India e-Invoicing

What is e-Invoicing in India?

e-Invoices or electronic invoices are the digital, machine-readable versions of India’s Goods and Services Tax (GST) invoices. They have been introduced to reduce tax evasion.

What is a GST invoice?

A GST invoice is a bill of products or services provided to a customer by a supplier or service provider. It specifically indicates the services and products, along with the total transaction amount, as well as goods and services tax charged on them.

Are electronic invoices mandatory?

India’s GST Council has approved the phased implementation of an e-Invoicing for reporting of business-to-business (B2B) invoices using the GST system. It first started on January 1st, 2020 on a voluntary basis.

Who is eligible for e-Invoicing in India?

Every taxpayer can update their ERP accounting software to issue e-Invoices. 

The clock is ticking for a category Indian taxpayers. The mandatory sending and QR code regulation officially started on October 1st, 2020. However, the government allowed a grace period until November 1st to allow businesses to use invoice registration numbers for the invoices issued in October.

Timeline announced like below;

• From October 2020 – All registered businesses whose annual turnover  exceeding Rs. 500 Crore (ca EUR 56.000.000)
• From January 2021 – All registered businesses whose annual turnover  exceeding  Rs. 100 Crore (ca EUR 11.200.000)
• From April 2021 – All registered businesses whose annual turnover  exceedingRs. 50 Crore (ca EUR 5.600.000)
• From April 2022 – All registered businesses whose annual turnover  exceeding  Rs. 20 Crore (ca EUR 2.300.000)
• From 1st October 2022 – All registered businesses whose annual turnover  exceeding  Rs. 10 Crore
• From August 2023 –All registered businesses whose annual turnover  exceedingRs. 5 Crore (ca EUR 575.000)

All registered businesses according to the released timeline, must be ready to issue and report invoices in the electronic JSON format.  This is expected to be extended to smaller companies in the near future.

Who is exempt from e-Invoice in India?

Businesses with revenues of less than Rs 500 crore are exempt. It should be noted that certain classes of registered entities (insurance companies, banking companies, financial institutions, non-banking financial institutions, GTAs, passenger transportation services, etc.) are also exempt.

How do I enable GST e-Invoicing?

1. Reporting: The liable companies issue the electronic invoices and transmit them to the Invoice Reference Portal (IRP) as a first step. 
2. Validation: For each successful sending, the IRP will generate a unique Invoice Reference Number (IRN) and a QR code, which will be attached to the e-Invoice. Then the system will digitally sign the e-Invoice and return it to the issuer.
3. Invoicing: Finally, the issuer sends the invoice with the QR code returned from the portal to the recipient, either as a paper or PDF copy. 

The QR code will contain the IRN and some important parameters of the invoice such as the GSTIN of the supplier and buyer, the invoice number, the invoice date, the invoice value, and the total tax amount. This will enable offline verification using the mobile app. Businesses do not have to indicate IRN separately on an invoice. as it is already embedded in the QR code.

Furthermore, all the invoice information sent will get auto-populated in taxpayers’ GST returns. Annex 1 will be filled automatically once the IRN is issued, and Part A will be updated if an e-Way Bill needs to be issued. The recipient’s Annex 2 will also be updated automatically.