Who Should Issue an e-Invoice in GST?

|Updated on: August 2, 2022

1 st October, 2020, the day on which the e-invoice concept was introduced into the GST system. The GST Council has approved electronic invoicing in a phased manner which requires businesses to report, B2B invoices to IRP (Invoice Registration Portal).

In the first phase, e-invoice was introduced for businesses with a turnover of 500 crores and above. In the second and third phases, e-invoicing was applicable for businesses with a turnover of 100 and 50 crores.

Currently,  e-invoicing is applicable for businesses with a turnover exceeding 20 crores, from 1st April,2022. Read 'Date of implementing e-invoicing in GST' to know the e-invoicing implementation date. In the recent update, e-invoicing will be applicable for businesses with a turnover exceeding 10 crores from 1st October 2022. 

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For the first time, the standard for invoicing is being introduced in the country, it is imperative for businesses to understand the fundamentals and get familiarized with the e-invoicing system. The e-invoicing concept being new, the most asked question is who should issue an e-invoice?

Let’s discuss and understand the types of businesses that should issue an e-invoice?

Who should issue an e-invoice?

Businesses who are required to issue an e-invoice depend upon the aggregate annual turnover. So, if your business is registered under GST, then you should check the following table to ascertain the requirement of issuing e-invoices.

e-Invoice Criteria

Result

Required to issue e-invoice?

Is your aggregate turnover in excess of Rs. 20 crores*?

*It's 10 crores from 1st October,2022

Yes

You have to issue an e-invoice for supply made by you

Is turnover based on PAN India?

Aggregate turnover should be calculated by taking all the supplies made under GSTNs bearing the same PAN across India

 

If turnover exceeds Rs. 100 crores under the same PAN, you have to issue an e-invoice

Current or previous financial year turnover?

 Aggregate turnover in any previous financial year from 2017. 

 

Yes, you have to issue an invoice

Note: For businesses with a turnover of 50 crores and above, e-invoice is already implemented 

To summarize, if you are a business whose aggregate turnover in the financial year exceeds 20 Crores, it’s mandatory to issue an e-invoice for supplies made by you from 1st April 2021. In the recent update, e-invoicing will be applicable for businesses with a turnover exceeding 10 crores from 1st October 2022. 

Now that we are clear with who is required to issue an e-invoice, the next question which comes to mind is what type of transactions are covered under e-invoice. 

What type of documents are to be reported to GST system?

As the name suggests, an invoice issued by the supplier to the customer is a primary document covered under the e-invoice concept. Other than invoices, there are also other documents which are required to be reported to IRP by the creator of the document. The following is the list of documents covered under the ambit of e-invoice.

Overall, all such documents which have a repercussion on Input tax credit (ITC) are covered under e-invoice.

Will the invoice process change with the e-invoice concept?

Businesses can continue to generate their invoices through their existing accounting software, and they would not be required to generate any invoices on the GST Portal or any other portal for the being. But the fact is that an invoice will be valid only if it has IRN and QR code authenticated by the IRP.

To issue a valid invoice, the businesses would require to upload invoice data prepared using the accounting software to the IRP. After which the portal will generate an IRN (Invoice Reference Number) and QR code which will form part of proof for all the documents that are generated for movement of goods from seller’s place to buyer’s place. Here, the business management software you use will play a key role not only in generating GST-compliant invoices, but also to ensure you sail through the new mandate smoothly.

The business management software you use should have a built-in capability to generate e-invoice data in the prescribed format and more importantly, seamlessly interact with the IRP portal to complete the e-invoice process without manual intervention.

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Know more about e-invoices in GST

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How to Transit to e-Invoice System Invoice Reference Number (IRN)
Who Should Issue an e-Invoice in GST Generate e-Invoice Instantly in TallyPrime
How to Generate Bulk e-Invoice in TallyPrime Working of e-Invoice System

 

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