E-invoice system under GST – Rule 48 CGST Rule
The GST Council, in its 37th meeting
held on 20th September 2019, approved introduction of electronic invoice (‘e-invoice’)
in GST in a phased manner. Accordingly, steps have been initiated to introduce
'e-invoicing' for reporting of Business to Business (B2B) and export invoices.
GST Council, in its 39th meeting, held on 14th March 2020, further recommended
certain classes of registered persons to be exempt from issuing e-invoices.
Read more – Job Work Under
GST
Following classes of registered persons
have been exempted from issuing e -invoices:
a) Special
Economic Zone Units
b) insurer or a
banking company or a financial institution, including a non-banking financial
company
c) goods transport
agency supplying services in relation to transportation of goods by road in a
goods carriage
d) Suppliers of
passenger transportation service
e) Suppliers of
services by way of admission to exhibition of cinematograph films in multiplex
screens
Enhancing Efficiency
with E-Invoicing Under GST
The Goods and Services Tax (GST) has
been a major game changer for businesses in India. It has revolutionized the
way goods and services are taxed and has made the process of filing taxes more
efficient. One of the most useful features of GST is e-invoicing, which makes
it easier for businesses to generate invoices electronically and keep track of
their transactions. E-invoicing helps streamline the entire process of
generating invoices, making it easier for businesses to ensure accuracy in
their invoices as well as billing customers faster. In addition, e-invoicing
also reduces paperwork and eliminates manual errors that can lead to discrepancies
in tax payments. This makes it easier for businesses to stay compliant with GST
regulations while also improving efficiency in their operations.
E-invoicing is based on an integrated
platform that links up with existing accounting systems. This means that
businesses can easily generate invoices without having to manually enter data
into a separate system. The platform also allows businesses to access invoice
details online, making it easy for them to track payments, identify
discrepancies, and make corrections quickly if needed. Overall, e-invoicing
under GST is a great tool for improving efficiency and ensuring compliance with
tax regulations. By automating the process of creating invoices, businesses can
save time and resources while also staying compliant with GST rules.
Furthermore, they can use the integrated platform to quickly track payments and
identify discrepancies if necessary.
What is e-invoice?
E-Invoice is a system in which B2B invoices
are authenticated electronically by GSTN for further use on the common GST
portal. Under the 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 is transferred
from einvoice1.gst.gov.in portal to
both the GST portal and e-way bill portal in real-time. Therefore, it
eliminates the need for manual data entry while filing GSTR-1 return as well as
generation of part-A of the e-way bills, as the information is passed directly
by the IRP to GST portal.
Advantages of
e-invoicing under GST
The introduction of the Goods and
Services Tax (GST) in India has been a major milestone for businesses, as it
streamlined and simplified the taxation system. To further improve the GST
experience, the government introduced e-invoicing system. This new system will
help businesses to be more efficient, accurate and compliant with their GST
returns. Here are some of the key benefits that businesses can enjoy with
e-invoicing:
·
Increased Efficiency: E-invoicing
helps to automate an essential part of the business process, thereby reducing
manual effort. It eliminates paperwork and makes data entry much faster. This
leads to improved efficiency in creating invoices and filing GST returns.
·
Improved Accuracy: With
e-invoicing, businesses can reduce chances of errors while entering invoices
into their accounting systems. The system also ensures that all mandatory
fields are filled up accurately before generating an invoice.
·
Reduced Compliance Costs: E-invoicing
helps to reduce compliance costs significantly as it automates certain
processes such as reconciliation and reporting. This helps to save time and
money spent on manual efforts.
·
Secure Data Storage: Data stored in
an e-invoicing system is secure from any external threats or malicious
activities. This helps businesses ensure that their data is safe from
unauthorized access.
Based on above, businesses have the
following benefits in brief by using e-invoice initiated by GSTN –
Ø E-invoice
resolves and plugs a major gap in data reconciliation under GST to reduce
mismatch errors.
Ø E-invoices
created on one software can be read by another, allowing interoperability and
help reduce data entry errors.
Ø Real-time
tracking of invoices prepared by the supplier is enabled by e-invoice.
Ø Backward
integration and automation of the tax return filing process – the relevant
details of the invoices would be auto-populated in the various returns i.e.
GSTR-1, especially for generating the part-A of e-way bills.
Ø Faster
availability of genuine input tax credit.
Ø Lesser
possibility of audits/surveys by the tax authorities since the information they
require is available at a transaction level.
E-invoicing is a great way for
businesses to become more efficient, accurate and compliant with their GST
returns. With its many advantages, it is surely going to be a game changer for
Indian businesses in the years to come!
E-invoice applicability
– who must generate the e-invoice
The taxpayers must comply with
e-invoicing in FY 2023-24 and onwards if their e invoice limit or turnover
exceeds the specified limit in any financial year from 2017-18 to 2022-23.
Also, the aggregate turnover will include the turnover of all GSTINs under a
single PAN across India.
If any business having turnover in
preceding financial year is below than the said limit but it crossed the said
limit in current financial year then the business needs to comply with e-invoice
from the beginning of next financial year. Also, refer below table to
understand the phase wise implementation of e-invoice -
|
Phase |
Applicable to taxpayers having an aggregate turnover of more than |
Applicable date |
Notification number |
|
I |
Rs 500
crore |
01-10-2020 |
|
|
II |
Rs 100
crore |
01-01-2021 |
|
|
III |
Rs 50
crore |
01-04-2021 |
|
|
IV |
Rs 20
crore |
01-04-2022 |
|
|
V |
Rs 10
crore |
01-10-2022 |
|
|
VI |
Rs 5
crore |
01-08-2023 |
Rules and Regulations
for Generating an E-Invoice Under GST
With the introduction of Goods and
Services Tax (GST) in India, e-invoicing has become a key element that helps
businesses to enhance their efficiency by streamlining processes and reducing
paperwork. The government of India has mandated e-invoicing for certain
categories of businesses in order to ensure compliance with GST regulations. The
Central Board of Indirect Taxes & Customs [CBIC] has recently issued a
notification 10/2023-Central
tax dated 10th May 2023, in exercise of Sub rule (4) of Rule 48 of CGST Rule,
any business whose annual turnover is more than ₹5 crore needs to generate an
e-invoice for every invoice (other than invoices issued to unregistered
persons) generated.
This is done to facilitate accurate
reporting of sales and ensure that all taxes are paid properly. Additionally,
businesses must also submit their GST returns on time and follow all other GST
rules as laid out by the government. In order to generate an e-invoice, there
are certain steps that need to be followed:
·
The first step is to register with the Invoice
Registration Portal (IRP) provided by the government - https://einvoice1.gst.gov.in/
·
Once registered, businesses will receive a unique
Identification Number (IRN) which they need to use while generating their
invoices.
·
Businesses then need to enter all relevant details such
as customer name, address and other information related to the transaction into
the IRP.
·
The IRP will then generate an e-invoice which needs to
be shared with the customer.
·
Finally, businesses must file the e-invoice along with
their GST returns on or before their due date.
These are some of the basic steps which
businesses must follow in order to generate an e-invoice under GST. It is
important for businesses to understand these rules as non-compliance may result
in heavy penalties from the government. E-invoicing not only helps businesses
comply with GST regulations but also makes it easier for them to track their
sales data accurately.
How to file an e-Invoice
under GST?
In today's digital age, businesses are
increasingly looking for ways to streamline their operations and save time. One
of the biggest advantages that the Goods and Services Tax (GST) has brought to
the table is the concept of e-invoicing. This system of electronically
generating invoices is quickly becoming a popular option among businesses in
India, as it helps them to save time and money while improving efficiency.
E-invoicing is a simple process that requires minimal effort from businesses.
All you need to do is generate an e-invoice
in accordance with the provision of Section 31 read with Rule 48 of CGST Act
2017, upload it on the Invoice Registration Portal (IRP), and then file it with
the GST department. Once your invoice has been verified by the department, it
will be assigned a unique Invoice Reference Number (IRN). This IRN will enable
you to track your invoice through its entire lifecycle, from generation to
payment. The process of filing an e-invoice under GST is quite straightforward
and can be accomplished in just a few steps:
·
Step 1: Generate your invoice in accordance with Indian
GST standards.
·
Step 2: Upload your invoice on the Invoice Registration
Portal (IRP).
·
Step 3: Submit your invoice for verification by the GST
department.
·
Step 4: Receive a unique Invoice Reference Number (IRN).
·
Step 5: Track your invoice through its entire lifecycle.
Once you have completed these steps,
you will have successfully filed an e-invoice under GST. This system has been
designed to simplify tax compliance for businesses, ensuring that they remain
compliant with all applicable laws and regulations. It also provides businesses
with greater visibility into their invoices, allowing them to monitor their
progress more closely and ensure timely payments. E-invoicing is quickly
becoming one of the most popular methods of generating invoices under GST, as
it offers numerous advantages over traditional methods. By leveraging this system,
businesses can improve their efficiency while reducing costs associated with
manual processing of invoices. So, if you're looking for an easy way to
streamline your business operations and save time and money, consider using
e-invoicing under GST!
Time limit for
Reporting Invoices on the IRP Portal
Please keep in mind while preparing tax
invoice under GST and if e-invoice is applicable based on certain limit-
Government has issued GST Advisory of
Time limit for reporting e-invoice on IRP portal on 13-04-2023 as mentioned
below. It is to inform you that it has been decided by the Government to impose
a time limit on reporting old invoices on the e-invoice IRP portals for
taxpayers with AATO greater than or equal to 100 crores.
Please note that this restriction will
apply to the all-document types for which IRN is to be generated. Thus, once
issued, the credit / Debit note will also have to be reported within 7 days of
issue.
For example, if an invoice has a date
of April 1, 2023, it cannot be reported after April 8, 2023. The validation
system built into the invoice registration portal will disallow the user from
reporting the invoice after the 7-day window. Hence, it is essential for
taxpayers to ensure that they report the invoice within the 7-day window
provided by the new time limit.
Conclusion
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