Electronic Invoicing commonly known as e-invoicing is an electronic authentication mechanism under GST. Under this mechanism, all the B2B and Export invoices generated by a business are needed to be registered with the Government system i.e. through the Invoice Registration Portal (IRP). Through this, a unique identification number for every invoice is generated known as Invoice Reference Number (IRN). Along with IRN, the IRP will also create a digitally signed QR code with select details from invoice and digitally sign the uploaded invoice data.
Therefore, an e-invoice is a document which has an IRN associated with it and the digitally signed QR code printed on it.
Benefits of e-invoicing
– Reduces tax evasion
– Easy GST compliance
– Time saving
– Environment friendly
– Less chances of errors
– Increases business efficiency
Who needs to generate e-invoice?
E-invoice was introduced in the country in a phased manner based on the Aggregate Annual Turnover of the companies. The first phase went live for companies with turnover of more than ₹500 CR on 1st October 2020. The second phase went live for companies with turnover more than ₹100 crore on 1st January, 2021.
As per the Notification No. 13/2020 amended vide Notification No. 70/2020 and Notification No. 88/2020, aggregate annual turnover in any preceding Financial Year from 2017-18 onwards needs to be considered to ascertain the applicability of E-Invoicing mandate. Aggregate Annual Turnover is determined as per GST Returns. GST System has also given a facility to check the applicability on the e-invoice portal.
E-invoice can be generated only by registered suppliers. The unregistered suppliers, recipients and transporters cannot generate e-invoice.
If the turnover is less than ₹100 crores, then provision of e-invoicing is not applicable.
If the turnover is more than ₹100 crores but less than ₹500 crores, then it is mandatory to generate e-invoice for B2B supplies.
If the turnover is more than ₹500 crores, Mandatory to generate e-invoice for B2B supplies and QR Code for B2C supplies.
Who is not required to generate e-invoice?
As per the Notification No. 13/2020-Central Tax dated 21st March, 2020, the following are not required to generate e-invoice:
– Insurance Company
– Financial Institution
– Banking Company
– Supplier of passenger transportation services
– Supplier of services by way of admission to the exhibition of cinematograph films in multiplex screens
– Special Economic Zones (SEZs) Units (Notified vide Notification No. 13/2020 and 61/2020- Central Tax): As per the notifications, exclusion is for SEZ Unit and not for SEZ Developers.