‘e-invoicing’ means reporting details of specified GST documents to a Government-notified portal and obtaining a reference number. It doesn’t mean generation of invoice by a Government portal and does not involve creating invoices on the government portal. However, it involves businesses reporting already created tax invoices onto the government-authorized IRP for validation and authentication. IRP includes the NIC’s e-invoice portal and Clear IRP.
e-Invoice (also known as 'Electronic invoicing') is a system in which all B2B invoices are electronically uploaded and validated by the specified portal. IRP generates a unique Invoice Reference Number (IRN) for each invoice after successful authentication. Each invoice is digitally signed and includes a QR code in addition to the IRN. Under GST, this is referred to as e-invoicing.
A B2B GST invoice will be valid only with a valid IRN. And before sharing it with the concerned parties, taxpayers need to print this IRN and QR Code on the invoice. Hence, understanding the nuances of e-invoice printing becomes important.
It is mandatory for the taxpayer to start e-invoicing from 1st April 2024, if the turnover exceeds INR 5 crores in the financial year 2023-24. Same is applicable if the threshold is crossed in any of the preceding financial years also.
For those businesses who meet the criteria but have not yet been enabled on the portal, they can self enable for e-invoicing by using the following steps:
If the business has a login credentials for e-way bill portal, same login credentials can be used.
If the business is not enrolled in the EWB portal, they need to register on the e-invoice system. The business must have a GSTIN issued by the GST system as well as a mobile phone registered with the GST system.
Go to the registration tab and click on e-Invoice enablement, the business will be taken to e-Invoice enablement form where the GSTIN number needs to be entered.
If the GSTIN number is active all the details of the business will be displayed such as applicant name, trade name, Address, mobile number registered with GST and also email registered with GST.
Click on send otp, upon successful verification of otp the user can set the ID and password for future login purpose.
Mandatory e-Invoicing registration:
As of 1st August 2023, all registered businesses (based on PAN) with an annual turnover in any preceding fiscal year from 2017-18 onwards exceeding 5 crores are mandated to generate e-invoices.
Annual turnover | New date of mandatory implementation of e-invoice |
Exceeding 500 crore | 1st October 2020 |
Exceeding 100 crore | 1st January 2021 |
Exceeding 50 crore | 1st April 2021 |
Exceeding 20 crore | 1st April 2022 |
Exceeding 10 crore | 1st October 2022 |
Exceeding 5 crore | 1st August 2023 |
Application of e-invoice:
All GST invoices for taxable B2B supplies.
All GST invoices for B2G – Business to Government supplies.
Export Sales
Sales falling under Reverse charge Mechanism.(RCM).
All Debit notes
All Credit notes
All invoices cum Bill of Supplies
Consequences of non-generation of e-Invoices:
Non-compliant businesses end up paying Rs. 10,000 penalty for every invoice not generated.
Non generation of IRN can attract a penalty of Rs. 25,000 for every incorrect invoice (Without IRN invoice is considered incorrect).
For small businesses –
GSTR-1 may not getting auto-filled with B2B sales details.
Buyers cannot avail any eligible ITC, face delays and may eventually hold up payments, especially the GST portion. It negatively affects the working capital of such businesses.
Buyers may reject invoices that are not e-Invoice complaint.
Mandatory fields to be printed on the e-invoice as per Rule 46. Tax invoice referred to in section 31:
Name, address and Goods and Services Tax Identification Number of the supplier
A consecutive serial number not exceeding 16 characters, in one or multiple series, containing alphabets or numerals or special characters- hyphen or dash and slash symbolized as "-'' and "/" respectively, and any combination, unique for FY
Date of its issue
Name, address and Goods and Services Tax Identification Number or Unique Identity Number, if registered, of the recipient
Name and address of the recipient and the address of delivery, along with the name of the State and its code, if such recipient is un-registered and where the value of the taxable supply is Rs. 50,000/- or more
Name and address of the recipient and the address of delivery, along with the name of the State and its code, if such recipient is un-registered and where the value of the taxable supply is less than Rs. 50,000/- and the recipient requests that such details be recorded in the tax invoice
HSN code for goods or services
Description of goods or services
Quantity in case of goods and units or Unique Quantity Code thereof
The total value of the supply of goods or services or both
Taxable value of the supply of goods or services or both taking into account discount or abatement, if any
Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess)
Amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess )
Place of supply along with the name of the State, in the case of a supply in the course of inter-State trade or commerce
Address of delivery where the same is different from the place of supply
Whether the tax is payable on reverse charge basis
Signature or digital signature of the supplier or his authorised representative
QR code, having embedded Invoice Reference Number (IRN) in it, in case invoice has been issued in the manner prescribed under sub-rule (4) of rule
Important points to remember in e-Invoicing:
Under the e-invoice mandate, taxpayers will continue to generate their specific GST invoices (covered under the mandate) on their own with the help of their Accounting/Billing/ERP Systems.
The invoice data will now have to be sent to Invoice Registration Portal (IRP) if their business crosses the e-invoice turnover limit.
IRP then will verify and assign a number unique for that particular invoice using the hash algorithm under e-invoicing which is the Invoice Reference Number (IRN) along with a QR Code.
An e-invoice must have a signed QR Code. The size of the QR code is not specified by the GSTN, however, the taxpayer must take care that it is placed clearly on the invoice from where it can be scanned easily. It need not be placed on every page of the invoice, placement just on the first page is workable.
Size of the QR code should be of minimum 3x3 inches or 290x290 pixels. It should have a white colour padding of at least 1 inch around it. It should be placed at the top right corner of the e-Invoice. High contrast should be there for QR code and background.
Acknowledgement Date and number, references to contracts, vendor purchase orders, e-way bill numbers, phone numbers or email IDs, and the place of dispatch of the goods etc. are optional and not mandatory fields.
For B2C invoices i.e. e-Invoicing, IRN generation is not required. But Government has made it mandatory for the notified businesses (turnover greater than 500 crores) to display QR codes on their B2C invoices also.
Large enterprises purchasing from small businesses which are notified for e-invoicing can have a daunting task at hand. They must ensure that their small vendors comply with the e invoicing mandate more regularly. It is essential since they can otherwise lose input tax credits or face delays in claims due to non-generation of e-invoices. Ultimately when e invoicing system is streamlined by the vendor businesses, they enjoy claims of genuine tax credits.
One must start maintaining proper and verified records of supplier and customer master data, if not in the past. For precision, it must contain additional invoice details such as validated GSTIN, bank account and payee details. Any invoice rejection by the IRP ends up with an invoice cancellation and regeneration. These put additional burden on the team, leaving buyers dissatisfied with the delay as amendments of e-invoices are not allowed.
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