E-invoicing under New GST Return – What is GSTN’s e-Invoicing Software? & Implementation Date
The transportation of goods from one place to another is facilitated by the filing of ‘E-Way Bills’ on the common GST portal. Similarly, the GST Council, in its 35th meeting, has decided to implement a system of e-invoicing, which will be applicable to specified categories of persons. e-invoicing is not the generation of invoice on GST portal. It is a myth. e-invoicing is the submission of an already generated standard invoice on a common portal. Thus it automates multi-purpose reporting with a one-time input of invoice details.
1. What is E-invoicing?
‘E-invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal.
Under the proposed electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP) to be managed by the GST Network(GSTN).
All invoice information will be transferred from this portal to both the GST portal and e-way bill portal in real-time.
Therefore, it will eliminate the need for manual data entry while filing ANX-1/GST returns as well as generation of part-A of the e-way bills, as the information is passed directly by the IRP to GST portal.
2. What is the current system in place for issuing invoices?
Currently, businesses generate invoices through various softwares, and the details of these invoices are manually uploaded in the GSTR-1 return. The invoice information is thereafter reflected in GSTR-2A for the recipients for viewing only. On the other hand, the consignor or transporters must generate e-way bill by again importing the invoices in excel or JSON manually.
Under the new return system, an annexure in form GST ANX-1 will mostly take the place of the GSTR-1 return. However, the process of generating and uploading invoice details will remain the same. It will be done by importing using the excel tool/JSON or by the online entry of data. A seamless flow of data is expected for e-way bill generation. e-invoicing will be the key tool to enable this.
3. How will Electronic invoicing benefit businesses?
Businesses will have the following benefits by using e-invoice initiated by GSTN:
- E-invoice resolves and plugs a major gap in data reconciliation under GST to reduce mismatch errors.
- E-invoices created on one software can be read by another, allowing interoperability and help reduce data entry errors.
- Real-time tracking of invoices prepared by the supplier is enabled by e-invoice.
- Backward integration and automation of the tax return filing process – the relevant details of the invoices would be auto-populated in the various returns, especially for generating the part-A of e-way bills.
- Faster availability of genuine input tax credit.
- Lesser possibility of audits/surveys by the tax authorities since the information they require is available at a transaction level.
4. What is GSTN’s e-invoicing initiative?
GSTN had released the draft version of e-invoice format in an excel template and made it available for public feedback around 20 August 2019. The same was approved by the GST Council with some alterations at the 37th GST Council meeting held on 20 September 2019. GSTN associated with ICAI drafted the format to be compliant with the GST and other Indian tax laws. Apart from these, the format adheres to international and various industry standards. The e-invoice format looks exhaustive and a single format caters to different industries and businesses.
Any existing accounting or invoicing software/ application provider (SAP/Tally/Busy) must follow the PEPPOL standard for invoice generation. Taxpayers will, therefore, be able to generate a compliant invoice at the source. GSTN referred the PEPPOL (Pan European Public Procurement Online) standard, which works on Univeral Business Language (UBL) version of electronic XML. Currently, PEPPOL is the most used standard across the globe. The system advocates diversified business applications and trading communities to exchange information along their supply chains using a common or a standard format. It enables a single point of data entry into electronic commerce for businesses. Thereafter, the data flows across different portals with the help of an IRP.
The GSTN’s e-invoice will contain the following parts:
(1) E-invoice schema: It consists of the technical field name, description of each field, whether it is mandatory or not, and has a few sample values along with explanatory notes.
(2) Masters: Masters will specify the set of inputs for certain fields, that are pre-defined by GSTN itself. It includes fields like UQC, State Code, invoice type, supply type, etc.
(3) E-invoice template: The template is as per the GST rules and enables the reader to correlate the terms used in other sheets. The mandatory fields are marked in green and optional fields are marked in yellow.
5. When will E-invoicing get implemented?
While no exact date has been provided yet, electronic invoicing is proposed to be implemented from 1st January 2020. It will be implemented in a phased manner by GSTN. Similar to the new GST return filing system, the electronic invoicing system will first be available on a trial basis or voluntary compliance.