E-invoicing is a system where B2B invoices are electronically authenticated by the Goods and Services Tax Network (GSTN).
Businesses with an annual turnover above ₹5 crore are required to generate e-invoices, although this threshold has been reduced gradually from ₹500 crore since its introduction in October 2020. E-invoicing applies to all B2B transactions, exports, and credit/debit notes, but not for B2C invoices (except for optional QR codes).
E-invoices are generated using specified Invoice Registration Portals (IRP) provided by the GSTN. The process involves creating an invoice using your existing accounting or ERP software that integrates with the Invoice Registation Portal (IRP).
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The IRP then generates a unique Invoice Reference Number (IRN) and a QR code that must be embedded in the final invoice.
The mandatory details include supplier GSTIN, invoice number, date, recipient GSTIN, item description, quantity, unit price, total value, tax rates (CGST, SGST, IGST), and HSN codes. The generated e-invoice will also include a unique IRN, QR code, and digital signature provided by the Invoice Registration Portal (IRP).
Check your annual turnover over the last financial year. If it exceeds ₹5 crore, you must comply with e-invoicing regulations. The turnover includes all your GST-registered entities under a single PAN across India.
If your accounting or ERP software is integrated with the IRP, the e-invoicing process is mostly automated. You only need to generate invoices in your usual software, which will communicate with the IRP to obtain the IRN and QR code. Businesses with older or custom software might need to upgrade or use API integrations to stay compliant.
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Failure to generate a compliant e-invoice can lead to penalties, rejection of ITC (Input Tax Credit) claims, and other regulatory issues. The penalty can be up to ₹10,000 per invoice for non-compliance, with an additional fine for incorrect information
Once an IRN is generated, it cannot be amended. For any changes, you must cancel the e-invoice within 24 hours of its generation and then create a new one. For modifications beyond this window, adjustments need to be handled through credit/debit notes.
E-invoicing automates the reporting of B2B invoice data directly into your GSTR-1, reducing the manual effort involved in GST return filing. The IRN details are auto-populated in GSTR-1 and e-way bills (if applicable), leading to fewer errors and discrepancies.
No, manual uploads are not required. The invoice data flows automatically from the IRP to the GST portal, populating GSTR-1. However, businesses must ensure that all invoices have Invoice Registration Numbers before they are reported.
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Common issues include incorrect data, duplicate IRNs, or system errors. If rejected, correct the issues and regenerate the e-invoice. Rejections usually include an error code or description, which helps in diagnosing the problem.
Certain entities are exempt from e-invoicing requirements regardless of their turnover. These include SEZ units, insurers, banks, financial institutions, non-banking financial companies (NBFCs), and registered persons supplying passenger transportation services.
Integrating your ERP (Enterprise Resource Planning) with the e-invoicing system typically involves API ( Application Programming Interface) integration. Most ERPs provide native support or modules to connect with the Invoice Registration Portal, allowing direct submission and retrieval of invoices. In case of custom ERPs, you may need technical support to build this integration.
Yes, e-invoicing is mandatory for export transactions. Export invoices must be generated through the IRP, and they need to include additional export-specific fields like shipping details, country of supply, etc.
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