Quick Summary on GST E-invoicing

What is E-Invoicing?

‘E-invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal.

Under the proposed electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP) to be managed by the GST Network (GSTN).

All invoice information will be transferred from this portal to both the GST portal and e-way bill portal in real-time.

Therefore, it will eliminate the need for manual data entry while filing ANX-1/GST returns as well as generation of part-A of the e-way bills, as the information is passed directly by the IRP to GST portal.

What is the current system in place for issuing invoices?

Currently, businesses generate invoices through various softwares, and the details of these invoices are manually uploaded in the GSTR-1 return. The invoice information is thereafter reflected in GSTR-2A for the recipients for viewing only. On the other hand, the consignor or transporters must generate e-way bill by again importing the invoices in excel or JSON manually.

What would be the changes after the implementation of the new system?

Under the new return system, an annexure in form GST ANX-1 will mostly take the place of the GSTR-1 return. However, the process of generating and uploading invoice details will remain the same. It will be done by importing using the excel tool/JSON or by the online entry of data. A seamless flow of data is expected for e-way bill generation. e-invoicing will be the key tool to enable this.

How will Electronic invoicing benefit businesses?

• E-invoice resolves and plugs a major gap in data reconciliation under GST to reduce mismatch errors.
• E-invoices created on one software can be read by another, allowing interoperability and help reduce data entry errors.
• Real-time tracking of invoices prepared by the supplier is enabled by e-invoice.
• Backward integration and automation of the tax return filing process – the relevant details of the invoices would be auto-populated in the various returns, especially for generating the part-A of e-way bills.
• Faster availability of genuine input tax credit.
• Lesser possibility of audits/surveys by the tax authorities since the information they require is available at a transaction level.

What is the effective date of implementation of E-Invoicing?

CBIC has issued various notifications on 13th Dec 2019 explaining the various issues on implementation of GST E-Invoices including Date, Person on whom it would mandatorily applicable, related conditions thereof, etc. As per the notifications, The E-Invoices would be applicable mandatorily (for Specified persons only) from 1st April 2020, Although Registered Person can opt it on a voluntary basis also.