The implementation of electronic invoices (e-Invoices) in GST was suggested by the GST Council at its 37th meeting on September 20, 2019. E-invoicing is undergoing a phased implementation by the GST council.
This document covers
- What is E-Invoicing
- Advantages of E-Invoicing
- Persons mandatorily required to issue e-invoice
- Persons not required /exempted from e-invoicing
- Documents covered under e-invoicing
1. What is E-Invoicing
- E Invoicing means the taxpayers will create their GST invoices on their own Accounting/Billing/ERP systems as per e-invoice scheme.
- These invoices will now be reported to “Invoice Registration Portal (IRP)” in a standard format called “schema” and notified as Form GST INV-1
- In other words, e-invoicing means reporting details of specified GST documents to a government notified portal and obtaining a reference number.
- E-Invoicing does not mean generation of invoice by a government portal.
2. Advantages of E-Invoicing
There are various advantages with E-Invoicing. They are
- Auto Reporting of invoices into GST return and auto generation of e way bill (where ever required)
- GSTR 1 can also auto populated with the e-invoice data.
- Substantial reduction in transcription errors as the same data will get transmitted to GST department and the buyer. It will help the buyer to reconcile the same with his purchase order.
- E-Invoicing will facilitate standardisation and inter-operability which leads to reduction of disputes among transaction parties, improve payment cycles, reduction of processing costs which ultimately results in overall business efficiency
- E-Invoicing will enable the system level matching of input tax credit and output tax which reduces the tax evasion. This is possible as a complete trail of B2B invoices is available with the GST department.
- E-Invoicing will eliminate the fake invoices. It will help in reducing the number of fraud cases as the tax officials will have real time data.
3. Persons mandatorily required to issue e-invoice
The following persons are required to issue e-invoice mandatorily.
Registered persons whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds Rs 5 crore w.e.f 01 st Aug 2023 in respect of B2B supplies (supply of goods or services or both to a registered person) and for exports
Turnover criteria for e-invoicing limit
|Phase||Date of Applicability||Turnover Threshold|
|1||01st August 2023||Rs 5 Crores|
|2||01st October 2022||Rs 10 Crores|
|3||01st April 2022||Rs 20 Crores|
|4||01st April 2021||Rs 50 Crores|
|5||01st January 2021||Rs 100 Crores|
|6||01st October 2020||Rs 500 Crores|
Note :The turnover needs to be considered is turnover of all GSTIN under a single PAN across India
4. Persons not required /exempted from e-invoicing
The following persons are not required to register under e-invoicing.
- Special Economic Zone units (SEZ) (Only Sez units are exempted and this is not applicable for SEZ Developers)
- Banking Company or a Financial institution or insurer including NBFC.
- Goods Transport agency supplying services in relation to transportation of goods by road in a goods carriage.
- Suppliers of Passenger Transportation service
- Suppliers of services by way of admission to exhibition of cinematographic films in multiplex screens
- Government Department and Local Authority
5. Documents covered under e-invoicing
The following documents are covered under e-invoicing.
- Credit Notes
- Debit Notes
Note 1 : Supplies to registered persons(B2B), Supplies to SEZs (with/without payment), Exports (with/without payment), Deemed Exports by notified class of taxpayers are currently under e-invoicing.
Note 2 : E-invoicing is not applicable for Nil rated supplies or wholly exempt supplies as bill of supply is issued for them
Note 3 : E Invoicing is not applicable for Import Bill of Entry also