The e-invoicing system under GST will be mandatory for taxpayers with a turnover exceeding Rs. 10 crores from 1st October 2022. This means that such taxpayers will have to generate and report invoices in the prescribed e-invoicing format, which will be validated by the Invoice Registration Portal (IRP) before being sent to the GSTN for further processing.
The e-invoicing system is aimed at enhancing the ease of doing business and curbing tax evasion by ensuring the accuracy and authenticity of invoices. It is expected to streamline the invoicing process and reduce the compliance burden on businesses.
Under the e-invoicing system, businesses will have to generate a standard invoice format called the Invoice Reference Number (IRN) from the IRP. The IRN will contain a unique identification number, and other details of the invoice such as the supplier's GSTIN, the buyer's GSTIN, invoice date, invoice value, etc.
Businesses will have to integrate their invoicing systems with the IRP to generate the IRN, and also update their accounting systems to ensure that the details in the e-invoice are accurately reflected in their books of accounts.
It is important for businesses to be aware of the new e-invoicing system and prepare for its implementation in advance to avoid any compliance issues.
Under the GST e-invoicing system, businesses are required to generate e-invoices in the standard format and register them on the Invoice Registration Portal (IRP) for validation and approval. The following is the process for generating e-invoices under the GST e-invoicing system:
1. The business generates the invoice in its accounting or billing software as per the standard e-invoicing schema and adds the mandatory fields required by the e-invoicing system, such as the IRN, QR code, and other details.
2. The business then uploads the e-invoice to the IRP either through the API or the web-based interface of the IRP.
3. The IRP validates the e-invoice and returns an IRN to the business, along with a QR code that contains key invoice details.
4. The business includes the IRN and QR code on the invoice and shares the invoice with the recipient.
5. The recipient can then view and download the invoice details from the Invoice Reference Number (IRN) portal, which is a central government repository of all e-invoices generated under the GST e-invoicing system.
6. By following this process, businesses can generate e-invoices that are compliant with the e-invoicing system under GST and avoid penalties for non-compliance.
The e-invoicing system under GST was implemented in phases, with different thresholds and dates for different categories of taxpayers. Here are the key implementation dates:
1. From October 1, 2020: Businesses with an aggregate turnover of more than Rs. 500 crore were required to generate e-invoices.
2. From January 1, 2021: Businesses with an aggregate turnover of more than Rs. 100 crore were required to generate e-invoices.
3. From April 1, 2021: Businesses with an aggregate turnover of more than Rs. 50 crore were required to generate e-invoices.
4. From October 1, 2021: Businesses with an aggregate turnover of more than Rs. 10 crore are required to generate e-invoices.
The implementation of the e-invoicing system under GST is part of the government's efforts to simplify and digitize the tax compliance process, reduce errors, and enhance the efficiency of the tax administration system. The e-invoicing system is also aimed at curbing tax evasion and improving the ease of doing business in India. Businesses are required to ensure compliance with the e-invoicing requirements under GST to avoid penalties and other legal consequences.
What is the e-invoicing system under GST?
The e-invoicing system under GST is a system for the generation and validation of invoices in a standardized electronic format that is recognized by the GST system. It is aimed at reducing the compliance burden on taxpayers, improving the accuracy and authenticity of invoices, and curbing tax evasion.