GST council had implemented this e-invoicing feature in its 35th meeting which applies to the special category of individuals. Many people misunderstood this term as generation of invoice on GST portal but this is not so. E-invoice is a process of submission of already generated invoices on an e-invoice portal.
E-Invoicing in detail is the system that authenticates B2B invoices electronically for further use of such invoices on the GST portal. A unique identification number will be issued on the E-invoicing portal to every invoice which will be further used by the GST portal. You can say all information will be transferred to GST and E-way bill portal from E-invoicing portal that further eliminates the need for manual data entry while filing GST returns and generating e-way bills.
E-invoice cannot be canceled partially. If you want to cancel it, you need to cancel it completely and reported it within 24 hours into IRN. The manual cancellation is required thereafter on the GST portal and it should be done before the filing of returns. The invoices cannot be uploaded in bulk into IRP. It must be uploaded one at a time. The documents that need to be reported into IRP are Invoices by the supplier, credit notes, debit notes, and all other documents prescribed under GST law to be reported as an e-invoice.
E-Invoicing Applicability
If your business turnover is more than 50 crores during any of the preceding financial years from 2017-18 onwards, e-invoicing applies to your business. The limit was 500 crores initially which further changed to 100 crores and now this limit has been finalized at 50 crores. However, there are certain categories of business where E-invoicing is not applicable irrespective of the turnover limit. Following are the business categories:
- Goods Transport Agency
- SEZ unit
- Government department and Local authority
- Banking companies or insurers or financial institutions including NBFC
- Passenger transportation service
- Services provided in multiplex related to Exhibition of cinematographic films
Is E-Invoicing Beneficial?
Yes, E-Invoicing is very beneficial to every business. Let’s discuss its benefits in detail:
- Data under GSTR-1 will be ready at the timing of filing return if the E-invoicing system is followed
- Generation of E-way bills becomes easy using data filled under the E-invoicing system.
- Frauds will be reduced as tax authorities will have real access to all the data. Also, there will be no fake GST invoices
- Data reconciliation is less required between GST returns and books and input tax credit verification issues will also be reduced
- Only one-time reporting of B2B invoices is required. There is no need of reporting in multiple formats.
E-Invoicing if applicable must be followed properly. It will reduce a lot’s effort and time of the taxpayer. All the data will be reconciled automatically and auto-filled on all portals.