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GST E-Invoice Generating Utility System Introduced by the Govt

by Amit Gupta, from SAG Infotech Private Limited, on Apr 2
GST E-invoicing was all set to commence from 1 April 2020 as concluded by the 37th GST Council held on 20 Sept 2019. Although the dates are now being extended to 30 Oct 2020.

E-invoicing was all set to commence from 1 April 2020 as concluded by the 37th GST Council meeting held on 20 September 2019. Although the dates are now being extended to 30 Oct 2020 due to the prevailing market crises (decided in 39 GST Council meeting held on 14 March 2020).

What is E-Invoicing Under GST?

A standard of invoice reporting introduced by the government. The system allows reporting of all the bills, credit/debit notes, etc. to the main portal. E-invoice under GST thus prepared by the taxpayer on his company software will then be converted in the JSON file and uploaded to the government’s official portal. The government portal will then validate the authenticity of the details and assign an IRN number.

The taxpayer not having the JSON utility can take the help of the bulk generation on e-invoice under GST portal that will allow them to create a JSON file and upload the same on the GST e-invoice portal.

GST E-Invoicing is Applicable to Whom?

As per Notification No. 70/2019 Central Tax, E-invoice is applicable to:

  1. Registered business with an annual turnover of more than RS. 100 Crore. Business to Business supplies only. 
  2. Registered business with an annual turnover of more than RS. 500 Crore. Any transaction made whether it is B2B or B2C. 
  3. All the e-invoices must be authenticated by the quick response code (QR Code).  

What is Invoice Reference Number (IRN)?

IRN is generated for every invoice, credit/debit note. It is a 64 character unique identification code assigned by the e-invoice system. The IRN number works as the unique identification number for each invoice.

What is the importance of OR Code in the GST E-Invoicing System?

A unique QR code is assigned to each invoice along with the IRN. The benefit of doing so is that the digitally created invoice becomes easily accessible as and when needed. It is also a 64 character length invoice number. 

A QR code is made from the following:

> GSTIN of Supplier
> GSTIN of Purchaser
> Invoice Number is given by the supplier
> Date of Invoice generation
> Invoice value (taxable and gross value)
> Number of line items. 
> HSN code of the main item. 
> Invoice reference number

How E-Invoicing is Beneficial?

  1. Reduces the chances of fraud as it is re-confirmed by every individual in the loop. 
  2. The entire business ecosystem of the country will apply a standard tool and technique to generate and upload the invoice. Everyone will work in synchrony. 
  3. Real-time (B2B and B2C) invoice generating facility will eliminate the need to compile all the invoices collectively at last. Thus reducing the last moment hassle.  
  4. Enhances transparency between the buyer and purchaser.  
  5. Reduction in overall compliance. The data once uploaded by the supplier will be directed to the tax government portal as well as the supplier. 
  6. Auto-generation of sales purchase register (ANX 1 and ANX 2). No need to make fresh entries while filing the returns. 
  7. No paperwork involved. Environment-friendly utility. 
  8. The buyer can now reconcile the invoice with the sellers by accepting/rejecting the invoice.   

What are the features loaded in GST E-Invoicing System?

The framework was designed keeping in mind the necessities and convenience of the taxpayers as well as the government. To facilitate the public and government equally here are the features loaded in the e-invoicing system under GST introduced by the council:

> The system allows easy operations and a user-friendly interface. 
> Easy generation and upload of all the e-invoices. 
> Various modes of GST invoice generation. Users can adopt any mode by simply registering for a particular mode.
> The facility to create the own master (like the customer, suppliers, transporters, etc.). They can further use it while generating the invoice. 
> Users can freeze the sub-users while generating the invoice (if needed). The facility helps the main user to assign roles to the sub-users on the system. 
> The system allows the user to check the IRN generated on the portal. 
> The e-invoicing utility allows the preparation of GSTR 1 based on the details of all the transactions already uploaded by the user. 
> QR code facility allows easy and fast verification of e-invoices.   

How to Generate E-Invoice Under GST?

Generating JSON File -

(a) Every registered dealer is required to generate a JSON file on its company software. 
(b) The GST invoice should be in line with the e-invoice standards suggested by the government. The dealer’s software should support the JSON file. 
(c) If the supplier has no access to the JSON file through his software, he is required to download the offline utility (separately) for the task. 
(d) Taxpayers must generate invoices in the software involving mandatory details like name, contact no., address of the vendor, GSTN, bill value, prices of the item, GST rates, etc. 
(e). Finally, a JSON file generated with all the details will be uploaded to the IRP (Invoice Registration Portal). 

Verification of the Data Entered in IRP -

The process goes on like, the data uploaded to IRP will be verified and the invoice will be generated on the portal having a Unique Invoice Number or Invoice Registration Number (IRN) > IRP will then verify the IRN from Central Registry > once the data is verified by Central registry, IRP will put a signature on the invoice and will add the QR Code to the JSON File generated. 

To be noted: Invoice having the digital signature of IRP will be considered valid.

Sharing of GST invoice-
 
IRP will direct the signed invoice to the email id of the purchaser > IRP will also transfer the invoice data from its portal to the E-Way bill portal and the ANX 1 of the supplier and ANX 2 of the Buyer. 

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