E-INVOICE UNDER GST

[Mr. M. GOVINDARAJAN]

Issuing of invoice

Rule 48 of Central Goods and Services Tax Rules, 2017 (‘Rules’ for short) provides the method of issuing invoice in business for the purposes of GST.  Form GSTR -1 is prescribed for the invoice.  Rule 48 provides that the invoice in respect of supply of the goods shall be prepared in triplicate and in respect of supply of services the invoice shall be prepared in duplicate.    The serial number of invoices issued during a tax period shall be furnished electronically through the common portal in Form GSTR-1.

E-invoice

Rule 48 (4), (5) and (6) are inserted vide Notification No. 68/2019, dated 13.12.2019.  The newly inserted Rule 48(4) provides that the invoice shall be prepared by such class of registered persons as may be notified by the Government, on the recommendations of the Council, by including such particulars contained in FORM GST INV-01 after obtaining an Invoice Reference Number by uploading information contained therein on the Common Goods and Services Tax Electronic Portal in such manner and subject to such conditions and restrictions as may be specified in the notification.

Mandatory issue of E-invoice

The generation of e-invoice is mandatory for certain class of taxpayers, as notified by the Government.  The limits of the aggregate turnover of the registered persons who are required to issue E-invoice are revised now and then.

• With effect from 01.10.2020 – Aggregate turnover ₹ 500 crores and above;
• With effect from 01.01.2021 – Aggregate turnover ₹ 100 crores and above;
• With effect from 01.04.2021 – Aggregate turnover of ₹ 50 crores and above;
• With effect from 01.04.2022 – Aggregate turnover of ₹ 20 crores and above.

The expression ‘aggregate turnover’ is defined under section 2(6) of the Goods and Services Tax Act, 2017.   The aggregate turnover is-

• the aggregate value of all taxable supplies;
• exempt supplies;
• export of goods or services or both; and
• inter-State supplies of persons having the same PAN.

The value of inward supplies on which tax is payable by a person on reverse charge basis is to be excluded in calculating the aggregate turnover.

Exemption

A proviso is inserted to Rule 48(4) vide Notification No. 72/2020-Central Tax, dated 30.09.2020.  The said proviso provides that the Commissioner may, on the recommendations of the Council, by notification, exempt a person or a class of registered persons from issuance of invoice under this sub-rule for a specified period, subject to such conditions and restrictions as may be specified in the said notification.  The following are exempted from issuing of E-invoice-

• Government Departments;
• A local Authority;
• Special Economic Zones;
• Goods Transport Agency supplying services in relation to transportation of goods by road;
• An insurer or a banking company or a financial institution including a Non Banking Financial Corporation;
• Supplying  passenger transportation service;
• Supplying services by way of admission to exhibition of cinematograph films in multiplex screens.

Issue of E-Invoice

The E-Invoice shall be generated for the transaction with registered persons (B2B transactions) and exports transactions.  The transactions with unregistered persons are not required to generate E-Invoice.    No E-Invoice is required to be generated for the exempted supply of goods or services or both and also for NIL rated supply.  If there is supply of both taxable and exempted/NIL rated goods then E-Invoice shall be required to be issued.  Invoices, credit notes and debit notes are covered under E-Invoice scheme.

The taxpayers are required to prepare & issue their e-invoices by reporting their invoice data in the prescribed format (e-invoice schema in FORM GST INV-01) and reporting the same on the Invoice Registration Portal (IRP). Invoices reported successfully on the IRP are given a unique Invoice Reference Number (IRN).

Generation of E-Invoice

The e-Invoice System is for GST registered person for uploading all the B2B invoices to the Invoice Registration Portal (IRP). The IRP generates and returns a unique Invoice Reference Number (IRN), digitally signed e-invoice and QR code to the user.

The following are the official websites notified by the Government for generation of E-Invoice-

• www.einvoice1.gst.gov.in
• www.einvoice2.gst.gov.in
• www.einvoice3.gst.gov.in
• www.einvoice4.gst.gov.in
• www.einvoice5.gst.gov.in
• www.einvoice6.gst.gov.in
• www.einvoice7.gst.gov.in
• www.einvoice8.gst.gov.in
• www.einvoice9.gst.gov.in
• www.einvoice10.gst.gov.in

Contents

The following are required to be uploaded in E-Invoice Portal-

• Details of recipient (billed to);
• Details of consignee (shipped to);
• GSTIN or UIN, if available;
• Name;
• Address;
• State (Name and code)
• Type of supply-

• B to B supply;
• B to C supply;
• Attracts Reverse Charge;
• Attracts TCS;
• Attracts TDS;
• Export;
• Supplies made to SEZ;
• Deemed Export.

The following are also required to be uploaded-

• Description of goods
• HSN
• Quantity;
• Unit;
• Price per unit;
• Total Value;
• Discount;
• Taxable Value (if any);
• Central Tax;
• State/Union Tax;
• Integrated Tax;
• Cess;
• Total invoice value (in figure and in words)

Features of E-Invoice

• Simple and user friendly form;
• Provision to operate in offline mode;
• Generate/cancel/print e-invoice;
• Generate e-way bills;
• Back up/restoration of data;
• Creation of masters.

Invoice Reference Number

The Invoice Reference Number (IRN) is a 64-digit along alphanumeric number to uniquely identify each B2B Invoice issued in India.  It is a  is a unique number allotted by Government to tag and identify every valid e-invoice generated in India, 

• Each Invoice uploaded by the tax payer will get the unique number called as Invoice Reference Number (IRN).
• IRN is of 64 Characters length. 
• This QR Code will enable quick view, validation and access of the invoices from the GST system from hand held devices.
• This IRN is unique number in the GST system, irrespective of tax payer, financial year and document type.
• IRN is generated by the e-invoice system once the tax payer uploads the invoice details.
• IRN is generated using the computer algorithm (RSA256) based on the combination of the Supplier GSTIN, Document Type, Document Number and year of the Invoice (Financial Year).
• IRN is hash of Supplier GSTIN + Fin. Year + Doc Type + Doc Number.
• Financial Year is calculated based on the date of invoice. That is, the financial year starts with 1st April and ends on 31st March and represented as YYYY-YY. If the date is 03.01.2020, the financial year is 2019-20.
• Document types are INV for Invoice, CRN for Credit Note, DBN for Debit Note.
• Document Number is a number printed on the Document, being issued to the purchaser, and it is to be of maximum of 16 alphanumeric and / -.
• Document number should not be starting with 0, / and -. Also, alphabets in document number should not have alphabets in lower cases. If so, then request is rejected.

Benefits

The following are the benefits available in the preparation E-Invoices-

• One time reporting reduces the reporting in multiple formats.
• E-way bills can also be generated.
• Better management and automation of tax filing process.
• Seamless reconciliation.
• Standardization and automation.
• Elimination of fake invoices.
• Environment friendly.

Cancellation of E-Invoice

Once an IRN is cancelled the same invoice number cannot be used again to generate another invoice.  If the second invoice is generated it will be rejected by the system.

Documents reported earlier on the Invoice Registration Portal (IRP) can be cancelled within a specified period on the IRP. Upon cancellation, the cancellation data flows to GST system and all cancelled document(s) which were appearing as saved documents in GSTR-1 are deleted from the GSTR-1. The status of the document will be updated in the Excel file, from Valid to Cancelled. In the following scenarios, the document status is updated in the Excel file upon cancellation on IRP, even if no further action is possible in GSTR-1-

• GSTR-1 is already filed
• Document edited manually by the taxpayer.
• Document edited by the taxpayer.
• Document not auto-populated due to error in auto-population.

Auto population in GSTR – 1

The documents (invoices, debit notes, credit notes) reported on the IRP are then transmitted electronically to the GST system and are auto-populated in the respective tables of GSTR-1.   The tax-period of GSTR-1 in which the e-invoice will be auto-populated will be as per the Document Date, irrespective of the date on which the document (invoice, debit note, credit note) was reported on the IRP & the IRN was generated (Date of Generation).

If the taxpayer reports the document (invoice, debit note, credit note) on the IRP after filing GSTR-1 for that period, then the e-invoice will not be auto-populated in any subsequent GSTR-1.

Consequences for non issuing E-Invoice

Rule 48(5) provides that every invoice issued by a person to whom sub-rule (4) applies in any manner other than the manner specified in the said sub-rule shall not be treated as an invoice. 

Section 122 (1)(i)  of the Act provides for penalty for non issue of invoice.  The said section provides that where a taxable person who supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any such supply he shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax evaded.

Non issue of E-Invoice may also result in detention and seizure while the goods are in transit under section 129 of the Act.

The input tax credit cannot be taken by the recipient of goods since no invoice is there.