E-Invoicing in GST: Basic Aspects and Notifications Issued Till Date

What is E-Invoicing?

As per Rule 48(4) of the CGST Rules, 2017, notified class of registered persons (as notified by issuing notifications from time to time) have to prepare invoice by uploading specified particulars of invoice in Form GST INV-01 on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN).

How is E-Invoicing is different than present system?

There is no significant difference between the two.

Registered persons will continue to create their GST invoices from their own software. However, they will be required to follow a process through Invoice Registration Portal which is as follows:

 The invoices will be reported to Invoice Registration Portal (IRP)

 On IRP, the invoice shall be digitally signed and the registered person shall add a QR code to the invoice. After this, IRP returns the e-invoice with a unique Invoice Reference Number (IRN).

 Now, the invoice can be issued to the receiver (along-with QR Code).

Note: A GST invoice will be valid only with a valid IRN in this case.

You can understand the process through image as attached below:

What are the legal provisions governing e-invoice?

 Notification No. 68/2019- Central Tax Dated 13/12/2019:

 Notified Central Goods and Services Tax (Eighth Amendment) Rules.

 Inserted new sub-rules in Rule 48 of the CGST Rules:

(4) 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.

(5) 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.

(6) The provisions of sub-rules (1) and (2) shall not apply to an invoice prepared in the manner specified in sub-rule (4).

 Notification No. 69/2019- Central Tax Dated 13/12/2019:

 Notified 10 Common Goods and Services Tax Electronic Portals for the purpose of preparation of invoice in terms of rule 48 (4).

 Notification No. 70/2019- Central Tax Dated 13/12/2019:

 Notified registered persons whose aggregate turnover in a financial year exceeds Rs. 100 crore, as a class of registered person who shall prepare invoice in terms of Rule 48(4) of the CGST Rules.

 Notification to come into force from 01/04/2020.

(This notification superseded by Notification No. 13/2020- Central Tax Dated 21/03/2020.)

 Notification No. 02/2020- Central Tax Dated 01/01/2020:

 Substituted Form GST INV-1 as e-invoice schema.

(Schema further amended vide Notification No. 60/2020- Central Tax Dated 30/07/2020.)

 Notification No. 13/2020 Central Tax Dated 21/03/2020:

 Superseded Notification No. 70/2019- Central Tax Dated 13/12/2019.

 Notification to come into force from 01/10/2020.

(This notification amended by Notification No. 61/2020- Central Tax Dated 30/07/2020, Notification No. 88/2020- Central Tax Dated 10/11/2020 and Notification No. 05/2021- Central Tax Dated 08/03/2021.)

 Notification No. 60/2020- Central Tax Dated 30/07/2020:

 Notified Central Goods and Services Tax (Ninth Amendment) Rules, 2020.

 Notified revised schema for Form GST INV-1.

 Notification No. 61/2020- Central Tax Dated 30/07/2020:

 Amended Notification No. 13/2020- Central Tax Dated 21/03/2020.

 Special Economic Zone (SEZ) Units also excluded from e-invoicing mandate.

 Aggregate turnover required for e-invoice enhanced from Rs. 100 to Rs. 500 crore.

 Notification No. 70/2020- Central Tax Dated 30/09/2020:

 The words “a financial year” in Notification No. 13/2020- Central Tax Dated 21/03/2020 substituted with “any preceding financial year from 2017-18 onwards.”

 Invoices for exports also included in e-invoicing mandate.

 Notification No. 72/2020- Central Tax Dated 30/09/2020:

 Inserted Clause (r) in Rule 46 of the CGST Rules:

(r) Quick Reference (QR) Code, having embedded Invoice Reference
Number (IRN) in it, in case invoice has been issued in the manner prescribed
under sub-rule (4) of rule 48.

 Proviso inserted in rule 48(4) of the CGST Rules:

Provided 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.

 Rule 138A(2) substituted:

(2) In case, invoice is issued in the manner prescribed under sub rule (4) of rule 48, the Quick Reference (QR) Code having an embedded Invoice Reference Number (IRN) in it, may be produced electronically, for verification by the proper officer in lieu of the physical copy of such tax invoice.

 Notification No. 88/2020- Central Tax Dated 10/11/2020:

 Amended Notification No. 13/2020- Central Tax Dated 21/03/2020.

 Aggregate turnover required for e-invoice reduced from Rs. 500 to Rs. 100
crore.

 Notification to come into force from 01/01/2021.

 Notification No. 05/2021- Central Tax Dated 08/03/2021:

 Amended Notification No. 13/2020- Central Tax Dated 21/03/2020.

 Aggregate turnover required for e-invoice reduced from Rs. 100 to Rs. 50
crore.

 Notification to come into force from 01/04/2021.

What are the advantages of e-invoice for businesses?

E-invoice has many advantages for businesses such as Auto-reporting of invoices into GST return, auto-generation of e-way bill (where required).

e-invoicing will also facilitate standardisation and inter-operability leading to reduction of disputes among transacting parties, improve payment cycles, reduction of processing costs and thereby greatly improving overall business efficiency.

What businesses need to do?

Businesses will continue to issue invoices as they are doing now. Necessary changes on account of e-invoicing requirement (i.e. to enable reporting of invoices to IRP and obtain IRN), will be made by ERP/ Accounting and Billing Software providers in their respective software. They need to get the updated version having this facility.

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