100 crore it has already been made effective. And now w.e.f. April 1, 2021 it has been made mandatory for turnover exceeding Rs 50 crore. So any entity whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds Rs 50 crore would be required to adopt e-Invoicing system. If turnover exceeds Rs 50 crore in current year then e-invoicing will be effective from immediate next financial year. e-Invoicing is nothing but ‘Machine to Machine’ exchange of invoice data. One of the myths among traders is that e-Invoice will replace manual/own system generated invoice, but it is not the case. Entitities will have to prepare invoice manually in own system and upload the same on designated portal Invoice Registration Portal (IRP), which inter-alia will generate Invoice Reference Number (IRN) and quick response code (QR Code).
Aggregate Turnover: Includes taxable supplies, exempt supplies, non–taxable supplies, exports.
1) What is ‘e-Invoicing’? As CGST Rules, notified class of registered persons have to prepare invoice by uploading specified particulars of invoice (in Form GST INV-01) on IRP and obtain an IRN. After following above ‘e-invoicing’ process, the invoice copy containing inter alia, the IRN (with QR Code) issued by the notified supplier to buyer is commonly referred to as ‘e-invoice’ in GST.
2) Advantages of e-Invoice for businesses: Auto-reporting of invoices into GST return, auto-generation of e-waybill, standardisation and inter-operability leading to reduction of disputes among transacting parties, improve payment cycles, reduction of processing costs there by improving business efficiency.
3) What businesses need to do, to be e-Invoice ready? Businesses will continue to issue invoices as they are doing now. Necessary changes on account of e-Invoicing requirement (i.e. to enable reporting of invoices to IRP and obtain IRN), will be made by ERP/accounting and billing software providers in their respective software. They need to get the updated version having this facility. 4) e-Invoicing will cover invoices, GST credit notes, GST debit notes.
5) Supplies presently covered under e-Invoice: Supplies to registered persons (B2B), supplies to Special Economic Zone (with/without payment), exports (with/without payment), deemed exports, by notified class of taxpayers are covered under e-Invoicing.
6) e-Invoicing is not applicable for NIL-rated or wholly-exempt supplies, B2C billing.
7) Entities/sectors exempt from the e-Invoicing mandate: Special Economic Zone (SEZ) units, insurer or a banking company or a financial institution, including NBFC, goods transport agency supplying services in relation to transportation of goods by road in a goods carriage, suppliers of passenger transportations service, suppliers of services by way of admission to exhibition of cinematograph films in multiplex screens.
8) Invoice Registration Portal (IRP): Invoice Registration Portal (IRP) is the website for uploading/reporting of invoices by the notified persons. The first Invoice Registration Portal (IRP) is active and can be accessed at: https://einvoice1.gst.gov.in/. Other portals will be made available in due course.
9) Utility needed to generate an e-Invoice: A system/ utility to report e-invoice details in JSON format to IRP and to receive signed e-invoice in JSON format from the portal.
10) Is invoice number same as Invoice Reference Number (IRN)? No. Invoice no (e.g. ABC/1/2019-20) is assigned by supplier and is internal to business. Its format can differ from business to business and also governed by relevant GST rules. IRN, on other hand, is a unique reference number (hash) generated and returned by IRP, on successful registration of e-Invoice.
11) Where e-Invoicing is applicable, there is no need of issuing invoice copies in triplicate/duplicate.
12) On generation of IRN, will the IRP send or e-mail the e-Invoice to the receiver? No. IRP will not do this. Upon receiving signed JSON from the IRP, it is for the supplier to share the e-invoice (along with QR Code etc.) in agreed format to the receiver.
13) How will the supplier send the e-Invoice to the receiver? A suggested mechanism may be to exchange the PDF of the JSON received from IRP, (including QR code) as the best authenticated version of the e-Invoice for business transactions. However, a mechanism to enable system-to-system exchange of e-invoices through eco- system partners will be made available in due course.
14) Where e-invoicing is applicable, is carrying e-Invoice print during transportation of goods mandatory? No. As per Rule 138A(2) of CGST Rules, where e-invoicing is applicable, the Quick Reference (QR) code having an embedded Invoice Reference Number (IRN) in it, may be produced electronically, for verification by the proper officer, in lieu of the physical copy of such tax invoice.
15) An IRN/invoice reported to IRP cannot be amended but can be cancelled.
16) 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.
17) Whether the e-way bill get auto-generated? In case both Part-A and Part-B of e-way bill are provided while reporting invoice details to IRP, they will be used to generate e-waybill. 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.
18) e-Invoices will get auto populated in GSTR 1 and GSTR 2A returns.
19) For all further details and information on e-Invoicing, please visit the URL: https://einvoice1.gst.gov.in So all those who are in turnover bracket of Rs 50 crore to Rs 100 crore will have to start e-Invoicing w.e.f. April 1, 2021. If they do not do so their invoices will be nil and void and the buyer will not get any Input Tax Credit (ITC). This is another milestone on Goods and Services Tax (GST) roadmap. (The author is Past Chairman of Nagpur Branch of ICAI)