Things You Need to Know about E-invoice under GST

What are E-invoicing and an e-invoice under GST?

E-invoicing or Electronic invoicing is an electronic authentication mechanism under Goods and Services Tax or GST. As a part of this mechanism, all the B2B and Export invoices generated by a business is required to be registered with the government system, which is to say, the Invoice Registration Portal (IRP), and obtain a unique identification number for every invoice termed as Invoice Reference Number (IRN). Apart from IRN, a digitally signed QR code with select details from the invoice will be created and digitally sign the uploaded invoice data. Therefore, an e-invoice is a document that has an IRN associated with it and the digitally signed QR code printed on it. After an IRN has been generated and the invoice gets authenticated, the details ought to be made available on the GST portal and EWB portal in real-time.


Who needs to generate an E-Invoice?

Based on Aggregate Annual Turnover (AATO)

E-Invoice under GST was introduced in a phased manner based on the Aggregate Annual Turnover of the companies. It is stated in Section 2(6) of the CGST Act that “(6) “aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on a reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax, and cess;”


Based on FY

According to the notices and revised notices published in this regard, AATO in any preceding Financial Year (FY) from 2017-18 onwards needs to be considered to find out the applicability of the e-invoicing mandate. The AATO is in accordance with the GST Returns. GST System has also given an option to check the applicability on the E-Invoice Portal.


Based on entity type

Only the suppliers can generate the GST E-invoice. E-commerce operators can generate E-invoice under GST on behalf of the sellers on their platforms yet the recipients and transporters cannot do that.


Who need not generate an E-Invoice?

The following people are excluded from generating e-invoice as per the notice issued by Central tax –

  • Insurance Company
  • Banking Company
  • Financial Institution
  • NBFCs
  • GTA
  • Supplier of passenger transportation services
  • Supplier of services by way of admission to the exhibition of cinematograph films on multiplex screens
  • Special Economic Zones (SEZs) Units (Notified vide Notification No. 13/2020 and 61/2020- Central Tax): As per the notifications, the exclusion is for SEZ Unit and not for SEZ Developers.


What type of documents is to be reported to GST System under E-Invoicing?

The following types of documents need to be reported to the E-invoicing system by the taxpayers –

  • Invoice by Supplier
  • Credit Note by Supplier
  • Debit Note by Supplier

Consequently, Bill of Supply and Delivery Challan or Job Work Challan need not be reported under E-invoicing under GST.


How to generate an e-invoice under GST?

From the taxpayer’s system itself, an invoice is created which is then sent to Invoice Registration Portal (IRP) for the purpose of authorization. Once authorization is over with, the invoice data is updated with IRPs digital signature and a QR code along with the Invoice Registration Number (INR). This in turn is termed an e-invoice.


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