E-Invoicing Under GST Law



Q) What is this concept of E-Invoicing?
  • A system in which Business to Business (B2B) invoices are authenticated electronically by the GST Network (GSTN) for further use on the common GST portal
  • A 64-digit identification number called as Invoice Reference Number (IRN) will be issued against every invoice by the Invoice Registration Portal (IRP) managed by the GSTN.
  • A Quick Response Code (QRC) will also be generated for every invoice reported which if scanned using the NIC QR code scanning application, will display details relating to a particular invoice.
  • A B2B invoice generated by a specified person (to whom E-invoicing applies) without an IRN will not be considered valid under GST.


Q) What is the primary purpose?
  • To bring in more transparency into GST reporting.
  • To curb fake invoicing and reporting of bogus transactions for benefitting from input tax credit (ITC).
  • Ease of flow of information to various returns (GSTR 1, E-Way portal etc.) and other compliance requirements.
  • It is indeed a conscious step made by the government towards digitization and transparency.


Q) To whom is it applicable?
  • E-invoicing was first made applicable from 1st April 2020 to all taxpayers having aggregate turnover exceeding INR 100 Crores. The applicability of the same was deferred to 1st October 2020.
  • Thereafter, this threshold limit was further increased to INR 500 Crores with effect from 1st January 2021.
  • From 1st April 2021 onwards, it is applicable to all registered tax payers whose aggregate turnover exceeds INR 50 Crores.
  • If the aggregate turnover of a registered person exceeds the above limits for Financial Years 2017-18 onwards, then E-Invoicing would become applicable.
  • Aggregate turnover for this purpose would have to be calculated at the PAN level i.e., taking the aggregate turnover of all units of a business.


Q) To whom is it not applicable?
  • Units in Special Economic Zones (SEZ)
  • Insurance / banking / non-banking financial companies
  • Goods transport agencies (GTA’s) supplying services in relation to transportation of goods by road in a goods carriage.
  • Suppliers of passenger transportation service.
  • Suppliers of services by way of admission to the exhibition of cinematograph films.
Q) What is the process-flow under E-Invoicing?
Q) What is the pre-requisites of E-Invoicing?
  • It is essential to ensure a confirmation from the customer before invoicing owing to the intricacies in this process of invoice cancellation once IRN is generated.
  • Before adoption, it is very important to understand and confirm the extent to which the existing accounting software / ERP can support the integration.
  • QR code generated by IRP must be printed on the physical invoice.
  • The time limit for cancellation of an E-Invoice is 24 hours. This means that an invoice once reported to IRP can be cancelled only within 24 hours from the time of generation of IRN.
  • Automatic filling up of GSTR-1 and linking of an invoice with the E-Way Bill.
  • E-invoicing adds one more layer to the GSTR-2A reconciliation and further complicates the process.


Q) Best practices under E-Invoicing?
  • Proper filling up of the offline-tool to ease process of uploading data.
  • Securing access rights on ERP and IRP for generation and cancellation of documents.
  • Daily monitoring of IRNs generated on the previous day by an independent person.
  • Printing IRN on the invoice even though optional.
  • It is advisable to obtain written declarations from vendors regarding applicability of E-Invoicing to them and confirmation of compliance, if applicable. This will serve as a basis for the recipients for availing the ITC.