Who Should Issue an e-Invoice in GST?

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Yarab A | Mar-04-2020

1 st October, 2020, the day on which 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, and from 1st January, 2021 it will be applicable for businesses with a turnover of 100 crores and above. 

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 types of business who should issue an e-invoice?

Who should issue an e-invoice?

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

e-Invoice Criteria

Result

Whether you are required to issue e-invoice?

Is your aggregate turnover in excess of Rs. 100 Crore?

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?

As the notification states ‘aggregate turnover in a financial year’ indicates that the turnover to be considered here is not of the previous financial year but the current financial year.

 

This could lead to interpretation issues and an easier way to look at is to consider the previous year aggregate turnover to determine the e-invoice applicability.

Note: For businesses with a turnover of 500 crores and above, e-invoice is already implemented 

To summarize, if you are a business whose aggregate turnover in the financial year exceeds 100 Crores, it’s mandatory to issue e-invoice for supplies made by you from 1st January 2021.

Now that we are clear with who is required to issue an e-invoice, the next question which comes to mind is that 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 invoice, there are also other documents which are required to be reported to IRP by the creator of the document. The following are 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?

It is believed that business 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 invoice 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 interacts with the IRP portal to complete the e-invoice process without the manual intervention.

To know more, read our article on How e-invoice system works?

Know more about e-invoice in GST

E-Invoice in GST, How to Generate E-Invoice in GST, How to Transit to E-Invoice System, Invoice Reference Number (IRN), Working of E-Invoice System, Date of implementing e-invoicing in GST, Generate e-Invoice Instantly in TallyPrime, Business Impact of e-Invoice, How to Generate Bulk e-Invoice in TallyPrime

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E-Way Bill, How to Generate E-Way Bill, How to Register E-Way Bill, How to Generate Bulk E-Way Bill

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GST Software, GST Invoicing Software, GST Calculator, GST Exempted Goods & Services, GST State Codes, New GST Returns & Forms, Sahaj GST Returns, Sugam GST Returns

 

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