E-invoicing In GST: A Complete Guide 

The buzz around e-invoicing has grown in prominence within the business sector since the GST council adopted the notion of e-invoicing. The GST council approved the implementation of e-invoices at its 37th meeting in September 2019, with the primary goal of ensuring the interoperability of e-invoices across the GST eco-system.

In October 2020, the Goods and Service Tax (GST) introduced electronic invoices for business-to-business transactions. The minimum requirement was initially set at 500 crores but was later dropped to Rs. 50 crores. 

According to the Central Board of Indirect Taxes and Customs’ official announcement 01/2022, which was released on February 24, 2022, the minimum threshold will be Rs. 20 crore starting April 1, 2022. 

Every business with a turnover under Rs. 20 Crores must generate e-invoicing beginning with the next fiscal year. All enterprises with a turnover of twenty crore rupees or more will be required to use the electronic invoicing system. The system was first introduced in 2020 for B2B transactions, but it has since expanded to include lower-level transactions.

What Is E-Invoice In GST?

The term “e-invoice” refers to an electronic invoice produced by businesses and corporations for the purchase and sale of goods. It establishes a standard structure for creating invoices, and the E-invoice system essentially authenticates business-to-business bills, making the system more user-friendly. The Goods and Services Tax Network authenticate invoices created between two organizations or businesses online.

Every generated invoice receives an identification number from the Goods & Services Tax Network’s Invoice Registration Portal. 

E-invoices under GST have a number of benefits, including automatic reporting of Goods and Service Tax returns and the ability to issue e-way bills or invoices when needed. These two benefits combine to simplify transaction procedures and lower the cost of the billing process.

What Are The Requirements For Creating An E-Invoice?

The following are the requirements for creating e-invoices:

  • The individual who creates an e-invoice must be registered with the GST portal as well as the e-invoice or e-way bill portal.
  • He should have a proper document to report with him, such as an invoice, debit note, or credit note.
  • If the taxpayer is creating e-invoices in bulk, he should have a valid JSON file that conforms to the e-invoice schema, or his ERP system should be integrated with APIs.

Who Will Be Affected By E-Invoicing?

GST registered persons with an annual turnover of more than Rs.50 crore are required to use the e-invoicing system. It will apply to those with a turnover of greater than Rs.20 crore as of April 1, 2022. 

Special Economic Zones (SEZ) units, insurance, banking, financial institutions, NBFCs, GTA, passenger transportation service, and cinema ticket sales are all exceptions. Special Economic Zones (SEZ) units, insurance, banking, financial institutions, NBFCs, GTA, passenger transportation service, and cinema ticket sales are all exceptions.

How Will The E-Invoicing System Be Linked To GST Returns?

Only until an e-Invoice has been authenticated and registered by the invoice registration system will it be put into the appropriate GST return. The taxpayer will be able to view and change the validation results in the GSTR-1 return once it has been completed. The data from the supplier’s GSTR-1 return will be auto-populated into the recipient’s (buyer’s) GSTR-2A/2B/4A or 6A, depending on the situation.

The tax department’s main goal is to enable pre-population of GST returns, which will eliminate reconciliation issues. Following the implementation of e-Invoicing, the data from the invoices can be pre-populated into the necessary tables of the tax returns, eliminating the need for new data entry.

Benefits Of Companies Using E-Invoicing Initiated By GSTN

benefits-of-using-e-invoicing

What Role Will E-Invoicing Play In Preventing Tax Evasion?

In the following ways, it will aid in the prevention of tax evasion:

  • Since the e-invoice must be issued through the GST system, tax officials will have access to transactions as they occur in real time.
  • Invoices are generated prior to completing a transaction, there will be less room for manipulation.
  • All invoices must be generated through the GST system, it would decrease the likelihood of false GST invoices and allow only the legitimate input tax credit to be claimed. GSTN can track false tax credit claims easier now that input credit may be connected with output tax facts.

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Is It Possible To Partially Or Completely Cancel An E-Invoice?

An e-invoice cannot be partially canceled, but it can be completely canceled. It must be submitted to the IRN within 24 hours of cancellation. Any subsequent attempts to cancel must be done manually on the GST portal before the returns are filed, as this cannot be done on the IRN.

What Distinguishes E-invoicing From Current Invoicing Practices?

E-invoice is a system that requires the invoice to be electronically uploaded and authenticated using a unique invoice reference number (IRN) and a digitally signed QR code. The difference is that before sending the invoice to the buyer, the seller must print the QR code and IRN number on it.

Businesses who use ERP/business management software that integrates with the IRP system and prints the QR code and IRN on the invoice automatically will find it simple to manage e-invoice requirements without making significant modifications to their business processes.

What Papers Must Be Reported To The GST System?

The following documents are included in the e-invoice idea. This means that the document’s creator must upload it to the IRP system.

  • Supplier’s Invoice
  • Supplier’s Credit Note
  • Recipient’s Debit Note 
  • Any other document that is required by law to be disclosed by the document’s originator

Different Modes Of Generating E-Invoice?

Multiple modes will be offered, allowing the taxpayer to select the best option based on his or her needs. Following are the modes of generating E-Invoice:

  • Refrens
  • API based
  • SMS based
  • GSP based
  • Offline tool
  • Mobile App

Will the GST Portal Have The Option To Generate E-Invoices?

No, invoices will continue to be created by firms using their present ERP software. The invoice must be formatted according to the e-invoicing standard and include the required characteristics. At this time, there are no plans to generate bills directly on a shared platform.

What Are The Salient Features Of E-Invoice Rule For Corporates? 

As per the new invoice rule by CBIC, B2B Service providers will have to generate Invoices in a standard format which will be electronically authenticated by GSTN for further use on the common GSTN portal and eWay portal. 

  1. It does not mean that the invoices have to be generated from the tax department portal. This will have no impact on how one sees an invoice in its physical or electronic form.
  2. It only specifies a standard invoice format (Schema) to ensure interoperability among various software and business/tax systems.
  3. An invoice generated in this standard format will have to be reported to the Invoice Registration Portal of the GST. The portal will generate an IRN (Invoice Reference Number), digitally sign the invoice and generate a common QR Code.
  4. QR Code will have the vital parameters of the Invoice and it will be sent to the IRN generator.
  5. The signed copy of the E-Invoice will also be sent to the recipient of the invoice basis the email ID mentioned there.
  6. Since the Invoice is already registered at the IRP, information is sent to the GST Portal and eWay portal in run time thus eliminating any manual intervention earlier required for filing or reconciliation.

Why Choose Refrens?

For small enterprises and freelancers, Refrens provides simple, easy-to-understand, and rapid billing software. GST invoices from Refrens are specifically suited for Indian markets. Our online bill generator takes care of everything for you, including creating and managing invoices, recurring bills, and collecting payments, among other things.

Simply put in the relevant information to generate invoices in a matter of seconds. With an online GST invoice generator, you can create professional GST invoices in a matter of seconds, even if you have no prior knowledge of GST. Create a personal brand by including a personal logo, digital signature, terms, and attachments such as files and photographs, among other things. The user-friendly layout makes it easy to keep track of all your invoices in one spot.

Not only does Refrens’ online GST bill generator enable GST invoicing, but it also supports over 200 countries and different currencies, including the rarest of the rare. If your company has international clients, you can change the currency on e-invoices with a single click. Refrens makes it simple to create GST e-invoices and generate your e-invoice IRN in seconds.

With Refrens GST bill generator, you may receive online payments faster. You can accept online payments in a variety of ways, including UPI, Net Banking, Debit/Credit cards, and more. Refrens is currently one of India’s most trusted platforms for receiving overseas payments. All payouts are completed within two business days.

The online bill generator allows you to email invoices to clients, download bills as PDFs, and print invoices. Not only that, but you can also share the link or use WhatsApp to do so (after copying the link).

The best part is that Refrens GST Invoice Maker is completely free of charge. There is no cost to register or join. There are no hidden fees. There are no restrictions.

Start making your e-invoice now! 

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