E-Invoicing under GST:
1. Who can issue E-invoice?
An e-invoice can be generated by notified class of registered persons, whose aggregate turnover in any preceding financial year (staring from 2017-18 onwards) exceeds INR five hundred crore towards supply of goods or services or both to a registered person or for exports. Any person who does not satisfy the above conditions is not eligible to issue e-invoices. Please note that the threshold of INR 500 crore has to be checked for each Financial Year.
*“aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.
2. Who are excluded for issuance of E-Invoice?
Notification No. 13/2020-CT, as amended from time to time, has prescribed that e-invoices shall not be generated by a unit in Special Economic Zone (‘SEZ’) and for supplies to a person not registered under GST law. In addition, the supplies to registered person as referred to in sub-rules (2), (3), (4) and (4A) of Rule 54 of the Central Goods and Services Tax Act, 2017 are also excluded from the applicability of e-invoicing provisions. (B2C Supplies, SEZ Units, Insurers, Banking & Other Financial Companies, Passenger Transport Service Providers, Admission to Exhibits of Films in Multiplex and GST Service Providers)
3. Manner of issuing invoices
As per Rule 48(4) of the CGST Rules, the invoice shall be prepared by notified class of registered persons, by including the particulars contained in FORM GST INV-01. The invoice is prepared after obtaining an IRN by uploading information contained therein on the IRP in a manner prescribed and subject to certain specified conditions and restrictions as notified.
The Format/Schema for e-Invoice in FORM GST INV-01 is prescribed vide Notification No. 60/2020-C.T., dated July 30, 2020. The technical details about the schema is discussed in subsequent part of this document.
The Government vide Notification No. 69/2019-C.T., dated December 13, 2019 notified a list to ten IRPs (example: www.einvoice1.gst.gov.in) for the purpose of preparation of the invoice in terms of Rule 48(4) of the CGST Rules. Though this Notification uses the term ‘preparation of the invoice’, the IRPs are meant for reporting of invoices and not for its preparation.
Notification No. 13/2020-CT as amended by Notification No. 61/2020-CT and Notification No. 70/2020-CT prescribes that e-invoice shall be generated by registered person, other than those referred to in sub rules (2), (3), (4) and (4A) of Rule 54 of the said rules, whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds five hundred crore rupees, as a class of registered person who shall prepare invoice and other prescribed documents, in terms of Rule 48(4) of the CGST Rules in respect of supply of goods or services or both to a registered person or for exports.
As per Rule 48(1) and (2) of the CGST Rules, the invoice for supplier of goods and services are required to be prepared in triplicate and duplicate, respectively. However, these requirements are not required to be complied with for a notified category of registered persons who are required to generate e-invoices.
4. Terminologies in E-Invoicing:
a. IRN:
Invoice Reference Number or IRN is a 64-character length unique number generated by IRPs in respect of each document which is uploaded by the notified category of registered person. It is generated by means of computer algorithm using Secure Hash Algorithm (RSA256).
The 4 critical fields which are pivotal for generation of IRN are:
• GSTIN of the Supplier
• Financial Year (Captured from the document date)
• Document Type viz:
o Invoice – INV
o Debit Note – DBN
o Credit Note – CRN
• Document Number (i.e. Document series as reported by the Supplier).
b. IRP
Invoice Registration Portals or IRPs are the list of uniform resource locator (URLs) notified and maintained by the Government (ex: https://einvoice1.gst.gov.in/) primarily meant for registering the invoice / document details. These URLs or portals are entrusted with various functions such as:
• Registration of users;
• Generation, Validation, Cancellation of e-Invoices; and
• Integration with ERPs, GST Common portal, GSPs, etc.
c. QR Code (Signed)
Quick Response code or QR codes are the code in Base64 form generated by IRPs in respect of each document while creating IRNs. The objective of the Government is not merely generating IRN via IRPs but also to authenticate the genuineness of the invoice, by preparing the important information of the invoice / document in QR Code form and signing it so that its authenticity can be verified oine by anyone using oine tools. Therefore, a digitally signed QR code would be provided by the IRPs along with IRN.
Every signed QR code (B2B) consists of the following e-invoice parameters:
1. GSTIN of Supplier;
2. GSTIN of Recipient;
3. Invoice number as given by Supplier;
4. Date of generation of invoice;
5. Invoice value (taxable value and gross tax);
6. Number of line items;
7. HSN Code of main item (the line item having highest taxable value); and
8. Unique Invoice Reference Number (i.e. hash).
d. GSPs
GST Suvidha Providers or GSPs are the GSTN’s approved list of service provides who can assist the taxpayers to comply with the procedural provisions of the GST law through its platforms / applications. The approved GSPs are authorized to connect to the GST Common portal using published APIs.