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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.
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.
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.
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
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.
Name of the Field
IRN- Invoice Reference Number
A unique number is generated by GSTN after uploading the e-invoice on the GSTN portal
Max length: 64
Supply Type Code
Code used to identify the types of supply
Enumerated list of codes
A sequential number within the business context, time frame, operating systems, and records of the supplier
Max length: 16
Document Type Code
Specify the type of document here
The date on which the invoice was issued
Preceding Invoice Reference and Date
Detail of original invoice which is being amended by a subsequent document such as a debit and credit note
Supplier Legal Name
The legal name of the supplier as per the PAN card
Max length: 100
GSTIN of the supplier raising the e-invoice
Max length: 15
Must be alphanumeric
Building/Flat no., Road/Street, Locality, etc. of the supplier
City/town/village of the supplier
Max length: 50
Supplier State Code
The state must be selected from the latest list given by GSTN
Supplier Pin Code
Locality/district/state of the supplier
Six digit code
Recipient Legal Name
The legal name of the recipient as per the PAN card
GSTIN of the recipient
Max length: 15
Building/Flat no., Road/Street, Locality, etc. of the recipient
Recipient State Code
Place Of Supply State Code
Recipient Pin Code
City/town/village of the recipient
Shipping To GSTIN
GSTIN of the buyer or the person to whom the particular item is being delivered to
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
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
Whether or not the supply of service must be mentioned
Length: 1 (by selecting Y/N)
Details of Goods/ Services
The relevant description for the item in the trade
Max length: 300
Applicable HSN code for particular goods/services
Max length: 8
The unit price, exclusive of GST, before subtracting the item price discount
The price of an item, exclusive of GST, after subtracting the item price discount
The GST rate is represented as a percentage that is applicable to the item being invoiced
IGST Value, CGST Value, and SGST Value
IGST, CGST, and SGST amounts for individual items
Total Invoice Value
The total amount of the Invoice with GST
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.
What is the process of 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.
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.
The next step is to upload the JSON file for each B2B e-invoice along with the IRN over the Invoice Registration Portal (IRP)
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.
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.
The uploaded data will further be auto-populated into the GST Annexure and shared with the e-way bill and the GST system.
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.
Now pause all your e-invoicing worries and prepare yourself for the new e-invoicing limit with Webtel’s e-invoicing solution.
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.
The recent e-invoicing turnover limit is Rs. 20 Cr, this limit will be reduced to Rs. 10 Cr from October 1, 2022
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.
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.
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.
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.
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.
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.