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Compulsory GST e-invoicing for a turnover of 100 crore or more

  • GST Council decided to introduce e-invoicing on voluntary basis.
  • The scheme is introduced in a phased manner.
  • The reporting of only Business to Business (B2B) transactions will be done.
  • The standard of the scheme has been finalised with consultation with Trade / industry body and ICAI as well, on 20th Sept, 2019.
  • Standard ensures e-invoice shared by seller will be read by buyer / bank /agent can be read by machine .
  • Standard eliminate data entry errors and interoperability of data.
  • Standardization ensures sharing of data in the same format but at the same time allows user to continue his software for creating e-invoice.
  • Small taxpayer has option to adopt one of the accounting & billing software empanelled by GSTN portal.
  • Tharticleese softwares are available at free of cost.
  • From 1st January 2020, e-invoicing will be on trial and voluntary for the business having aggregate turnover of ₹500 crore or more
  • From 1st February, it will be on trial and voluntary for the business having aggregate turnover of ₹100 crore or more.
  • From 1st April, it will be voluntary for a Aggregate turnover of less than ₹100 crore.
  • From 1st April, e-invoicing will be mandatory for a business having a Aggregate turnover of ₹100 crore or more.
  • The system is going to be implemented on a central level.
  • It will help SME to take loan instantly.
  • It will reduce reconciliation problems.
  • Banks / Financial institutions can provide advances on the basis of MSME’s rating.
  • This amendment could help to avoid tax evasion.
  • The most important benefit of this e-invoicing system is :
    1. Only one time reporting i.e. No dual reporting in GSTR-1 and e-way bill.
    2. Eliminate fake invoice.
    3. System trail of ITC (Input tax credit) and output tax.
    4. Provide ready data for sale and purchase register.
  • E-invoice generation is responsibility of taxpayer.
  • The generated e-invoice will be passed to invoice registration portal (IRP) within 24 hours.
  • IRP will digitally sign invoice by using it’s private key.
  • After that, it will generate QR code and unique Invoice Reference Number (IRN).
  • Thereafter, the IRP will sent the invoice to the recipient on via mail.
  • The details regarding workflow is discussed in the article.

Some explanation to provide you details :
A) QR Code:

  • QR code containing the unique IRN (hash) & some important parameters of invoice and digital signature so as to be verified on the central portal as well as by an Offline App.
  • This will be helpful for tax officers checking the invoice where Internet may not be available all the time.
  • The web user will get a printable form with all details including QR code.
  • The offline app will be provided on the IRP for anyone to download to authenticate the QR code of the invoice offline and its basic details.
  • However, to see the whole invoice, one will have to connect to the portal and verify and see the details online.
  • The facility to download entire invoice will be provided to tax officers, in the same way it is currently available under E-way bill system.
  • The QR code will consist of the following e-invoice parameters like GSTIN of supplier and recipient, date, number of items with HSN Code, IRN etc

B) Unique Invoice Reference Number (IRN)

  • IRN will be based on the computation of hash of GSTIN of generator of document (invoice or credit note etc.), Year and Document number like invoice number.
  • This hash will be as published in the e-invoice standard and unique for this combination.
  • This way hash will always be the same irrespective of the registrar who processes it.
Author: Niranjan Reddy