E-invoicing under New GST Return : New Notifications Issued

E-Invoicing Basic Points:

– GST Council has decided to introduce electronic-invoice (i.e. E-invoice) on voluntary basis from January 2020.

– GST Council has approved the introduction of ‘E-invoicing’ or ‘electronic invoicing’ in a phased manner for reporting of business to business (B2B) invoices to GST System, starting from 1st January 2020 on a voluntary basis.

– Since there was no standard for e-invoice existing in the country, the standard for the same has been finalized after consultation with trade/industry bodies as well as ICAI after keeping the draft in public place.

– The GST Council approved the standard of e-invoice in its 37th meeting held on 20th Sept 2019 and the same along with schema has been published on GST portal.

– Also, there are lot of myth or misconception about e-Invoice. The present document is an attempt to explain the concept of e-invoice, how it operates and basics of standards.

Now, let’s understand this issue step by step:

1. 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.

2. 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.

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.

3. How will Electronic invoicing benefit businesses?

Businesses will have the following benefits by using e-invoice initiated by GSTN:

– 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.
– Real-time tracking of invoices.
– 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.

4. When will E-invoicing get implemented?

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 condition thereof, etc.

As per the notifications, the E-Invoices would be applicable mandatorily (for specified persons only) from 1st April, 2020. Although, registered persons can opt it on a voluntary basis also.

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