After GST was introduced in India in the year 2017, the GST Council came up with an e-invoice system in GST during the 37th meeting. It’s introduced to help businesses, which can be registered easily online. A certain turnover limit is set, so as to be applicable for e-invoicing which is more than 50 cores. With this let’s see the e-invoice system under GST in detail
E- Invoice System Meaning
E- Invoice System or electronic invoice system is a system in GST where invoices are transferred from one business to another and also exports invoices electronically which have to be registered with the Invoice Registration Portal (IRP). After this, an Invoice Reference Number (IRN) will be received after every invoice is created and then a digital QR code will be printed in the e-invoice form at the end.
All the e-invoice information will be found in the GST web portal and E- way bill web portal in real-time. In the e-invoice system under GST, only businesses are applicable to use this and not consumers.
Classes of Registered individuals who are exempted from using e- invoices under GST
Special Economic Zone units
Any Banking or Insurance Companies, Any financial institutions, etc.
Agencies related to transportation of goods or any logistic activities by road.
Suppliers of passenger transportation service
Suppliers of services related to the admission of Cinemas
E- Invoice System have different ways to collect an invoice, these are
•API based with direct Taxpayers System
•API based with Taxpayers System but through GSP/ASP
•Offline Mode
•Web-based or based through an app will also be found in the future
Process of E-invoice System under GST
These are a few steps required to apply for an e-invoice in GST
The first step is to create an e-invoice by using their own accounting billing software which will create JSON file data and into the IRP.
In the second step the seller has to generate a unique IRN (Invoice Reference Number)
Then the seller will upload the JSON for each invoice along with the IRN into the Invoice Registration web portal.
IRP will check the following uploaded details and then will provide a signature and a QR code to the JSON file.
The E- way bill and the GST system portals will get all the uploaded files for the E-invoice under GST.
After all the above steps are done, the e–invoice under GST will be sent to the seller’s email-id to download the e-invoice form.
There are a few documents covered under the E- invoice system
Invoices
Credit notes
Debit notes
Different documents covered under GST law are also considered
Advantages of E-invoice System under GST
E-invoice system has some advantages to all the registered business, they are
If one e-invoice is generated by one software, it can be read in many other software’s which reduces fresh data entry as E-invoice has a uniform interpretation and machine readability under GST.
It becomes a part of the business process as a taxpayer
Reduction in errors of the same e-invoice data when it is sent to the tax department or to the buyer for purchase registration.
With the complete lookout of all the B2B e-invoices which in turn reduces tax evasion
E-invoices reduce all the fraud activities as all the fake e-invoices are eliminated.
E-invoices not only reduce the cost of generating invoices but also reduces disputes among transacting parties.
Conclusion
With all the above -given details of the E-invoice system under GST. You not only know how E-invoice works in GST but also how they are trying to make it easy for all the businesses to register online without much confusion.
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