E-invoicing is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal. It is a reform related to the key document of invoice, and it is important for businesses to understand it fully and prepare accordingly. E-invoicing does not imply the generation of invoices on the GST portal but it means submitting an already generated standard invoice on a common e-invoice portal. The e-invoice system is managed by the GST Network (GSTN) and an identification number is issued against every invoice by the Invoice Registration Portal (IRP). All invoice information is transferred from the IRP portal to both the GST portal and e-way bill portal in real-time, eliminating the need for manual data entry while filing GSTR-1 return as well as generation of part-A of the e-way bills.
The e-invoice system has many advantages for businesses such as auto-reporting of invoices into GST return, auto-generation of e-way bill (where required), and faster availability of genuine input tax credit. E-invoicing can mitigate fraudulent practices in GST, especially the menace of fake invoices. 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 is also enabled by e-invoice.
The e-invoice applicability is based on the turnover criteria or e-invoice limit. The GST Council may implement the next phase of e-invoicing for businesses with an annual turnover of more than Rs.5 crore from 1st January 2023. The system may get extended to businesses with a turnover of over Rs.1 crore by the end of the next fiscal year. An e-invoice will be uploaded into the relevant GST return only once it has been validated and registered by the invoice registration system.
In summary, e-invoicing is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal. It has many advantages for businesses such as auto-reporting of invoices into GST return, auto-generation of e-way bill (where required), and faster availability of genuine input tax credit. The e-invoice applicability is based on the turnover criteria or e-invoice limit.
