What is e-invoice under GST?

Initially when the system was introduced taxpayers were in a misunderstanding that generating e-invoices in GST means generation of invoices in the GST portal. But, e-invoicing means that the taxpayers can generate invoices in their accounting or billing software and the invoices which are generated are to be uploaded in a common portal called ‘Invoice Registration Portal’ (IRP). This is to bring uniformity in trade. This Invoice Registration Portal (IRP) will then generate a unique Invoice Reference Number (IRN) and a quick response code. This system of e-invoicing is applicable only to those companies whose aggregate turnover is above the prescribed limit.

Threshold Limit Type of invoice to be issued as e-invoice
Aggregate Turnover >50Cr. and <500Cr. B2B invoices - Both IRN & QR Code
Aggregate Turnover >500 Cr. B2B invoices - Both IRN & QR Code
B2C invoices - QR Code

The GSTN’s e-invoicing contains the following parts

  • India has adopted the SIMPoL standard for the flow of information during the e-invoicing generation process. It consists of the technical field name, description of each field, whether it is mandatory or not.
  • There are some mandatory fields such as Invoice type, Invoice Number, date of invoice, the bill to state, GSTIN, state code, address, item, taxable value, advance adjusted, total invoice value, GST rate, and tax amount.
  • There are optional fields also as supplier email, phone number, payee name, mode of payment, etc.

E-Invoice template

The template is as per the GST rules and enables the reader to correlate with their invoices. The mandatory fields are marked in green and the optional fields are marked in yellow.

  • Taxpayers are required to generate an electronic invoice on every sale as per their books. Creating such an e-invoice is the responsibility of the taxpayer.
  • The standard format is fixed by the authorities for every business so that proper and correct details are extracted
  • The invoices so generated by the taxpayers are to be submitted in the Invoice Registration Portal (IRP) of GST.
  • IRN – Invoice Reference Number will then, be generated and the invoice has to be signed digitally.
  • Then, a QR code will be generated. This code contains all important information of the sale transaction and the same will be sent to the taxpayer who filed the invoices.
  • The Invoice Registration portal will send a copy of this invoice to the recipient of the sale transaction on the email id provided by the supplier.

Various documents to be reported to the GST system

Apart from the Invoice, a supplier provides various other documents to the recipients. Such documents are also to be reported in Invoice Registration Portal (IRP) Various types of other documents are Debit notes, Credit notes, Bill of supply, or any other such document which are required to be reported by the creator of the document i.e. the supplier.

E-Invoice process

Registered persons can create e-invoice through any of the following modes based on their preferences:

  • First one is using the offline/excel tool
  • Second one is using the API mode – directly or through GSPs.
  • Further, there are two access mechanisms for the e-invoicing system.
    - Web-based access for generation of IRN using the offline/excel based tools.
    - API based access for generation of IRN using the APIs directly or through GSPs.

The Process of E-invoice creation goes as follows:-

Stage-1 – Generation of JSON through invoice
  • Generation of the invoice by the seller in his own accounting or billing system (it can be any software utility/ERP that generates invoice).
  • The invoice must conform to the e-invoice (standards). The supplier should have a feature in his ERP that will create an output of invoice data in JSON format.
  • Those who do not use any accounting or billing software or any IT tool to generate the invoice will be provided with an offline tool to key in data of invoice and then submit the same.
  • The supplier’s software should be capable to generate a JSON of the final invoice that is ready to be uploaded to the IRP. The IRP will only recognize JSON files.
Stage-2 – Uploading of JSON on Invoice Registration Portal (IRP)
  • Seller to upload the JSON of the e-invoice into the IRP.
  • The JSON may be uploaded directly on the IRP or through GSPs or through the third party provided Apps)
Stage-3 – Data validation/approval by IRP
  • If IRN is not generated, then IRP will generate IRN, based on JSON uploaded.
  • If IRN is generated, then IRP will validate the IRN, (Based on JSON uploaded) from the Central Registry of GST System to ensure that the same invoice from the same supplier pertaining to the same Financial Year is not being uploaded again.
  • On receipt of confirmation from the Central Registry, IRP will add its signature on the invoice data as well as a QR code to the JSON.
Stage-4 – E-invoice generation and sharing
  • Sharing the signed e-invoice data along with IRN to the seller.
  • Sharing the signed e-invoice data along with IRN to the GST System as well as to the E-Way bill system will also update the ANX-1 of the seller and ANX-2 of the buyer.
  • The IRP will sign the e-invoice and the e-invoice signed by the IRP will be a valid e-invoice and will be used by the GST/E-Waybill system.
Stage-5 – Providing digitally signed E-invoice back to the Taxpayer
  • Returning the digitally signed JSON with IRN back to the seller along with a QR Code

The registered invoice will also be sent to the seller and buyer on their mail ids as provided in the invoice.

IRP and QR Code

IRP allows invoice registration on the GST system through API mode in addition to other modes.

  • IRP helps to integrate its e-invoicing system to the taxpayer’s business invoicing system.
  • The portal even helps the taxpayer to get the credentials through which he can access APIs. Registration for API access is complete once the OTP is sent on the verified mobile number and email id is entered.
  • IRP provides details related to integrating the business systems to their e-invoice systems through APIs
  • Code extracts and master data are provided to have proper knowledge of logic and concepts.
  • With the help of the portal, developers can improve the performance of APIs by understanding and testing the API methods.

The QR code will enable quick view, validation, and access of the invoices from the GST system. It will be generated by IRP after uploading JSON of invoices. The QR code will consist of the following e-invoice parameters:

  1. GSTIN of the supplier
  2. GSTIN of the recipient
  3. Invoice number as given by the supplier
  4. Date of generation of invoice
  5. Invoice value (taxable value and gross tax)
  6. Number of line items
  7. HSN Code of the main item (the line item having the highest taxable value)
  8. Unique Invoice Reference Number

E-Invoice for B2C Invoices

CBIC (Central Board of Indirect Taxes and Customs) said that the B2C invoices issued by the businesses whose turnover in a financial year above 500 Crores must have a Quick Response code (QR Code) implying that a separate QR Code will be generated for each B2C invoice by the supplier and not through the Invoice Registration Portal.

Other Important updates

For the preparation of e-invoice, the Government has provided common portal which are recognized as Invoice Registration Portal.

Frequently Asked Questions

Q Who is eligible for the e-invoicing?

As previously mentioned, E-invoicing is mandatory for certain notified Taxpayers on the basis of turnover. Currently for Taxpayers with more than 50 Crores of turnover, E-invoicing is mandatory. To check whether E-invoice is applicable on any taxpayer there is an option in the portal under the search menu as ‘Status of Tax Payer’. Select and enter the GSTIN and see the enablement status for the entered taxpayer.

CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.