Businesses with a turnover of INR 100 Cr. and above are require to comply with E-invoicing effective from 1st January, 2021
Electronic invoicing (e-Invoicing) is the exchange of the invoice document between a supplier and a buyer in an integrated electronic format. It is a system in which all B2B invoices are electronically uploaded and authenticated by the designated portal..
It’s now mandate to upload Invoices to Invoice Registration Portal (IRP) and generate Invoice Reference Number (IRN) for Corporates with 100 Crore and above turnover from 1st January, 2021, Business need to be fully equipped to be able to connect to GSTN using JSON API with their Enterprise solutions for e.g. Microsoft Dynamics NAV/AX/D365 to ensure seamless, accurate exchange of required information from seller and consumer both.
Rules of E-Invoicing
- Turnover more than 100crores.
- Document Type B2B, B2G, Export through E-commerce operators & Reverse charge transactions.
- Documents types covered under e-invoicing – Invoices, Debit Note, Credit Note.
- Data transmission will be from software to software. No manual option is will be available.
Benefits of E-Invoicing
- Purchaser get the IRN no. as sons as it is billed from supplier.
- Prevent errors, loses and frauds.
- Improve supplier and customer relationship.
- Automation of GSTR1 AND 2A RECONCILATION creation
- QR code base scanning
- Standard reporting format across all organization.
- Auto generation of data for Tax filling purposes.
- Single document to satisfy all the statutory requirement like e-way bills etc.
- System level matching of Input and output tax to reduce reconciliation efforts.
Things to know about E-Invoicing
- The e-invoice created by Taxpayers on there own ERP Systems will be reported on Invoice Reference Portals(IRP).
- IRP will generate a unique Invoice Reference Number(IRN) which will be attached on the e-invoice & system will digitally sign the same.
- IRP will also generate a QR Code containing the unique IRN with some important parameters of invoice
Key Component of E-Invoicing
- Data exchange is based on standard format designed by GSTN using JSON format, making it standard both in content as well as technology.
- GSP stands for (GST Suvidha Provider). A GSP is a service provider who helps the taxpayer to comply with the provisions of the GST law through its web platform. Goods and Service Tax Network (GSTN) will receive the returns filed by companies through GST Suvidha Provider.
- GSTN has been created by the private company that is officially authorized by the government. The State and Central Government collectively hold a 51% share. The main objective of creating GSTN is to develop, render and maintain IT infrastructure facilities and services to the Central Government and State Government, Tax Payers and other stakeholders for the implementation of GST.
- APIs will be provided by GSPs as well as Directly by GSTN.
- The Invoice Reference Number (IRN) is a unique number generated by the Invoice Registration Portal (IRP) using a hash generation algorithm, under the new e-invoicing system. For every document such as an invoice or debit or credit note to be submitted on the GST portal/e-way bill portal, an invoice reference number shall be generated.
- Requirement of Digital Signature by e-invoice Registration Portal.
- The IRP will also generate a QR code containing the unique IRN (hash) along with some important parameters of invoice and digital signature so that it can be verified on the central portal as well as by an Offline App.
- Cancellation of an E-invoice is possible. This will have to be reported to IRN within 24 hours. Any cancellation after 24hrs could not be possible on IRN, however one can manually cancel the same on the GST portal before filing the returns.