GST

GST e-invoice System – Revised FAQs. GSTN issues more comprehensive 84 FAQs

GST e-invoice System – FAQs

A.E-invoice -Basics:

1. What is ‘e-invoicing’?

As per Rule 48(4) of CGST Rules, notified class of registered persons have to prepare invoice by uploading specified particulars of invoice (in FORM GST INV-01) on Invoic e Registration Portal (IRP) and obtain an Invoice Reference Number (IRN).
 
After following above ‘e-invoicing’ process, the invoice copy containing inter alia, the IRN (with QR Code) issued by the notified supplier to buyer is commonly referred to as ‘e-invoice’ in GST.
 
Because of the standard e-invoice schema (INV-01), ‘e-invoicing’ facilitates exchange of the invoice document (structured invoice data) between a supplier and a buyer in an integrated electronic format.
 
Please note that ‘e-invoice’in ‘e-invoicing’ doesn’t mean generation of invoice by a Government portal.
 

2.How is ‘e-invoicing’ different from present system?

 
There is no much difference indeed.
 
Registered persons will continue to create their GST invoices on their own Accounting/Billing/ERP Systems. These invoices will now be reported to ‘Invoice Registration Portal (IRP)’. On reporting, IRP returns the e-invoice with a unique ‘Invoice Reference Number (IRN)’ after digitally signing the e-invoice and adding a QR Code. Then, the invoice can be issued to the receiver(along with QR Code).
 
A GST invoice will be valid only with a valid IRN.
 
 
For more detailed process, please go through ‘e-invoice -Detailed Overview’
 

3.For which bus ine s ses,e-invoicing is mandatory?

Presently, it is mandated for registered persons whose aggregate turnover (based on PAN) in a financial year is more than Rs. 500 Crores.

4. From which date, e-invoicing is mandatory for the notified classes of taxpayers?

As per latest notification, e-invoicing will be mandatory w.e.f. 1st October, 2020, for notified classes of registered persons(those having aggregate annual turnover at PAN level more than Rs. 500 Crores).

5.What are the legal provisions governing e-invoice?

Below notifications were issued on e-invoice:
 
Notification No. (Central Tax) Key Contents
68/2019 Dt. 13-12-2019
  • Central Goods and Services Tax (Eighth Amendment) Rules
  • Inserted below new sub-rules in Rule 48 of CGST Rules, 2017:

(4) The invoice shall be prepared by such class of registered persons as may be notified by the Government, on the recommendations of the Council, by including such particulars contained in FORM GST INV-01 after obtaining an Invoice Reference Number by uploading information contained therein on the Common Goods and Services Tax Electronic Portal in such manner and subject to such conditions and restrictions as may be specified in the notification.

(5) Every invoice issued by a person to whom sub-rule (4) applies in any manner other than the manner specified in the said sub-rule shall not be treated as an invoice.

(6) The provisions of sub-rules (1) and (2) shall not apply to an invoice prepared in the manner specified in sub-rule (4)
69/2019 Dt. 13.12.2019 Notified 10 Common Goods and Services Tax Electronic Portals for the purpose of preparation of invoice in terms of rule 48 (4)
70/2019 Dt 13.12.2019

Notified registered person, whose aggregate turnover in a financial year exceeds one hundred crore rupees, as a class of registered person who shall prepare invoice in terms of sub-rule (4) of rule 48 of the said rules in respect of supply of goods or services or both to a registered person; notification to come into force from the 1st day of April, 2020

(This notification superseded by 13 of 2020 Dt. 21-3-2020)
2 of 2020 Dt. 1-1-2020

Substituted Form GST INV-1 as e-invoice schema(Schema further amended vide Notification 60/2020 Dt. 30-7-2020)
13 of 2020 Dt 21.03.2020 (in supersession of 70/2019 Dt. 13.12.2019   
  • e-invoicing to start from the 1st October, 2020;
  • Notifies registered persons, other than those referred to in sub-rules (2), (3), (4) and (4A) of rule 54 of the said rules, whose aggregate turnover in a financial year exceeds Rs. 100 Cr., as a class of registered person who shall prepare invoice and other prescribed documents, in terms of sub-rule (4) of rule 48 of CGCT Rules, 2017, in respect of supply of goods or services or both to a registered person.

(Further amended by 61/2020 Dt. 30-7-2020)
60/2020 Dt 30.07.2020
  • Central Goods and Services Tax (Ninth Amendment) Rules, 2020
  • New form substituted for GST INV-01 (i.e. notified revised Schema/format for e-invoice)
61/2020 Dt. 30.07.2020
  • Amended notification 13/2020 Dt. 21-3-2020
  • Special Economic Zone units also excluded from e-invoicing mandate
  • Aggregate Turnover of registered persons (required to prepare invoice in terms of Rule 48(4)) enhanced to Rs. 500 Cr.
 

6. What are the advantage s of e-invoice for bus ine s ses?

e-invoice has many advantages for businesses such as Auto-reporting of invoices into GST return, auto-generation of e-way bill (where required). e-invoicing will also facilitates standardisation and inter-operability leading to reduction of disputes among transacting parties, improve payment cycles, reduction of processing cos tsand thereby greatly improving overall business efficiency.

7.What businesses need to do, to be e-invoice ready?

Businesses will continue to issue invoices as they are doing now. Necessary changes on account of e-invoicing requirement(i.e. to enable reporting of invoices to IRP and obtain IRN), will be made by ERP/Accounting and Billing Software providers in their respective software. They need to get the updated version having this facility.

8. Is an invoice /CDN/DBN (re quire d to be re ported to IRP by notified person), valid without IRN?

As per Rule 48(4), notified person has to prepare invoice by uploading specified particulars in FORM GST INV-01 on Invoice Registration Portal and after obtaining Invoice Reference Number (IRN).As per Rule 48(5), any invoice issued by a notified person in any manner other than the manner specified in Rule 48(4), the same shall not be treated as an invoice.So, the document issued by notified person becomes legally valid only with an IRN

B.E-invoice -Applicability:

9.What documents are presently covered under e-invoicing?

i. Invoices
ii.Credit Notes
iii. Debit Notes,

when issued by notified class of taxpayers (to registered persons (B2B) or for the purpose of Exports)are currently covered under e-invoice.

Though different documents are covered, for ease of reference and understanding, the system is referred as ‘e-invoicing’.

10.What supplies are presently covered under e-invoice?

Supplies to registered persons (B2B),Supplies to SEZs (with/without payment), Exports (with/without payment), Deemed Exports, by notified class of taxpayers are currently covered under e-invoice.

11. B2C (Business to Consumer) supplies can also be reported by notified persons?

No. Reporting B2C invoices by notified persons is not applicable/allowed currently. However, they will be brought under e-invoice in the next phase.

12.What is the applicability of e-invoice for import trans actions?

e-invoicing is not applicable for import Bills of Entry.
 

13.Which entities /sectors are exempt from the e-invoicing mandate ?

a. Special Economic Zone Units
b. insurer or a banking company or a financial institution, including anon-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

14.The exemption from e-invoicing is w.r.t the nature of supply/transaction or w.r.t the entity?

It is for the entity.

15. Do SEZ Developers need to issue e-invoices?

Yes, if they have the specified turnover and fulfilling other conditions of the notification. In terms of Notification (Central Tax) 61/2020 dt. 30-7-2020, only SEZ Units are exempted from issuing e-invoices.

16.Are Free Trade & Ware housing Zones (FTWZ) exempt from e-invoicing?

Yes. As per Foreign Trade Policy, Free Trade & Warehousing Zones (FTWZ) are only a special category of Special Economic Zones, with a focus on trading and warehousing.

17.Is e-invoicing applicable for supplies by notified persons to SEZs?

Yes, e-invoicing is applicable for supplies by notified persons to SEZs.
 
In terms of Notification (Central Tax) 61/2020 dt. 30-7-2020, only SEZ Units are exempt from issuing e-invoices.
 

18.The re is an SEZ unit and a regular DTA unit under  same legal entity (i.e . having same PAN). The aggregate total turnover of the legal entity is more than Rs . 500 Crore s (cons idering both the GSTINs ). However, the turnover of DTA unit is be low Rs. 100 crore s for FY 19-20.

In this scenario, as SEZ unit is exempt from e-invoicing, whether e-invoicing will be applicable to DTA Unit?

Yes, because the aggregate turnover of the legal entity in this case is > Rs. 500 Crores. The eligibility is based on aggregate annual turnover on the common PAN.

19. Is e-invoicing applicable to invoice s issued by Input Se rvice Distributor (ISD)?

No

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