Central Board of Indirect Taxes and Customs (CBIC) announced the 6th phase of eInvoicing. It has mandated taxpayers with Rs. 5 crores turnover in any financial year from 2017-18 to issue eInvoices w.e.f. 1st August 2023.
The objective behind eInvoicing is to facilitate more transparency between businesses and the government to keep GST tax evasion in check. It is a concept wherein all B2B invoices are electronically uploaded by the supplier and authenticated by Invoice Registration Portal (IRP) with IRN and QR code.
If you’re new to the eInvoicing system, read on to know more about its applicability, generation process, implementation date, and so on.
eInvoice Applicability from 1st August 2023
eInvoicing under GST is a system where B2B invoices are generated and reported to the IRP. Then, the eInvoicing portal assigns a unique Invoice Reference Number (IRN) against every invoice as a token of authentication. This mechanism can help taxpayers in GST return filing and easy eWay Bill generation.
The 5th phase of eInvoicing started on 1st October 2022 and it applies to businesses with an annual turnover exceeding Rs. 10 crores in any previous financial year. As per the recent update, businesses with an annual turnover of more than Rs. 5 crores will be mandated to issue eInvoices from 1st August 2023.
eInvoicing Process
It is required to generate eInvoice in the prescribed format (JSON), either using ERP or billing software or an offline tool provided by the portal. Next, upload it to the IRP, which in turn validates and authenticates invoice data by IRN and QR code.
Here’s the process of generating an eInvoice:
- Generate eInvoice within your ERP system, upon successful integration of API.
- Login and upload the eInvoice file to IRP. If the software is integrated with IRP via GSP, the JSON file will be automated and send details to the IRP portal.
- The IRP portal validates key invoice elements and upon successful validation, invoice data is authenticated with an IRN number and QR code.
- In the case of integrated ERP and IRP via GSP, the software will automatically fetch and print invoice details.
What should you do from 1st August 2023?
If you are a business with an annual turnover of more than Rs. 5 crores, eInvoice is applicable and you need to electronically upload B2B invoices to the portal. It is necessary to generate eInvoice in the required format and upload it to the portal. The IRP portal will authenticate the invoice data and return the file with IRN and a digitally-signed QR code.
If you fall under this recent eInvoicing applicability, you will need eInvoicing API software to seamlessly generate bulk eInvoices without making significant changes. eInvoice is only considered valid if it has IRN and QR code that is authenticated by Invoice Registration Portal (IRP).
eInvoicing in GST – Date of Implementation
The GST Council has approved the introduction of eInvoicing in a phased manner for uploading and reporting B2B invoices to the portal.
Below is the eInvoice implementation date based on turnover criteria.
| Annual Turnover | New Date of Mandatory Implementation of eInvoice |
| Exceeding 500 crore | 1st October 2020 |
| Exceeding 100 crore | 1st January 2021 |
| Exceeding 50 crore | 1st April 2021 |
| Exceeding 20 crore | 1st April 2022 |
| Exceeding 10 crore | 1st October 2022 |
| Exceeding 5 crore | 1st August 2023 |
As mentioned above in the table, the eInvoice system is already in place for businesses with a turnover of more than Rs. 500 crores from 1st October 2020. The mandatory implementation of eInvoicing for all businesses with turnover exceeding Rs. 50 crores were from 1st April 2021.
Later, businesses with turnover over Rs. 20 crores were required to generate eInvoice from 1st April 2022, followed by mandating generation for businesses T.O. exceeding Rs. 10 crores from 1st October 2022. Recently, CBIC notified that eInvoicing will be applicable for businesses with an annual turnover exceeding Rs. 5 crores from 1st August 2023.
Earlier, the government only considered large-scale businesses to start with the eInvoicing system. But now gradually, in a phased manner, more businesses are brought into this scope by reducing the threshold limit.
Business Preparedness for eInvoicing under GST
To sail smoothly as a business, use an eInvoicing API system that can be integrated into your existing ERP and generate eInvoice data in a prescribed format. It interacts with the IRP portal to complete the eInvoicing process, without manual intervention.
If you’re new to the eInvoicing concept, the primary step is to understand eInvoice fundamentals and be familiar with the process. Secondly, consider an eInvoicing system that allows bulk operation and can interact with the IRP system to generate eInvoices.
Type of Documents Reported to the GST System
The invoice issued by the supplier to the customer is a primary document covered under the eInvoicing system. Besides invoices, other documents are required to be reported to IRP by the creator of the document.
The list of documents includes:
- Invoice by supplier
- Credit note by the supplier
- Debit note by the supplier
- Any document as notified
Overall, documents that have a repercussion on input tax credit (ITC) shall be covered under eInvoice.
Conclusion:
From 1st August 2023, eInvoicing shall apply to those with a turnover of more than Rs. 5 crores up to Rs. 10 crores.
It will reduce the chances of fake GST invoices and only genuine ITC can be claimed as all invoices need to be generated through the GST portal. eInvoices created on one software in a prescribed format allow interoperability and reduce data entry errors.