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e-Invoice: e-Invoicing under GST

What is an e-Invoice?

A GST e-invoice, often called an electronic invoice, is a digital document issued between a supplier and a customer and verified by the government’s tax system.

What is e-Invoicing under GST?

The e-invoicing or electronic invoicing system allows the GST Network (GSTNInvoice )’s Registration Portal (IRP) to provide each invoice’s identification number. In addition, this e-invoice gateway will transmit all invoice information in real time to the GST and e-way bill portals.

Latest Updates on e-Invoicing

The e-invoicing system will apply to businesses with an annual turnover exceeding 10 crores. Starting 1st October 2022, these businesses must create invoices on the central government portal.

The need for a standard e-Invoicing system

The e-invoicing software allows the GST Network’s Invoice Registration Portal (IRP) to provide an identifying number for each invoice and communicate all invoice information to the GST in real time.

The electronic invoicing method ensures that all businesses submit invoices to the GST portal consistently.

Furthermore, sending information directly from the IRP to the GST portal eliminates manual data entry.

International tax administrations are eager to see the e-invoicing system succeed for two reasons:

  1. Following a consistent format makes it simple to communicate invoices.
  2. You can have a central system to read the invoices.
  3. Fields will be pre-populated with e-invoicing while submitting taxes, avoiding discrepancies during data entry and reconciliation.

Who must generate e-Invoice?

All taxpayers who have an aggregate turnover of Rs. 50 Crores and above in a Financial Year must generate e-invoices.

GST e-Invoices depend on the companies’ aggregate annual turnover, fiscal year, entity types, and transaction categories.

AATO stands for annual aggregate turnover in the context of electronic invoicing and input taxes.AATO is the total value of all taxable supplies estimated on an all-India basis. However, it excludes the central tax, state tax, union territory tax, integrated tax, and cess.

How to register for an e-Invoicing system

Registering on the e-invoice portal is a straightforward process if you are a GST-registered taxpayer with a valid GSTIN number.

Step 1:

To begin e-invoicing, Navigate to the invoice registration website (IRP).

Please go to https://einvoice1.gst.gov.in/.

Note: 

You can access the e-invoice portal with your credentials if you have registered your company on the e-way bill (EWB) portal.

Otherwise, you can do so immediately through the e-invoicing system.

The taxpayer must have a valid GSTIN, and your mobile phone number must register with the GSTN.

Step 2:

Click the Registration button. Select ‘e-Invoice Enablement‘ under ‘Registration.’

Alternatively, open the registration form by clicking on the following link:

https://einvoice1.gst.gov.in/Home/UserRegistration

Step 3:

The step redirects you to the E-invoice Registration form. Enter the GSTIN of the firm enabling the e-Invoicing, as well as the captcha code. To proceed, click ‘Go.’

After submitting this request, the e-invoice portal displays an e-invoice registration form. GSTIN data will be auto-populated in this form.

Step 4:

Review the information in the e-Invoice registration form and click the ‘Send OTP‘ button. This OTP will be delivered to the GSTN registered mobile number.

Step 5: 

Enter your OTP and then click ‘Verify OTP.’

Step 6: 

After successfully verifying the OTP, the e-invoicing system will prompt you to input a username and password of your choosing. Enter your username and create a strong password. To save the changes, click the ‘Save’ button.

Step 7:

You may now use your new login credentials to access the e-invoicing system.

Benefits of having an e-Invoicing system

Businesses will benefit from e-invoicing in the following ways:

Limited Errors

The most valuable benefit of e-invoicing is the reduction of errors. E-invoicing in GST resolves and plugs a significant gap in GST data reconciliation and reduces errors.

Electronic invoice processing solutions in the e-invoice systems lessen the need for manual inputs and improve automation.

Furthermore, e-Invoices generated by one software can be read by another. As a result, it enables interoperability and significantly reduces data entry errors compared to paper-based invoices.

Easy Invoice Tracking

Another advantage of e-invoicing is the ease of tracking invoices. The e-invoicing software determines the time of sending, viewing, and paying an invoice and thereby helps in the real-time tracking of invoices.

As a result, it is simpler to confirm the delivery and receipt of an invoice.

Furthermore, certain e-invoicing service providers can assist you in determining when the customer viewed the invoice.

Reduced Tax Evasion

E-invoicing under GST (Goods and Services Tax) suggests prospects for dealing with tax evasion. E-invoicing software allows real-time access to invoice data. It contributes to the faster availability of genuine input tax credits. Hence reduces the possibility of invoice manipulation.

Furthermore, including input tax credit and output tax information in e-invoicing software can assist tax inspectors in detecting fraudulent input tax credits.

Hence, e-invoicing systems reduce the risk of false GST invoices while ensuring valid ITC (Input Tax Credit) applications.

Data Integrity

Since the information needed for audits and surveys by the tax authorities is available at the transaction level, e-invoices eliminate the risk of counterfeit bills, instantly certifying their legitimacy.

Sample of e-Invoice

E-invoicing is the most effective way to track your bills in real-time and reduce errors. After you’ve prepared an e-invoice, you can submit it for approval to the Invoice Registration Portal (IRP). And after IRP verification, digitally sign it and share it with the connected buyer.You can otherwise use automated e-invoice generation software like myBillBook and send them to your customers.

Sample of e-Invoice

FAQs about e-Invoice under GST

How do I get an e-invoice login?

You will receive an e-invoice login prompt after registering on the IRP, verifying the OTP on your smartphone, and selecting a username and password.

What is the turnover required for e-invoice?

The yearly turnover required for e-invoicing has been Rs 50 crores since 1st April 2021.

Who is exempt from e-invoice?

    Insurance, a bank, or a financial institution (including an NBFC).

  1. A goods transport company (GTA)
  2. A registered individual who provides passenger transportation services.
  3. A registered individual providing services such as admission to cinematographic film screenings in multiplexes.
  4. A special economic zone (SEZ) unit (excluded under CBIC Notification No. 61/2020 - Central Tax)
  5. A government department or local authority (exempt from CBIC Notification No. 23/2021 - Central Tax)
  6. Persons registered under Rule 14 of the CGST Rules (OIDAR)

What is the limit for e-invoices in GST?

The limit for e-invoices in GST is Rs 20 crore since April 2022 and will be Rs.10 crore starting 1st October 2022.

What happens if you do not generate an e-invoice?

The penalty for non-issuance of e-invoice is 100% of the tax due or Rs. 10,000, whichever is higher. The penalty for an incorrect or erroneous e-invoice is Rs. 25,000.

Can we claim ITC without an e-invoice?

According to section 16(2)(aa) of CGST Act, 2017, you can avail the ITC on an invoice only when you have furnished the details of such invoice or debit note in the statement.

Does an e-invoice require a signature?

No. You do not need a signature or digital signature for an e-invoice. However, some vendors may insist on the signature of the issues for payment purposes. To avoid such problems, better to get it signed with DSC or a physical signature.

How do I cancel an e-invoice after 72 hours?

After 24 hours, a recipient of the consignment can cancel an e-Way Bill at the consignor's request. And once the 72-hour deadline has expired, the e-Way Bill cannot be cancelled because there is no method for cancelling an e-Way Bill after 72 hours.

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