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EVERY ASPECT OF E-INVOICE UNDER GST

An overview of e-invoice under GST

1A. BACKGROUND

  • The GST Council has approved 'E-invoicing' in a phased manner for reporting of B2B invoices from 1st January 2020 on voluntary basis.
  • Generation of invoice in a standard format is required so that invoice generated from one software can be read by another software.
  • Invoice Registration Portal ('IRP') will report e-invoices to the GST portal/ system automatically.
  • The basic aim of e-invoice system is ability to pre-populate the GST return and to reduce the reconciliation problems of input credit.
  • Threshold requirement for E-invoicing applicability will be notified by the government at the time of roll-out.

1B. INTRODUCTION

  • E-invoice does not mean generation of invoices from GST portal of government.
  • It is required to standardize the format in which data of an Invoice will be shared with others to ensure there is interoperability of the data.
  • Existing software of the organization are required to adopt the new e-invoice standards wherein they would re-align their data access and retrieval in the standard format to generate E-invoices. Please refer Annexure A for E-invoice standards.
  • The registration of an E-invoice will only be possible once all the mandatory fields are uploaded in IRP.

1C. OTHER BENEFITS

  • One time reporting of B2B invoice data by the supplier. It will reduce reporting in multiple formats (GSTR-1/ E-way bill).
  • Substantial reduction in input credit verification issues as same data will get reported to tax department as well to buyer.
  • It will facilitate automatic preparation of GST Returns (ANX 1 and ANX 2
  • Complete trail of B2B invoices will be available
  • Elimination of fake invoices from the industry

2. FEATURES OF AN E-INVOICE

  1. Unique invoice reference number ('IRN') - IRN will be based on 3 parameters like Supplier GSTIN, invoice no. and financial year.
  2. Digitally signed - IRP will sign invoice digitally with the private key of the IRP. Only signed E-invoice will be a valid invoice and used by GST/ E-way bill system.
  3. QR code - IRP will generate QR code containing IRN along with some important parameters. Please refer Annexure B for the parameters. This is like a bar code helpful for the tax officers to check the invoice where internet may not be available.
  4. Offline App - The offline app will be provided on the IRP for anyone to download to authenticate the QR code of the invoice offline and its basic details.
  5. Multiple IRP - Multiple IRP will be there to ensure 24 X 7 operations without any break. National Informatics center ('NIC') will be the first IRP.
  6. Standardization - A technical group of GST council has drafted standards for e-invoice after consultation with the industry.
  7. Modes to generate invoices - Multiple modes are available to generate invoices through IRP like web / API / SMS / Mobile App / Offline tool / GSP.
  8. Printing of invoices - The suppliers can continue to print his paper invoice as they are doing today including logo and other information.

3. WORK FLOW TO GENERATE E-INVOICE

Step 1 - Invoice will be generated by the supplier in his own accounting or billing system

  • The invoice must conform to the e-invoice standards and have the mandatory parameters.
  • The optional parameters can be incorporated in the invoice according to the business need of the supplier.

Step 2 - JSON file will be generated by the supplier to upload on the IRP. The IRP will only take JSON file of the e-invoice.

Step 3 (Optional) - Unique Invoice Reference Number ('IRN') can be generated by the supplier on the basis of 3 parameters like Supplier GSTIN, invoice number and financial year.

Step 4 - Supplier will upload the JSON file of the e-invoice along with IRN already generated directly on the IRP or through GSPs.

Step 5 - IRP will generate IRN and validate IRN of JSON if already uploaded by the supplier. IRP will add its signature on the invoice data as well as a QR code to the JSON.

Step 6 - Supplier will download digitally signed JSON with IRN along with a QR code. IRP will share back digitally signed e-invoice for record of supplier.

Notes:

1) QR code is a bar code which will contain GSTIN of seller and buyer, invoice number, invoice date, number of line items, HSN, invoice reference number etc.

2) Once supplier uploads JSON file on the IRP, invoices will be registered immediately on real time basis.

3) IRP will sent E-invoice to the seller and buyer on their mail ids mentioned on the invoices.

4. OTHER IMPORTANT POINTS

  • Supplier should have a utility that will output invoice data in JSON format, either from his accounting or billing software or his ERP or excel/word document or even a mobile app. Those who do not use any accounting software or IT tool to generate the invoice, they will be provided an offline tool to key-in data of invoice and then submit the same.
  • The small and medium size taxpayers (having annual turnover below Rs 1.5 Crores) can avail accounting and billing system being offered by GSTN free of cost.
  • GSTN will provide Offline Tool where data of an invoice, generated on paper can be entered which in turn will create JSON file for uploading on the IRP.
  • The mandatory fields are those fields that must be there for an invoice to be valid under e-invoice standards. The optional ones are those that may be needed for the specific business needs of the seller.
  • The registration of an e-invoice will only be possible all the mandatory fields uploaded into the IRP.
  • Once an invoice is registered on the IRP, it is not required to be signed by someone else.
  • In case of API mode of invoice generation -The big tax payers and accounting software providers can interface their systems and pull the IRN after passing the relevant invoice information in JSON format. API request will handle one invoice request at time to generate the IRN. This mode will also be used for bulk requirement (user can pass the request one after the other and get the IRN response within fraction of second) as well. The e-way bill system provides the same methodology.
  • IInvoices have to be uploaded on IRP one at a time. The IRP should be able to handle a large sequence of invoices for registration and validate them. Essentially bulk upload will be required by large taxpayers who generate large number of invoices. Their ERP or accounting system will have to be designed in such a way that it makes request one by one. For the user, it will not make any difference.
 

ANNEXURE A - E-INVOICE STANDARDS - MANDATROY FIELDS OF E-INVOICE

  

Sr. No.

Category

Small Description of the field

Sample Value of the field

Description

1

General

Version number

1.0

It is the version of schema . It will be used to keep track of version of Invoice specification.

2

& Invoice Reference Number

649b01ft

It will be generated by IRP

3

Code for Invoice type

Reg/SEZP/SEZWP/EXP/EXPWP/DEXP

This will be the code to identify type of invoice.

4

Invoice number

Sa/1/2019

IIt will be as per invoice number rule mentioned in CGST/SGST rule. It cannot exceed 16 digits

5

Invoice Date

21-07-19

The date when the Invoice was issued. Format "YYYY-MM-DD"

6

SSupplier Information

Supplier_Legal_Name

The Institute of Chartered Accountants of India

Name as appearing in PAN of the Supplier

7

GSTIN of the Supplier

29AADFV7589C1ZO

GSTIN of the supplier

8

Supplier address1

Vasanth Nagar

Address of the Supplier

9

Place

Karnataka

State of the Supplier

110

Pincode

560087

Pin code of the Supplier

11

Buyer Details

Buyer Legal name

Adarsha

Trade name of buyer

12

GSTIN

29AACCR7832C1ZD

GSTIN of the Buyer

13

State code

29

Place of supply code of Supply

14

Address1

Address

Address of the Buyer

15

Place

Bangalore

State of the Buyer

116

Pin code

560002

Pincode of the Buyer

17

Payment Information

Payee name

Name of the person to whom payment is to be made

18

Account Number

Account number of Payee

19

Payment mode

Cash/Credit/Direct Transfer

Cash/Credit/Direct Transfer

20

Financial Institution Branch (IFSC Code)

A group of business terms to specify Branch of Payee

21

DDelivery Information

Company_Name

ICAI

Detail of person and address wherefrom goods are dispatched.

22

Address1

Vasanth Nagar

23

State

Karnataka

224

Pincode

560087

25

Invoice Item Details

Serial Number

1,2,3

26

Quantity

10

The quantity of items (goods or services) that is charged in the Invoice line.

27

Item Rate per quantity

500.5

The number of item units to which the price applies.

28

net amount

5000

The unit price, exclusive of GST, before subtracting Item price discount, can not be negative

29

GST Rate of item

5

The GST rate, represented as percentage that applies to the invoiced item.

30

IGST Amount as per item

A group of business terms providing information about GST breakdown by different categories, rates and exemption reasons

31

CGST Amount as per item

650.00

32

SGST Amount as per item

650.00

33

Batch number/name

Batch number details are important to be mentioned for certain set of manufacturers

34

Document Total Details

Total invoice value

35

Total Tax Amount

When tax currency code is provided, two instances of the tax total must be present, but only one with tax subtotal.

36

Paid amount in advance

The sum of amounts which have been paid in advance. Must be rounded to maximum 2 decimals.

37

Amount due

The outstanding amount that is requested to be paid. Must be rounded to maximum 2 decimals.

38

Extra Information

TTax scheme

GST, Excise, Custom, VAT eyc.

Mandatory element. Use "GST"

39

SShip To information

ShippingTo_Name

Adarsha

A group of business terms providing information about the address to which goods and services invoiced were or are delivered.

40

ShippingTo_GSTIN

36AABCT2223L1ZF

41

ShippingTo_Address1

Address

42

ShippingTo_Pincode

560001

43

ShippintTo_State

Karnataka

44

Supply Type

SSupply/export/Job work

A group of business terms providing information about the address to which goods and services invoiced were or are delivered.

445

Transaction Mode

Regular/BilTo/ShipTo

 

ANNEXURE B (Parameters of QR code)

  • GSTIN of supplier
  • GSTIN of Recipient
  • Invoice number as given by Supplier
  • Date of generation of invoice
  • Invoice value (taxable value and gross tax)
  • Number of line items.
  • HSN Code of main item (the line item having highest taxable value)
  • UUnique Invoice Reference Number (hash)

The author can also be reached at cavipinmittal@gmail.com


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Category GST, Other Articles by - CA.vipin mittal 



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