What is GST e-invoicing and how does it help businesses?

There is a flurry of activity in the accounting departments of large companies as they get their staff and systems ready for another significant change in GST from October 1 — e-invoicing. Most people concur that the idea is good and it will ease GST operations going forward. But many are also questioning the need to bring about this change at a time when the country is grappling with a deadly virus.

Here’s an FAQ, sourced from the GSTN website, to help you understand this change.

Also read: GST e-invoicing to start from Oct 1, as planned: GSTN CEO

E-invoicing involves reporting details of specified GST documents to a government-notified portal and obtaining a reference number. It doesn’t mean generation of invoice by a government portal.

E-invoicing was to be implemented in a phased manner from April 1, 2020. But the date was later pushed to October 1.

GST invoices, credit notes and debit notes in respect of B2B supplies and exports are to be uploaded.

Only taxpayers with aggregate turnover (based on PAN) in a financial year exceeding ₹500 crore have to generate e-invoices for B2B transactions.

Exempted categories are SEZ units, insurance, banking (including NBFCs), goods transport agency (transporting goods by road in goods carriage), passenger transport services and multiplex cinema admissions.

Taxpayers will continue to create their GST invoices on their own accounting/billing/ERP systems. These invoices will now be reported to an Invoice Registration Portal (IRP). IRP will return a signed e-invoice with a unique Invoice Reference Number (IRN) along with a QR code. Then, the invoice (with QR code) can be issued to the receiver. A GST invoice will be valid only with a valid IRN.

E-invoice has many advantages for businesses such as standardisation, inter-operability, auto-population of invoice details into GST return and other forms (like e-way bill), reduction in processing costs, reduction in disputes, improvement in payment cycles and thereby improvement in overall business efficiency.

As mentioned earlier, businesses will continue to issue invoices as they are doing now. Necessary changes on account of e-invoicing requirement (to enable reporting of invoices to IRP and obtaining 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.

Multiple modes of reporting e-invoice will be made available so that a taxpayer can choose one based on his/her need — API based, mobile app based, offline tool based and GSP based.

For further details, visit https://einvoice1.gst.gov.in

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