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E-invoicing System under New GST Return

As per the last GST Council Meet, the council member collectively decided that the e-invoicing system under the new GST Return will be implemented from January 2020. However, there is a limit of aggregate turnover on which it will be applicable. So, in this article we will discuss all e-invoicing system implementation under New GST Return:

1. What is E-invoicing?

E-invoicing or electronic invoicing is a system through which already generated B2B invoices are registered on Invoice Registration Portal (IRP). It shall be noted that IRP will be controlled and managed by GSTN.

Under this new e-Invoicing system, every invoice will be given a unique identification code by the IRP. Moreover, all the data of the registered invoice will get auto-filled on both GST and e-Way Bill Portal. This auto-population of data will reduce the scope of errors in the GSTR filing and PART-A of e-Way Bill.

2. What will be the benefit of the e-Invoicing system?

Here is the list of benefits a business can enjoy by using e-invoicing system:

  1. Reduced Errors
    • The errors while furnishing data will reduce drastically as the e-invoice level data of IRP will auto-populate on the GST system and e-way bill system.
  1. Enhances Readability and inter-operation
    • Under this new e-Invoicing system the e-invoices generated on one system can be read by other easily enhancing readability and inter-operation.
  1. Real-time tracking
    • The recipient can track the invoices on a real-time basis under this new e-invoicing system.
  1. Automation of the GSTR and e-way bill filing process
    • Under this new e-invoicing system, the details of the registered invoice get auto-populated on the GST system and the e-way bill system. This helps in the automation of the GSTR and e-way bill filing process.
  1. Claiming Accurate Input Tax Credit
    • As the transaction-level data will be available to the tax authorities there will be a lesser chance of audits. This will help the taxpayer to claim accurate ITC (Input Tax Credit).

3. Parts of GSTN’s e-invoicing

There are three different parts of GSTN e-invoice system and they are:

(1) E-invoice Schema

This part of the e-invoicing system will contain the name of all the technical fields along with their description. Moreover, this part will indicate the mandatory fields that have to be furnished by the taxpayer. In addition to this, there will be some sample values together with notes explaining the working of the same.

(2) Masters

The Masters part of the e-invoicing system will specify certain GSTN pre-defined sets of inputs such as Unit Quantity Code (UQC), invoice type, state code, type of supply, and so forth.

(3) E-invoice Template

This part of the e-invoicing system is related to the template of the e-invoice as per the GST system. In this part of the e-invoicing, the compulsory fields are marked by green color whereas the non-mandatory fields are marked by yellow color.

4. Implementation of the e-Invoicing system

The taxpayer who is having an aggregate turnover of 500 Crore INR has to compulsorily generate e-invoices from 7th January 2020. However, the taxpayers whose aggregate turnover is above 100 Crore INR but less than 500 Crore INR can voluntarily generate e-invoices from 1st February 2020. However, it shall be noted that the e-invoicing system will be compulsorily implemented from 1st April 2020 for all the taxable registered person having turnover above 100 Crore INR. Here the aggregate turnover includes the turnover generated by all the GSTINs registered under the same PAN.