GST e-INVOICE

e-Invoicing Implementation Date

The proposal for implementing e-Invoicing was placed before the 35th GST Council Meeting in June, 2019. The GST Council provided an in-principle launch of a pilot project on voluntary basis for online generation of B2B e-invoices from January 2020.

TimelineTurnoverSupply TypeImplementation
January, 2020GST registered entities having an aggregate turnover of more than INR 500 crores.B2BVoluntary
February, 2020GST registered entities having an aggregate turnover of more than INR 100 crores.B2BVoluntary
April, 2020 onwardsGST registered entities having an aggregate turnover of more than INR 100 crores.B2BMandatory

The Government has provided exemption to certain classes of persons from implementation of e-Invoicing through Notification No.13/2020-Central Tax dated 21st March, 2020. As per the notification, the following entities are exempted from the above implementation timeline:

Advantages of GST e-Invoice

Key Concepts of e-Invoicing

The following are some of the key concepts with respect to GST e-Invoicing:

Generating e-Invoice

GST e-Invoice is not an invoice generated on the Government Portal, as such a portal can become a choke point in trade. GST e-Invoicing is a way process by which the taxpayer will generate a unique Invoice Reference Number (IRN) for each invoice and mention the same on the invoice issued.

Invoice Reference Number (IRN)

Invoice Reference Number is a unique number for each invoice provided by the GST Invoice Registration Portal on successful upload of an e-Invoice. Invoice Reference Number must be mentioned on the invoice by the supplier to comply with e-Invoicing regulations.

e-Invoice Format

There is no specific format for e-Invoice that has been provided by the GSTN. There will also be no changes to the invoice that is prepared and printed today. Under e-Invoicing, certain data in the GST invoice will be transmitted to the GSTN Invoice Registration Portal (IRP) electronically and a Invoice Reference Number will be generated along with a QR code. The QR code needs to be printed on the invoice generated by the supplier. Hence, suppliers can continue to generate invoices from their billing softwares with a look and feel that suits their requirements and compliant with the GST invoicing rules. The only change will be generation of Invoice Reference Number from the GST Invoice Registration Portal and printing of e-Invoice QR code on the invoice.

Invoice Registration Portal (IRP)

Invoice Registration Portal (IRP) or e-Invoice Registrar is the platform issuing the Invoice Reference Number. NIC has been proposed as the first IRP. As the number of taxpayers under e-Invoicing increases, more IRPs will be added to increase availability, speed and created a distributed architecture.

Generating GST e-Invoice

The process of generation of a GST e-Invoice can be divided into four phases:

  • Generation of Invoice

    In the first phase, the seller will generate an invoice in his/her accounting or billing or ERP system. The invoice created must take into consideration the e-Invoice standards that have been published by the GSTN and should contain certain mandatory parameters. The invoice prepared on the software should then be transmitted to the Invoice Registration Portal as a JSON format.

  • Uploading JSON to Invoice Registration Portal

    The sellers accounting software through APIs or GSP/ASP or offline tool will be required to transmit the invoice in JSON format to the Invoice Registration Portal. The JSON can be uploaded directly from an accounting software through APIs.

  • Processing of Data by IRP

    The IRP will check the JSON invoice received for correctness and ensure that the same invoice from the same supplier is not duplicated. On validation of the JSON invoice, the IRP will add its digital signature on the invoice, assign a IRN (Invoice Reference Number) and a QR code to the JSON file. This digitally signed JSON with IRN is sent back to the seller and will become a valid GST e-Invoice for the seller and buyer.

  • Transmission to GSTN & eWay Bill Platform

    IRPs will also share the signed e-Invoice data with the GSTN system and eWay Bill portal to reduce compliance burden for the taxpayers.

Invoice Reference Number (IRN)

Each invoice uploaded by a seller to the Invoice Registration Portal and validated will receive a number called Invoice Reference Number (IRN). IRN is a 64 characters long, unique number in the GST system – irrespective of taxpayer, financial year and document type.

IRN will be issued by the Invoice Registration Portal on uploading of the JSON invoice file. IRN will be generated based on a combination of the supplier GSTIN, document type, document number and year of invoice. Document types are INV for invoice, CRN for credit note, DBN for debit note.

e-Invoice QR Code

The IRP will digitally sign a JSON invoice submitted by the seller and also generate a QR code containing the unique IRN along with other invoice data so that it can be readily verified online. This QR code can be scanned by the buyer or any tax offer using an app to check the validity of invoice issued. The e-Invoice QR code will contain the following information:

GST e-Invoice Format

The GST e-Invoice will be similar to the existing GST invoice format. It has been clarified by the GSTN that writing of IRN (64 characters) is not required by the seller. However, the IRN will be included in the QR code provided by the Invoice Registration Portal. The QR code will contain details of the invoice and the IRN. Thus, it is better to make digitally signed QR code as a response which will be proof of registration of invoice and print on invoices issued by a business.

Time Limit for Generating e-Invoice

The time limit for generating an e-Invoice will be notified by the Government. Without registration of an invoice with Invoice Registration Portal and generation of QR code, it will not be valid. Hence, before the movement of goods or delivery of goods or service or filing of GST returns, e-Invoicing must be completed.

Cancellation of e-Invoice

An e-Invoice once generated can be fully cancelled within 24 hours on the Invoice Registration Portal. After 24 hours, cancellation of e-Invoice on the Invoice Registration Portal will not be possible and the same will have to be done on the GST Portal before filing of GST return.

Once a GST e-Invoice is cancelled, the same invoice number cannot be used again to generate another invoice.

Amendment of e-Invoice

Amendments to e-Invoice can be done on the GST Portal. All amendments to the e-Invoice generated on the Invoice Registration Portal can be done only on the GST Portal. An amended invoice if again sent to IRP as a JSON file will get rejected as the IRN will be duplicate.