What is E-invoicing under GST?
‘E-invoicing’ or ‘electronic invoicing’ is a system where in the tax payer will upload his invoice details and register his supply transaction on the Government Invoice Registration Portal (IRP) and get the Invoice Reference Number (IRN) generated by the IRP system.
Here the tax payer will first prepare and generate his invoice using his ERP/accounting system or manually and then upload these invoice details to IRP and get the unique reference number, known as IRN.
What is the turnover threshold for applicability of E-Invoicing?
E invoice was made applicable for businesses with aggregate turnover exceeding Rs. 20 crores in the previous financial year. E invoice is mandatory from 01/04/2022 for business having turnover over 20 crores.
Which categories of persons exempt from e-invoice ?
Notification no. 13/2020- Central Tax dated 21st March 2020, exempted following categories of the person from issuing e-invoice-
A banking company,
A financial institution,
A non-banking financial company (NBFC),
A person engaged in providing passenger transportation service,
A goods transport agency (i.e. GTA) supplying service,
A person engaged in providing services in terms of admission of the exhibition of the cinematograph films in the multiplex screen,
Additionally, vide notification no. 61/2020-Central Tax dated 30th July 2020, the special economic zone unit (SEZ) is also exempted from e-invoice.
Further, as per notification no. 23/2021-Central Tax dated 1st June 2021, a government department and a local authority are also exempted from following e-invoice procedure under GST.
Which transactions are applicable for e invoice ?
1. Taxable B2B supply of Goods & Services
2. Export including: Export of exempt goods, deemed export, Supply to SEZ, Export of services, Etc
3. Inter GSTIN transfers
4. RCM outward supply ( Where you are RCM supplier though you don’t have to pay tax you have to make an E invoice.
Which transactions are not applicable for e invoice ?
1. B2C sales (Separate provision of Dynamic QR code are applicable).
2. Supply of GST exempt products/ Services
3. Intra GSTIN transfer (In same State)
4. High Sea sales
5. Bonded warehouse sales
6. Input service distribution
7. RCM Inward Supply
8. Job Work: Material Sent for or returned after Job work: E invoicing is not applicable. BUT it is applicable to- Job work charges if turnover of job workers crosses the limit.
When E invoice is to be generated ?
1. Future dated E invoices can not be prepared.
2. E Invoice has to be prepared in real time.
3. E invoice has to be prepared before delivery of goods or issue of invoice to recipient.
What documents are presently covered under e -invoicing?
2. Debit note
3. Credit note
It is not applicable to: Delivery challans, RCM self invoices, Receipt for advance payment for service.recipient.
E-invoice vis-à-vis IRN
IRN will be generated for each and every invoice uploaded to the e-invoice portal. IRN is an abbreviation of Invoice Reference Number. Structurally, IRN is a 64 characters long number fixed to each invoice being uploaded to the e-invoice portal. IRN is uniquely generated using the hash generation algorithm.
The formation of 64 characters long number (i.e., IRN) is explained hereunder-
Parts of IRN
Supplier’s GSTIN (i.e., Goods and Services Tax Identification Number).
It is a 15-digit number issued to every GST registered person.
Financial Year (format YYYY-YY) in which the respective invoice is generated.
It represents the type of the document i.e., whether the document is invoice or debit note or credit note. Accordingly, the format used is- INV is used for Invoice; DBN is used for Debit Note; and CBN is used for Credit Note.
This is a number printed on the respective document.
What if when you don't prepare E invoice ?
Where E invoice is applicable and if invoice is issued without generation of E invoice, it will not be treated as invoice at all.
If goods are found moving without E invoice then, they can be detained/ confiscated.
Recipient will not be eligible to claim ITC because he does not possess valid invoice.