Date of implementing e-invoicing in GST

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Yarab A | Mar-04-2020

A game-changer into the world of invoicing to ensure interoperability of the data with various system and curb the tax evasion was proposed to be brought up during the beginning of the new financial year 1st April 2020. However, the need was felt to allow businesses to get used to the new system of e-invoice and as a result, the date of implementing the e-invoice pushed to a new date.

The proposed system with a standardized protocol, powered by information technology, will enable machines to read electronic invoices. To give a brief, e-invoicing is a system in which B2B invoices are authenticated electronically by Invoice Register Portal (IRP)

The concept of e-invoice begins with the validation of invoice data uploaded by the taxpayer and issuing unique identification number called as Invoice Registration Number (IRN) for every invoice being uploaded into the system.

A QR code is tagged against every invoice for further use by various Government portals, tax officials and taxpayers.

Know more on How e-invoice system works and IRN

Date of implementing e-invoicing in GST

The GST Council in its 37th GST council meet has approved the introduction of e-invoicing in a phased manner for reporting of business – to - business (B2B) invoices to the GST System. This will be introduced on a voluntary basis based on turnover criteria.   

Annual turnover

Date for voluntary implementation of e-invoice

New date of mandatory implementation of -invoice

500 Crore & above

1st January,2020

1st October 2020

100 Crore up to 500 Crore

1st February,2020

1st October,2020

The revised date of implementing e-invoice is updated as per 39th GST Council meeting held on 14th March,2020.

As mentioned in the above table, the voluntary adoption of e-invoicing system was started from 1st January,2020 for larger businesses and for businesses with turnover up to 500 Crore was started from 1st February,2020. The mandatory implementation of e-invoicing system for all the businesses with a turnover above 100 Crores is deferred from 1st April,2020 to 1st October 2020 as per the 39th GST Coucil meeting held on 14th March,2020.

Government has considered only the larger businesses to start with the e-invoice system and gradually, in a phased manner, more number of businesses will be brought into the ambit by reducing the turnover limit.

Business preparedness for e-Invoicing in GST

The e-invoicing functioning will depend on how well the accounting software or ERP system interacts with the IRP system. This is because an invoice is valid only if it contains an IRN which is authenticated by the IRP system.

As a business, for you to sail smoothly, the accounting software you use should have a built-in capability to generate e-invoice data in the prescribed format and more importantly, seamlessly interacts with the IRP portal to complete the e-invoice process without the manual intervention. 

With e-invoicing being introduced, the first step towards preparedness is to understand the e-invoice fundamentals and get used to the system. Secondly, need to consider accounting software which will not only generate the e-invoice data but also has an online capability to interact with the IRP system to generate e-invoice.

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