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The government had informed executing the fifth phase of e-invoicing to assessee whose yearly turnover exceeds Rs 10 cr to 20 cr. From Oct 1, 2022, the same phase will start, it just impacts drastically the small businesses that have the same turnover as well as affects their business processes and complaints. 

An Overview of GST E-invoicing

Beneath e-invoicing, the applicable businesses should notify the government to validate the documents. The portal in which the validations would get occur is said to be the invoice registration portal (IRP), such as the NIC and Clear. The outcome is that the government answers with a signed QR code and a unique Invoice Reference Number (IRN). To these kinds of businesses, the e-invoices would get auto-filled in GSTR-1 to the finish of the duration of tax. 

A penalty of Rs 25,000 per invoice will be levied if the generation of IRN failed. Rs 10000 per invoice is obligated to be paid when the business does not raise the needed invoices. 

Towards the exempted supplies the system does not get applicable towards which the supply bill is raised, job works, imports, delivery challans, and entities operating as banks and NBFCs, exhibiting films on multiplex screens, government departments, goods and passenger transportation agencies, and the Special Economic Zones (SEZ) units.

How GST E-invoicing Will Impact Business Compliance and Operations

A Smart Solution for GST E-invoicing

In order to prepare the GST e-invoice system, SAG Infotech Gen GST software is available in both Desktop and Online variants. With the software, you can prepare unlimited e-invoices for many clients as you like. We have a lot of features available in our Gen GST e-invoice software, like importing from government Excel, uploading JSON directory-wise, generating IRNs, cancelling bills, checking JSON validation, and printing bills.

Changes in GST E-invoicing Business Compliance and Operations

The relevant businesses should establish and test the latest system prior to 1st Oct 2022. Testing the e-invoicing setup is available at present in a sandbox environment on the API portal of the GST Network. First-time compliance asks for all the applicable businesses to enrol in the e-invoice portal like NIC ( or reported IRPs like Clear.

A system is required by the e-invoicing and the process revision and influences how the compliance would get executed. The revisions could be found in the process of business and preparation of GSTR-1, along with modifications in the invoicing software or Enterprise Resource Planning (ERP) systems. 

Within the auto-population, GSTR-1 filing would get simpler however the same provides reconciliation difficulties between GSTR-1 and sales books in every tax duration. These businesses are obligated to check the entries of the e-invoice in GSTR-1 prior to filing. Tech-based reconciliation could assist them in saving time and effort. 


The meaning of e-invoicing is not to generate the invoices on the government portal however the same refers to the reporting of the already generated invoices to the government for the purpose of validation. Hence the same reporting needs every invoice, debit, or credit note to be in the specific format which is mentioned said to be the e-invoice schema. 

Indeed acknowledging the transactions and the documents in which the e-invoicing is applicable and distinct them at the source from the other for simpler reporting in the IRP and the GSTR-1 processing. An identical action would be required for the e-way bills in which the same could be optionally auto-generated relying on the grounds of the inserted e-invoice information. 

The printing options should be revised for fetching IRN and QR codes in the e-invoice. All above would be the system changes, a reconfiguration shall be required in the current billing or ERP, or accounting systems. 

The business should choose and execute the effective method for the generation of e-invoices like online and real-time SMS and offline and batch processing. The same could be chosen for the SFTP or API integration using fully functional, end-to-end cloud-based solutions for large invoice scale, and customer service within a specified time. 

Through the additional method, the same could access the IRPs through current e-way bill APIs or web-based direct integration with IRPs such as NIC and Clear. The businesses could confirm the integration with IRP via GST Suvidha Provider (GSP), also served by Clear. The organizations functioning on a low scale might opt for relying on the lesser cost SMS-based or mobile app-based generation and old offline spreadsheet-based utilities like GePP, while these shall not render in an influential way.

There is an internet connection interruption risk for small businesses that used to function in semi-urban and rural areas. Small businesses might hesitate to transform towards innovative tech-based systems. Indeed the invoice-to-pay process could delay the operation of invoices including the payments would get late and might then affect the consumer's regard if the staff is not being trained properly or if a lack of connection setup is there. 

For confirming the preciseness of the invoices generated beneath e-invoicing, automating invoicing operations becomes critical. The same shall permit to share of the documents between the businesses through tapping the button and monitoring the payments. 


GST E-invoicing Effect and Purpose

The major goal for eliminating the e-invoice turnover limit would be to fetch and prevent bogus tax via rectification in compliance. The same permits the companies including the supply chain to exclusively avail of the validated Input Tax Credit (ITC), hence stopping the GST revenue leakages for the government. To extend the GST digitization would be the move of e-Invoicing. The same fetches the information of the transaction of the businesses at the beginning or at the billing stage. 

The majority of the assessee comes in the range of Rs 10-20 cr annual turnover as compared to any former e-invoicing stages. The transaction volume of these businesses is higher and secures newer compliance challenges. 

As per the validation of the government, the system permits small businesses to seek formal credit routes via invoice financing in a simpler way. But the large companies taking their raw materials through these businesses should pose vendor compliance to prevent ITC claim delays.

Hence e-invoicing in India permits the business billing or ERP system to communicate with each other. The same shall diminish the manual errors and rectify the clarity.


Published by

Suresh Kumawat
(Content Writer)
Category GST   Report

1 Likes   0 Shares   11949 Views


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