ALL YOU NEED TO KNOW ABOUT E- INVOICE IN GST.
Stepping into the new decade with GST E-Invoice Generation System on Portal.
January 2020, embarks the implementation of electronic invoicing by the Indian taxation Council. The world is changing and so is the time and age to global digitalisation of business processes. This article aims to update you about the details of GST Governance and amendments in tax laws.
E-Invoice-What is it?
GST E- Invoice is the initiation of the digital bill for goods and services, generated at the Government GST portal. The concept of GST E-Invoice generation system has been taken into consideration for the reduction in GST evasion. All business (within the determined limit of turnover) will be provided with a system through which it will be mandatory for them to generate ‘e-Invoice’ for every sale on the Government GST portal. Every business that are applicable for such an invoice will be allotted a unique number whenever an e-invoice is generated. They can match the identification number with the invoices which are written in the sales return and paid taxes for verification. All relevant information will be transferred from this portal to the GST portal and E-Way bill portal in real-time. There will be no need of manual data entry while filing ANX-1/GST returns as well as generation of part A of the E-Way bill, as the information is passed directly by the IRP to GST portal. In short, it is a digital bill generated using a standardised (recognised) format, where the electronic data can be shared with others.
FROM WHEN WILL E-INVOICE BE IMPLEMENTED?
The GST council chaired by Union FM Nirmala Sitharam approved the standard of E-invoice in its 37th meeting held on 20th September 2019. However no exact date of implementation has been provided yet. Electronic invoicing is proposed to be implemented from 1st January 2020 in a phased manner by GSTN. Similar to the new GST return filing system, the E-Invoicing system will first be available on a trial basis or voluntary compliance.
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BUSINESSES AT AN ADVANTAGE:
Some crucial benefits of E-Invoice are enlisted below:
- E-Invoice determines to bridge a major gap in data reconciliation under GST to reduce mismatch and inaccuracy.
- Interoperability is made possible as invoices created by one software can be read by another.
- E-Invoice enables real-time tracking of invoices prepared by the supplier along with the faster availability of input tax credit. It will also reduce input tax credit verification issues.
- The relevant details of the invoices would be auto-populated in the various returns, specially for generating the part A of E-Way bills.
- There will be minimal need of data reconciliations between the books and GST returns files.
- The time-taking tedious tax filing process will become automated and availability of genuine input tax credit will be faster.
- The tax authorities will not be required for audits since the information they require is available at transaction level.
- Decrease in the number of frauds as generating fake GST invoices will become impossible.
Where are you placed?
APPLICABILITY OF E-INVOICE :
E-Invoicing under GST time period with business turnover conditions :
- Turnover 500 crore plus-voluntary and trial basis start from 1.1.2020.
- Turnover 100 crore plus-voluntary and trial basis start from 1.2.2020.
Note: GST E-invoicing is mandatory from 1st april 2020 for the above businesses. Those with below 100 crore turnover voluntary and trial basis start from 1.4.2020.
It will be mandatory for the businesses to generate the entire GST E-Invoice including all the value of sales. Expand ERP will be fully equipped with the software to make accounting and finances more methodical and organised for your business.
How to go about it?
The process of generating the GST E-invoice will be similar as the E-Way bill which is generated on the www.ewaybill.nic.in or the GST payments are done on the GSTN portal. The generation of invoices will be done by a centralised Government quarter which will replace the E-Way bill that is being generated for the movements of goods.
- At first,businesses need to generate an electronic invoice on every sale on their respective ERP’s. The standard invoice format if prefixed by authorities for every business so that proper details are extracted.
- The E-Invoice generated needs to be reported to the Invoice Registration portal (IRP) of GST.
- On the portal, the invoice reference number (IRN) will be authenticated and the invoice will be signed digitally.
- Then a QR code will be created. The code contains all the vital information related to the invoices which will be redirected to the taxpayer who filed the invoices.
The IRP will send a copy of the signed invoices to the provided email id of the recipient of supply who is involved in the whole process.
What do you need?
Documents required to be provided by the taxpayer while reporting the E-Invoices to IRP:
- Supplier side invoices
- Suppliers credit notes
- Recipients debit notes
- Other documents (according to the business)
SALIENT FEATURES OF E-INVOICE IN GST SYSTEM:
- Every taxpayer will be allotted a unique IRN.The unique IRN will be based on the computation of hash of GSTIN of generator of document (invoice or credit note etc.) year and document number like invoice number. This hash will always be the same irrespective of the registrar who processes it. This hash will be the IRN.
- Once the invoice data is uploaded on the IRP which will also generate the hash in order to verify it and then it will be digitally signed with the private key of the IRP.
- IRP will also generate a QR code containing the unique IRN along with some important features of invoice and digital signature so that it can be verified on the central portal as well as by an offline app. This will be useful for tax officers checking the invoice on the go where the internet will not be available.
- It will be easy for anyone to download the invoice from the offline app provided in the IRP and authenticate the QR code of the invoice offline and its basic details. However to see the whole invoice , one will have to connect to the portal and verify and see the details online. Only tax officers will be authorised to download the entire details of any invoice.
STANDARDISATION OF INVOICE:-
A technical group constituted by the GST council secretarial has drafted standards for E-Invoice after having industry consultation. The E-Invoice schema and template, as approved by the GST council, are available at www.gstn.org/e-invoice.
Ways to adopt E-invoice:
DIFFERENT MODES OF COMMUNICATING:
There are multiple modes made available so that taxpayers can use at his or her convenience. For example
- Web based
- API based
- SMS based
- Mobile app based
- Offline tool based
- GSP based
How to use?
SOFTWARES TO BE USED:
The GSTN, in partnership with the ICAI (institute of chartered accountants of india), has drafted an E-Invoice standard. This refers to PEPPOL(Pan European Public Procurement Online), which is based on the UBL (universal business language) standard. Certain features which are made mandatory under the GST law have also been marked as mandatory fields in the invoice draft.
Countries that are already using E-Invoice in GST are South Korea, Brazil, Chile, Mexico, Canada, Norway, Sweden, Turkey, Italy, Denmark, Peru etc.
Some Pointers to remember:
- The maximum number of line items allowed per e-invoice is 100.
- It is not mandatory for a supplier to sign the e-invoice again.The IRP will digitally sign after validation.
- On the IRP,the data will be available only for 24 hours .
- An e-invoice cannot be cancelled partially,it has to be cancelled fully.
- All amendments to an e-invoice can be made only on the GST Portal.
E-INVOICING In GST with EXPAND ERP:
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Team Expand works relentlessly on innovations and believes in keeping your business at par with the latest in technology and business affairs. We will be pleased to partner with you at the very onset of E-Invoicing in GST system beginning from the next Financial Year. To know more call..