E-Invoicing: A Complete Guide
Category: GST, Posted on: 15/09/2022 , Posted By: Webtel
Visitor Count:471

E-invoicing has been a buzz in the business world for a long while due to its benefits and complexities. Yet again, it is a topic for discussion after the recent CBIC update for the Rs. 10 Cr e-invoicing mandate. For organizations falling under the new turnover limit for e-invoicing, it is important to get the basics right before integrating e-invoicing with business processes.

In the 35th meeting of the GST Council held on 21st June 2019, the suggestion of an electronic invoicing system was coined, which was hence, implemented on October 1, 2020, in a voluntary GST-phased manner for the online generation of B2B e-invoices by the registered person with an annual aggregate turnover of over Rs. 500 Cr.

This e-invoicing turnover limit was lowered to Rs. 100 Cr on January 1, 2021. In April 2021 this limit was further reduced to Rs. 50 Cr, followed by the 20 Cr mandate.

In a notification issued on August 1, 2022, CBIC amended the annual turnover limit for e-invoicing and implemented the Rs. 10 Cr e-invoicing mandate from October 1, 2022. <Know more about the recent e-invoicing update>

For all the organizations falling under the latest 10 Cr e-invoicing limit, this guide will cover everything you need to know for a smooth generation of e-invoicing for business.

What is e-invoicing?

E-invoices are digitally prepared business-to-business (B2B) invoices that follow an e-invoicing format authenticated by the Goods and Services Tax Network (GSTN) to ensure that a common format is being followed before uploading the invoiced on the GST portal.

Upon completion of successful authentication, a unique Invoice Reference Number (IRN) is generated along with digital authentication signatures, and a QR code for all invoices by the Invoice Registration Portal (IRP). This combined process is called e-invoicing under GST.


Who is eligible to generate e-invoices?


As per the e-invoicing guidelines, e-invoices are required to be issued by a registered person whose annual turnover exceeds the specified turnover limit concerning the supply of goods or services or both to a registered person (B2B), SEZs, or for exports and deemed exports in any financial year from 2017-18 to 2021-22.

This aggregate turnover limit includes the turnover of all GSTINs under a single PAN across India.

Under Section 24 of the CGST Act, all the tax invoices, credit notes, and debit notes for taxable business-to-business sales of goods or services, business-to-government sales of goods or services, exports, deemed exports, supplies to SEZ, stock transfers, or supply of services to a distinct person, SEZ developers, and supplies under reserve charged under Section 9(3) of the CGST ACT.

Who is exempt from e-invoicing?


Moving on, let us now talk about the registered person who is exempt from e-invoicing irrespective of the annual turnover as per the CBIC Notification No.13/2020.

Businesses exempt from e-invoicing

  • SEZ units. (CBIC Notification No. 61/2020)
  • An insurer or a banking company or a financial institution, including a non-banking financial company.
  • Goods transport agency supplying services about transportation of goods by road in a goods carriage.
  • Suppliers of passenger transportation services.
  • Suppliers of services by way of admission to an exhibition of cinematograph films on multiplex screens.
  • A government department and Local authority. (CBIC Notification No. 23/2021)
  • Persons registered in terms of Rule 14 of CGST Rules (OIDAR)

Documents exempt from e-invoicing

  • Delivery challans
  • Bill of supply
  • Financial or commercial credit note or debit note
  • Bill of entry
  • ISD invoices

Transactions exempt from e-invoicing

  • Any Business-to-Consumers (B2C) sales
  • Nil-rated or non-taxable or exempt B2B sale of goods or services
  • Nil-rated or non-taxable or exempt B2G sale of goods or services
  • Imports, high sea sales, and bonded warehouse sales
  • Free Trade & Warehousing Zones (FTWZ)
  • Supplies under reverse charge covered under Section 9(4) of the CGST Act

What are the benefits of e-invoicing?

For many organizations, e-invoicing might seem like a challenge, but on the bright side, e-invoicing offers a range of advantages to the organization, some of which have been listed below.

  • E-invoicing helps in avoiding the data reconciliation and mismatch errors that may occur from manual data entry.
  • E-invoicing assists real-time tracking of e-invoices.
  • The details from e-invoices get auto-populated onto tax returns and e-way bills making the taxation process easy.
  • The transactions are available online at all times, hence the differences can be caught easily by comparing input credit and output tax.
  • E-invoicing also eliminates the possibility of data mismatch as all the invoice data is saved in a centralized location with complete access at any time.

What are the Mandatory Fields in e-invoicing?

Sr. No.

Name of the Field

Remarks

Specifications

E-Invoice Details

1

IRN- Invoice Reference Number

A unique number is generated by GSTN after uploading the e-invoice on the GSTN portal

Max length: 64

Transaction Details

2

Supply Type Code

Code used to identify the types of supply

Enumerated list of codes

3

Document Number

A sequential number within the business context, time frame, operating systems, and records of the supplier

Max length: 16

4

Document Type Code

Specify the type of document here

INV/CRN/DBN

5

Document Date

The date on which the invoice was issued

(DD/MM/YYYY)

6

Preceding Invoice Reference and Date

Detail of original invoice which is being amended by a subsequent document such as a debit and credit note

Max length:16

Supplier Details

7

Supplier Legal Name

The legal name of the supplier as per the PAN card

Max length: 100

8

Supplier GSTIN 

GSTIN of the supplier raising the e-invoice

Max length: 15 

Must be alphanumeric

9

Supplier Address

Building/Flat no., Road/Street, Locality, etc. of the supplier

Max length: 100

10

Supplier Place

City/town/village of the supplier

Max length: 50

11

Supplier State Code

The state must be selected from the latest list given by GSTN

Enumerated list

12

Supplier Pin Code

Locality/district/state of the supplier

Six digit code

Recipient Details

13

Recipient Legal Name

The legal name of the recipient as per the PAN card

Max length: 100

14

Recipient GSTIN

GSTIN of the recipient

Max length: 15

15

Recipient Address

Building/Flat no., Road/Street, Locality, etc. of the recipient

Max length: 100

16

Recipient State Code

The state must be selected from the latest list given by GSTN

Enumerated list

17

Place Of Supply State Code

The state must be selected from the latest list given by GSTN

Enumerated list

18

Recipient Pin Code

Locality/district/state of the supplier

Six digit code

19

Recipient Place

City/town/village of the recipient

Max length: 100

Shipping Details

20

Shipping To GSTIN

GSTIN of the buyer or the person to whom the particular item is being delivered to

Max length: 15 

21

Shipping To State, Pin Code, and State Code

State, where the goods and services invoiced were or are delivered

Max length: 100 for the state, 6-digit pin code, and enumerated list for code

22

Dispatch From: Name, Address, Place, and Pin Code

Name, and city/town/village from where goods are dispatched

Max length: 100 each and 6 digits for Pin Code

23

IS Service

Whether or not the supply of service must be mentioned

Length: 1 (by selecting Y/N)

Details of Goods/  Services

24

Item Description

The relevant description for the item in the trade

Max length: 300

25

HSN Code

Applicable HSN code for particular goods/services

Max length: 8

26

Item Price

The unit price, exclusive of GST, before subtracting the item price discount

Decimal (12,3)

27

Assessable Value

The price of an item, exclusive of GST, after subtracting the item price discount

Decimal (13,2)

28

GST Rate

The GST rate is represented as a percentage that is applicable to the item being invoiced

Decimal (3,2)

29

IGST Value, CGST Value, and SGST Value

IGST, CGST, and SGST amounts for individual items

Decimal (11,2)

30

Total Invoice Value

The total amount of the Invoice with GST

Decimal (11,2)


Sample E-Invoice



What are the penalties for e-invoicing defaults?

There are broadly 2 penalties that are applicable in accordance with Section 48(5) of the CGST Rule in case of non-compliance with e-invoicing norms.

  • Penalty for non-issuance of e-invoice: 100% of the tax due or Rs.10,000 whichever is higher.
  • Penalty for incorrect or erroneous e-invoice: Rs.25,000

What is the process of e-invoice generation?

  1. E-invoice generation:

The E-invoice can be generated using any accounting or billing software, following the prescribed e-invoicing format. It is not mandatory for the taxpayer to generate the e-invoice over the government’s tax portal. The taxpayer can continue to use any accounting software that generates the e-invoice in the given format with all the mandatory fields.

  1. IRN generation

The supplier can generate a unique Invoice Reference Number (IRN) using a standard hash-generation algorithm. In the absence of IRN, the IRP system of government will auto-generate the same.

  1. Uploading e-invoice on the IRP

The next step is to upload the JSON file for each B2B e-invoice along with the IRN over the Invoice Registration Portal (IRP)

  1. IRP validation

The IRP will hence validate the attached JSON or IRN and authenticate the file on the basis of the central registry of GST to avoid any duplications, this IRN will be the unique identity of the e-invoice for the rest of the financial year.

  1. QR code generation

Post the successful verification of the e-invoice, the invoice will be updated with the IRP’s digital signatures and a QR code will be added to the file.

  1. Data transmission to the E-Way Bill Portal and the GST System

The uploaded data will further be auto-populated into the GST Annexure and shared with the e-way bill and the GST system.

  1. E-invoice receipt

Lastly, the digitally signed JSON file along with the IRN and QR code will be sent back to the seller and the buyer over their registered email addresses.

How can you simplify your e-invoicing process with Webtel?

Webtel is the one-stop e-invoicing solution for your business. Enjoy the fastest ERP integration and seamless e-invoicing process with Webtel’s e-invoicing solution.

Why choose Webtel?


  • Webtel’s e-invoicing software is the complete ASP-GSP solution with seamless integration with ERPs.
  • The bulk upload and bulk generation of IRN is now possible with Webtel’s e-invoicing solution.
  • Multiple data validations offered by Webtel assist in assuring 100% compliance.
  • Get e-invoicing ready in 7-day with Webtel’s fastest integration support.
  • Reduced cost of operations and procedural errors with the smart and affordable e-invoicing solution.
  • Data security is never an issue with the desktop-based solution with 100% data security and real-time monitoring.

Now pause all your e-invoicing worries and prepare yourself for the new e-invoicing limit with Webtel’s e-invoicing solution.

FAQs


  1. Is e-invoice applicable for b2c?

No, e-invoicing is not applicable to B2C transactions. However, certain entities are required to generate and print a dynamic QR code for B2C invoices.

  1. What is the recent e-invoicing limit?

The recent e-invoicing turnover limit is Rs. 20 Cr, this limit will be reduced to Rs. 10 Cr from October 1, 2022

  1. Do I need to generate the e-invoice on the government portal?

No, the taxpayers must generate their e-invoices through their ERP or billing systems, which can further be authenticated by uploading them on a unified Government Portal.

  1. What to do if the e-invoice has been rejected?

E-invoices are rejected in the case of incorrect or missing values in the mandatory fields. The e-invoice can also get rejected if the invoice number is repeated.

  1. Can an e-invoice be modified?

Once generated, the e-invoice cannot be modified. In case of any changes, the e-invoice must be canceled and a fresh e-invoice must be generated within 24 hrs. from generation.

  1. Can I upload an e-invoice for a future date in the IRP?

No, the e-invoice cannot be generated for a future date. However, e-invoices can be uploaded to the IRP for a near future date, such as 24-48 hours.

  1. How to verify the authenticity and correctness of an e-invoice?

To verify the authenticity or the correctness of an e-invoice, one can upload the signed JSON file or Signed QR Code into the e-invoicing system and click on the ‘Verify Signed Invoice’ option.

  1. Can IRN be deleted or canceled?

The IRN, once generated cannot be modified or deleted. However, if IRN is generated with the wrong information, it can be canceled within 24hrs of generation.

Still have unresolved doubts? Drop down all your queries in the comment section to get them answered.


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