written by Khatabook | November 15, 2021

E-Invoicing for Businesses with Turnover Over Rs.50 Crore

As per the recommendation by the Goods and Services Tax Network (GSTN), for the Goods and Services Tax (GST) registered suppliers, e-invoices are the standard format of the invoices. There is a misconception that e-invoicing is the generation of invoices from the GSTN Portal, which is the central portal of the GST department. It is, in fact, the format of the invoice. The taxpayer can continue to use their current accounting or billing system tool to generate the invoices. 

Existing businesses are only required to be updated as per the new e-invoice standard. These invoices will be reported to IRP (Invoice Registration Portal). On reporting, a unique IRN (Invoice Reference Number) is generated after signing the e-invoices digitally, and a QR (quick response) code is added. The invoice now can be provided to the receiver along with QR (quick response) Code. Now, let's know about the e invoicing from 1st April 2021.

E-invoice under GST Notification

  • As per notification No 61/2020-Central Tax and 71/2020-Central Tax, E-invoicing was implemented from 1st October 2020 for registered taxpayers under the GST regime with an aggregate turnover exceeding Rs.500 crore. 
  • The government made an amendment, and as per Notification No. 88/2020, e-invoicing has been extended to businesses whose aggregated turnover exceeds Rs.100 crore from 1st January 2021.
  • Again, the government made further amendments via e invoice latest Notification No. 5/2021 regarding the applicability of e-invoicing from 1st April 2021 for businesses whose turnover exceeds Rs. 50 crore and under a single PAN across India, the aggregate turnover will include the turnover of all GSTINs

GST Notification

Notification No (Central Tax)

Major content

68 Dated 13.12.2019

As per Central Goods and Services Tax Rules (Eighth Amendment), various new sub-rules 4,5 and 6 are placed in Rule 48 of CGST Rules, 2017:

(4) The invoices shall be developed by such class of registered persons ----

  • as may be suggested by the Government, on recommendations of the Council, 
  • by including such particulars accommodating in FORM GST INV-01
  • after obtaining an IRP (Invoice Reference Number)
  • by uploading such information contained therein on the CGST (Common Goods and Services Tax) Electronic Portal in such manner and subjected to such restrictions and conditions as may be notified in the notification. 

(5) Every such invoice issued by the registered person to whom sub-rule (4) of Rule 48  applies in any other manner as specified in the sub-rule of Rule 48 shall not be said to be as an invoice. 

(6) The provisions of sub-rules (1) & (2) of Rule 48 shall not apply to the invoice prepared in a manner as mentioned in sub-rule (4)

70 Dated 13.12.2020

Every notified registered person, whose aggregate turnover exceeds 100 crore rupees in any financial year, as a registered person who will prepare invoice in as per sub-rule (4) of rule 48 as per the CGST Rules in respect of the supply of services or goods or both to a registered person. The notification shall come into effect from the 1st day of April 2020.

13 Dated  21-3- 2020 (in supersession of 70/2019 Dated 13-12- 2019)

To start e-invoicing from the 1st October 2020; notified registered persons:

  • whose aggregate turnover exceeds Rs. 100 Cr. in any financial year, as a class of registered person
  • who shall prepare invoices and other mentioned documents, as per sub-rule (4) of rule 48 of CGCT Rules,
  • in respect of the supply of services or goods or both to a registered person,

other than those documents as referred to in sub-rule (2), (3), (4) and (4A) of rule 54 of the said rules, as a category of registered person 2017.

61 Dated 30-7-2020  

As per the amended notification, 13 Dated 21-3-2020, the Total Aggregate Turnover of registered persons was mandatorily increased from Rs 100 to Rs 500 crores as per Rule 48(4). It excludes Special Economic Zone units from e-invoicing.

70 Dated 30-9-2020  

As per the notification, 13  Dated 21-3-2020 (in supersession of 70/2019 Dated 13/12/2019)  is substituted from “any financial year” to “any prior fiscal year from 2017-18 onwards” which also include exports invoices.

88 Dated 10-11-2020

The words “rupees five hundred crores” shall substitute “rupees one hundred crores” will come into force from the 1st day of January 2021.

05 Dated 08-03-2021

The words “fifty crore rupees” shall substitute “one hundred crore rupees” will come into force from the 1st day of April 2021.

Registered persons or for exports:

  • whose aggregate total turnover exceeds Rupees 50 Cr. in a financial year, as a category of a registered person
  • who shall prepare invoices and such other prescribed documents, as per sub-rule (4) of rule 48 of CGCT Rules,
  • in respect of the supply of services or goods or both to a registered person 

other than those mentioned in sub-rule (2), (3), (4) and (4A) of rule 54 of the said rules, as a class of registered person 2017.

Also Read: Time, Place and Value of Supply for Goods & Services under GST

e-Invoice applicability from April 2021 

Applicability of e-Invoicing 

Central Board of Indirect Taxes and Customs (CBIC) has notified that e-invoicing under GST notification will be mandatory for business to business (B2B) which exceed turnover of Rs 50 crore from April 1, 2021. Therefore, the GST e invoice limit is Rs 50 crore. 

In the past, issuing electronic invoices was mandatory for businesses whose turnover exceeded Rupees 100 crores. It was put into effect from January 1st, 2021, whereas for companies whose turnover exceeds Rs 500 crore, it was effective from October 1, 2020.

Non-Applicability of e-Invoicing 

E-invoicing under GST notification shall not be applicable, irrespective of the turnover, to the below-mentioned categories of registered persons, as notified in Notification No.13/2020 – Central Tax by CBIC:

a. Special Economic Zone Units.

b. Goods transport agency supplying services in respect of transportation of goods by road in a goods carriage.

c. Banking company, insurance company, or financial institution, including NBFC (non-banking financial co.).

d. Suppliers of transportation service to the passenger.

e. Suppliers of services in relation to admission to exhibiting cinematograph films on a multiplex screen.

How to generate an E-invoice from April 2021 

The stages which are involved in raising or generating e-invoice are:

The registered taxpayer needs to ensure that they have reconfigured the ERP (Enterprise Resource Planning) system per the  Pan-European Public Procurement On-Line (PEPPOL) standards. The standards set for e-invoicing, known as e-invoice standards (schema), can be incorporated by the software service provider if coordinated with them. Then it must at least be as per the mandatory framework notified by the Central Board of Indirect Taxes and Customs (CBIC).

Any taxpayer primarily gets two options for IRN (Invoice Reference Number) generation:

  1. The IP address of the computer system can whitelist on the e-invoice portal for a direct Application programming integration (API)  or integration via (GSP) GST Suvidha Provider.
  2. To bulk upload invoices, one should install the bulk generation tool. 
  3. Generating IRNs in size will help develop a JSON (Javascript Object Notation) file that can be uploaded on the e-invoicing portal.

The taxpayer must give all the required details like GST No. of the supplier, billing name and address, transaction value, GST rate applicable, item rate, amount of tax, etc., for raising a regular invoice on that software.

  • When one of the options given above is chosen; the invoice is raised on a respective billing software or ERP software. 
  • Then you can upload the details, especially fixed required fields, of the invoice, using the JSON (Javascript Object Notation) file or through direct API or via an application SP (service provider) app or through GSP onto the IRP. 
  • For e-invoicing and authentication, the IRP (Invoice Registration Portal) will act as the central registrar. 

  • There are various other modes of collaborating with IRP, for example, mobile app-based and SMS-based.
  • The key details of the Business to the Business (B2B) invoice will be validated through IRN (invoice reference number). You can also check for any duplications for reference. 

  • There are some frameworks based on which IRN (invoice reference number) will be generated: 
    • Invoice number
    • Seller GSTIN
    • Document type (DN/INV/ CN)
    • FY in YYYY-YY.
  • The IRP (invoice reference number) will be generated by IRP, which will sign the invoice digitally and in Output JSON; it also creates a QR (Quick Response) code for the supplier. 

(The arrow denotes the generated IRN)

  • On the other hand, if the email is provided in the invoice, the supplier will get intimation of the generation of e-invoice through email.
  • IRP will send the payload which was authenticated for GST returns to the GST portal. Also, if applicable, the e-Way bill portal will get the details. 
  • When will file the GSTR-1 for the taxation period; the information of the registered seller also gets auto-filled. In return, it also determines the liability of tax for the taxpayer.
  • The invoice is printed with a logo with the IRN, therefore, all taxpayers mandatorily will have to use the e-invoicing system to report invoices on IRP in electronic format.

 E-invoice from April 2021: Benefits in Business

Following are the benefits that businesses will have by using e-invoice initiated by GSTN:

  • Mismatch errors under GST are reduced by e-Invoice, which resolves and plugs a significant gap in data reconciliation.
  • E-Invoices created on one software can be studied by another, allowing interoperability and reducing data entry errors.
  • E-Invoice enables real-time tracking of invoices prepared by the suppliers. 
  • Faster availability of genuine input tax credit.

Curbing Tax Evasion by using e-invoicing under GST notification

Following are the ways in which e-invoices helps in curbing tax evasion:

  • As e-invoice will have to be compulsorily generated through the GST portal, tax authorities will have access to transactions as they take place in real-time.
  • As the invoice gets generated before carrying out a transaction, there is less scope for manipulating invoices.
  • GSTN can easily track fake tax credit claims since the input credit can be matched with output tax details.

Also Read: GST Rates in India - List of Goods and Service Tax Rates, Slab

Conclusion

Adding to the improvement of GST structure, the GST council has made a move to legitimate a GST electronic invoicing or E-invoicing in a directed way for communicating business to business (B2B) supplies to the system. The provision was in practice from 1 January 2020 voluntarily. But every new provision requires changes or amendments to achieve the goal set practically. 

Developing the functioning of an e-invoicing system can now be produced by one software and operated by another software, thereby removing the need to re-enter the digits for a new entry. The e invoice applicability from April 2021 made the process simple for managing e invoicing turnover limit of Rs 50 crore. Adopting this particular standard will authorise the buyer, seller, bank or agent or any other respective concerned person to be studied by machine and prevent the gratuitous data hence removing errors. This is the primary objective behind changing the structure of the e-invoicing GST. Download the Khatabook app for more information.

FAQs

Q: What are the supplies which are covered presently under e-invoice?

Ans:

Supplies that are made to registered persons (B2B), supplies that are made to SEZs (with/without payment), supplies made as Exports (with/without payment), supplies made as Deemed Exports, or by notified class of taxpayers are currently covered under e-invoicing.

Q: The aggregate total turnover of my company exceeds Rs 50 Crores, but I have not enabled the e-invoicing. How to get this enabled?

Ans:

Follow the given steps to enable e-invoicing under GST notification:

  • In the https://einvoice1.gst.gov.in/ portal, there is an option as ‘e-Invoice Enablement’ under the registration menu. 
  • Select and enter the GSTIN of a company and get the OTP authenticated, and in relation to the financial year, enter the turnover and submit. 
  • Now the company is enabled for e-invoicing: login and register. 

Q: What are the documents that are required to be reported into the IRP?

Ans:

The documents that are required to be reported under the e-invoicing system are as follows-

  • Debit Notes by the recipient
  • Credit Notes by the Supplier
  • Invoices by the supplier
  • Any other document to be reported as notified under GST law by the creator of the document under GST Law

Q: Can an e-invoice be cancelled fully or partially?

Ans:

An e-invoice can be cancelled wholly but cannot be cancelled partially. It must be reported to the IRN on cancellation within 24 hours. Any attempt to cancel cannot be done on the IRN, and before the returns are filed, they can be manually cancelled on the GST portal.

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