E-invoicing under GST
E-Invoicing under GST
GST laws in India have been dynamic and has been evolving ever since its inception. The GST Council has brought necessary amendments in the Act and Rules to ensure that the essence of the GST Laws does not fade. One such recent amendment is with respect to the invoicing under GST is introduction of e-invoicing to curb the issue with respect to fake invoicing. The said amendment was introduced in 35th meeting of GST Council vide Notification No: 69/2019 (CBIC Notification) and correspondent amendment was also made in CGST Rules – Rule 48 (4), (5) & (6).
MEANING
‘Electronic Invoicing’ an abbreviation for ‘e-invoicing’ means the invoices under B2B shall be uploaded on the e-invoicing portal developed by the council and the portal shall generate a unique identification number for each invoice called ‘Invoice Registration Number (IRN)’. The taxpayers will have to upload the invoices on the portal, and which would be verified and then the IRN shall be generated. On verification the information of the invoices shall be automatically transferred to GST portal and e-way bill portal. This shall eliminate issue of duplicate invoicing and also the manual entry of invoices on filing of GSTR-1 return and generation of Part – A of e-way bills. With the introduction of the e-invoicing the invoices shall be uniform to a great extent and hence shall bring a bridge between generation of invoice and e-way bills and information can seamlessly follow through various portals.
IMPLEMENTATION
The implementation of the e-invoicing system has been done in 3 phases till date based on the aggregate turnover of the businesses.
E-invoicing does not apply to (vide Notification 13/2020):
Insurance Company
Banking Company
Non-Banking Financial Company
Financial Institution
Special Economic Zone Units
Business dealing in passenger transportation services.
Supplier of services by way of admission to the exhibition of cinematograph films in multiplex screens.
QR CODE & E-INVOICING
All the invoices issued by parties falling in above mentioned categories (of aggregate turnover more than 50 cr.) shall mandatorily upload the invoices on e-invoicing portal and shall have a unique QR Code on each invoice. The significance of having QR on each invoice is to have easy access to information of the invoice on the application designed for the same. On scanning the QR Code on the invoice, the individual can have easy access to the information of the invoice like GSTIN of the buyer and the seller, invoice number, date of invoice, IRN (Invoice Registration Number). HSN Code, digital signature and all the necessary information with respect to the invoice. Hence, the implementation of the QR Code on each invoice is to check its authenticity and ensure there is no fake invoicing.
BENEFITS OF E-INVOICING & HOW WILL IT CURB TAX EVASION
One major reason to implement the e-invoicing system was to eliminate the issue of fake invoicing, but its introduction has given several other benefits as well.
Data Entry:
The data shall not be uploaded manually for GSTR-1 as it is done currently.
It shall hence reduce the issue of data reconciliation and chances of errors are also reduced.
Seamless flow of information
The data uploaded on the e-invoice portal shall be automatically transferred to GSTN and e-way bill portal.
Real-time tracking of invoices prepared by suppliers.
Invoice generation software compatibility – invoice generation on one software can be read by another software, hence minimal chances of errors.
Tracking
Since each invoice has its ‘Invoice Registration Number’ and a unique QR Code there is minimal chances of fake invoicing.
Faster availability of genuine ITC.
Lesser compliance issues i.e., audit/surveys as the tracking are done at transaction level.
PROCESS OF GENERATING E-INVOICE
Therefore, with the introduction of e-invoicing the government aims to automize the process of GST filing and interlinking various platforms like e-invoicing portal, e-way bill portal and GSTN so that there is minimal manual interference. This also facilitates the government to put checks on the procedural level, so the chances of tax evasion and fake invoicing is reduced substantially. The scope for data manipulation in the invoices is curbed and the government can have real time checks on the invoices issued. Since the invoices have a unique IRN (Invoice Registration Number) and a QR Code it drives out the possibility of duplicate and fake invoicing.
Snehil Singhvi
(Legal advisor, S S Singhvi & Associates)