Electronic invoice, also known as eInvoice, wherein all B2B invoices are digitally uploaded by supplier and authenticated by invoice registration portal (IRP) via IRN/QR code. While this concept has been around for a while, the government recently extended its applicability to businesses having more than Rs. 20 crore turnover in effect from April 1st, 2022.

eInvoicing software allows taxpayers to generate invoice data in the prescribed JSON format using the ERP or accounting system. If you own a business with an annual turnover exceeding 20 crores, eInvoice will be applicable and you need to upload invoices to the portal electronically.

If you’re new to the eInvoicing concept and would like to know more about its applicability and procedure, continue reading.

Introduction to eInvoicing under GST

eInvoicing is a system in which B2B invoices are verified by GSTIN for further use on the GST portal. An identification number will be issued against all transactions by IRP, managed by GST Network. All invoice information will be sent from this portal to both the GST portal and e-way bill portal in real-time. Thus, it eradicates the need for manual data entry while GSTR-1 returns filing and generation of e-way bills part-A, information will be passed directly by IRP to the GST portal.

For whom eInvoicing is applicable?

  Applicable to taxpayers having an aggregate turnover of more than    Date of Applicability
Rs 500 crore1st October 2020
Rs 100 crore1st January 2021
Rs 50 crore1st April 2021
Rs 20 crore1st April 2022

The taxpayers need to adhere to eInvoicing if the turnover exceeds the stated limit in any financial year from 2017-2018 to 2021-2022. Regardless of turnover, eInvoicing shall not be applicable under the following categories of the registered person, as of now:

  • An insurer or a banking firm or a financial institution, such as NBFC
  • A registered person or entity supplying passenger transportation services
  • Goods Transport Agency (GTA)
  • A registered person supplying service through the exhibition of cinematographic films in multiplex 
  • SEZ unit
  • A government department and local authority

Process of Generating eInvoice

  1. The taxpayer can use reconfigured ERP system as per the stated standard. He can coordinate with the software service provider to comply with the eInvoice schema and mandatory parameters by the CBIC.
  2. Any taxpayer has two options for generating IRN:
  3. Direct API integration or via GST Suvidha Provider (GSP) such as TaxPro
  4. Use the eInvoice bulk generation tool to upload invoices. It will generate a JSON file that can be uploaded to the eInvoice portal to generate IRNs.
  5. A taxpayer must give all the necessary information, such as billing name and address, transaction value, GSTN of the supplier, item rate, GST rate applicable, tax amount, etc.
  6. Once either of the above-listed options is selected, raise the invoice through ERP or billing software. Then, upload the details of the invoice using a JSON file or via an application service provider or direct API. 
  7. IRP will validate key info of B2B invoices, check for duplications and generate IRN for reference. 
  8. IRP generates invoice reference number (IRN), digitally signs invoice, and creates QR code in output JSON for the supplier. 
  9. IRP will send an authenticated payload to the GST portal for GST returns. GSTR-1 of the seller or supplier gets auto-filled for a tax period, which in turn determines a tax liability.

From April 1st, 2022, eInvoice applicability is applicable for businesses with an annual turnover of more than 20 crores in any previous financial year. This can help reduce the likelihood of fake GST invoices and input tax credit can be easily claimed as all invoices are generated via the GST portal.

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