E-Invoicing

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:

1. E-invoice resolves and plugs a major gap in data reconciliation

under GST to reduce mismatch errors.
2. E-invoices created on one software can be read by another,
allowing interoperability and help reduce data entry errors.
 3. Real-time tracking of invoices prepared by the supplier is enabled
by e-invoice.
4. 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.
5. Faster availability of genuine input tax credit.
6. 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?

The taxpayers with annual aggregate turnover of over Rs 500 Crore can voluntarily
generate e-invoices starting from 7 January 2020 through APIs. Whereas the taxpayers
with the turnover over Rs 100 but less than Rs 500 Crore can join them from 1 February
2020. The electronic invoicing will be mandatorily implemented from 1 April 2020. for
taxpayers with turnover over Rs 100 Crore. The aggregate turnover will include the
turnover of all GSTINs under a single PAN, across India.

6. What is the process of getting an e-

invoice?
The following are the stages involved in generating or raising an e-invoice.
1: Taxpayer must ensure to use the reconfigured ERP system as per PEPPOL
standard. He must coordinate with the software service provider to incorporate the
standard set for e-invoicing, i.e. e-invoice schema (standards) and must have the
mandatory parameters, at least. It should be capable of generating the JSON file for
multiple invoices together. Those taxpayers not having any software will be provided
offline utility. At a future date when e-invoicing applies to small taxpayers, they can
choose from 8 different accounting and billing softwares all tied up with the GSTN. It is
available free of cost. It is available both as online (cloud-based) as well as offline
(installed on the computer system of the user).
2: The taxpayer must thereafter raise a normal invoice on that software. He must give
all the necessary details like, billing name and address, GSTN of the supplier,
transaction value, Item rate, GST rate applicable, tax amount, etc.
3: Upload the details of invoice especially mandatory fields onto the IRP using the
JSON file only. It can be done directly or through GSPs or APIs(apps or software
providers). The IRP will act as the central registrar for e-invoicing and its authentication.
There are several modes of interacting with IRP such as web-based, API-based, SMS
based, mobile app-based, an offline tool-based, and GSP based.
4: IRP will validate the key details of the B2B invoice, checks for any duplications and
generates an invoice reference number (hash) for reference. There are four parameters:
Seller GSTIN, Invoice number, and FY in YYYY-YY) and document type (INV/DN/CN).
5: IRP generates the invoice reference number (IRN), digitally signs the invoice and
creates a QR code in Output JSON for the supplier. On the other hand, the seller of the
supply will get intimated of the e-invoice generation through email (if provided in the
invoice).
6: IRP will send the authenticated payload to GST portal for GST returns. Additionally,
details will be forwarded to the e-way bill portal, if applicable. ANX-1 of seller and ANX-2
of the buyer gets auto-filled for the relevant tax period. In turn, it determines the tax
liability.
A taxpayer can continue to print his invoice as being done presently with logo. e-
invoicing system only mandates all taxpayers to report invoices on IRP in electronic
format.

7. How will E-invoicing curb tax evasion?

It will help in curbing tax evasion in the following ways:

 Tax authorities will have access to transactions as they take place in real-time
since the e-invoice will have to be compulsorily generated through the GST
portal.
 There will be less scope for the manipulation of invoices since the invoice gets
generated prior to carrying out a transaction.
 It will reduce the chances of fake GST invoices and the only genuine input tax
credit can be claimed as all invoices need to be generated through the GST
portal. Since the input credit can be matched with output tax details, it becomes
easier for GSTN to track fake tax credit claims.

7. What are the mandatory fields of an e-

invoice?
E-invoice must primarily adhere to the GST invoicing rules. Apart from this, it should
also accommodate the invoicing system or policies followed by each industry or sector
in India. Certain information is made mandatory whereas the rest of them is optional for
businesses.
Many fields are also made optional and users can choose to fill up relevant fields only. It
has also provided a description for every field along with the sample inputs for the
interested users. One can see that certain required fields from the e-way bill format are
included now in e-invoice such as the sub supply type.
Below is the gist of the contents of e-invoice:

1. 18 Sections (mandatory + optional) consisting of total 133 fields

2. Out of the 18 Sections – 8 are Mandatory and 10 are Optional
3. Within 8 Mandatory sections, 34 fields are mandatory and 46 are optional. Must
have 33 mandatory fields in the e-invoice.
4. Within 10 Optional sections, 35 fields are optional and 17 are mandatory (if you
opt for any optional section, these are mandatory fields)
The following fields of an invoice must be compulsorily declared in an e-invoice:

Sl. Name of the field List of Choices/ Remarks

no Specifications/Sample Inputs
.

1 Invoice Type Max length: 10 Denotation for

regular, SEZ
Can be one of the following: supplies with
payment, SEZ
Reg/SEZP/SEZWP/EXP/EXPW supplies without
P/DEXP payment,
deemed exports,
sale from the
bonded
warehouse,
export without
payment of tax,
export with
payment of tax

2 InvoiceType Code Max length: 50 A subcode may

Will be auto-generated by also be
GSTIN based on the invoice automatically
type specified by the user added by the
GSTN

3 Supplier_GSTIN Max length: 15  GSTIN of the

Must be alphanumeric  supplier raising
the e-invoice

4 Invoice Number Max length: 16 For unique

Sample input is  identification of
the invoice, a
“ Sa/1/2019”
sequential
number is
required within
the business
context, time-
frame, operating
systems and
records of the
 supplier. No
identification
scheme is to be
used

5 Preceeding_Invoice_Refe Max length:16 Detail of original

rence Sample input is  invoice which is
being amended
“ Sa/1/2019”
by a subsequent
document such
as a debit and
credit note. It is
required to keep
future expansion
of e-versions of
credit notes,
debit notes and
other documents
required under
GST

6 Invoice Date String (DD/MM/YYYY) as per The date when

the technical field specification the invoice was
issued. However,
the format under
explanatory
notes refers to
‘YYYY-MM-DD’.
Further clarity
will be required

7 Reverse Charge ‘Y’ or ‘N’ as a single character Mention whether

or not the
particular supply
is subject to
reverse charge
mechanism

8 GSTIN Max length: 15 The GSTIN of

the buyer to be
declared here

9 State Code Max length: 2 The place of

supply state
code to be
declared here
10 Place  Max length: 50 The place
(locality/district/st
ate) of the buyer
on whom the
invoice is raised/
billed to must be
declared here if
any

11 Pincode Six digit code The place

(locality/district/st
ate) of the buyer
on whom the
invoice is raised/
billed to must be
declared here if
any

12 Unique Identification Abbreviated as ‘UUID’  A unique number

Number Max length: 50 will be generated
by GSTN after
Sample input is ‘649b01ft’
uploading of the
e-invoice on the
GSTN portal. An
acknowledgeme
nt will be sent
back to the
supplier after the
successful
acceptance of
the e-invoice by
the portal

13 ShippingTo_GSTIN Max length: 15 GSTIN of the

buyer himself or
the person to
whom the
particular item is
being delivered
to

14 Shipping To_State Max length: 100 State pertaining

to the place to
which the goods
and services
invoiced were or
 are delivered

15 Supply Type Max length: 2  It can be either

Sample values can be either of interstate or
Supply/export/Job work intrastate supply.
Further, it can be
outward or
inward supply
 
Moreover, the
supply can
further be
classified as
import, export,
job work, for own
use,   return,
sales return,
others,
SKD/CKD/Lots,
line sales,
recipients not
known, exhibition
or fairs

16 Transaction Mode Max length: 2 A combination of

The schema specifies that the a ‘Bill To Ship
field can have either of To’ and ‘Bill
regular/bill to/ship to From Dispatch
From’  is also
allowed

17 Item Description Max length: 300 Simply put, the

The sample value is ‘Mobile’ relevant
description
The schema document refers to
generally used
this as the ‘identification scheme
for the item in
identifier of the Item
the trade.
classification identifier’
However, more
clarity is needed
on how it needs
to be described
for every two or
more items
belonging to the
same HSN code 
18 Quantity Decimal (13,2) The number of
Sample value is ‘10’ items (goods or
services) that is
charged on the
invoice as a line
item.

19 Rate Decimal (10,2) The unit price,

Sample value is ‘50’ exclusive of
GST, before
subtracting item
price discount,
can not be
negative

20 Assessable Value Decimal (13,2) The price of an

Sample value is ‘5000’ item, exclusive of
GST, after
subtracting item
price discount.
Hence, Gross
price (-) Discount
= Net price item,
if any cash
discount is
provided at the
time of sale

21 GST Rate Decimal (3,2) The GST rate

Sample value is ‘5’ represented as a
percentage that
is applicable to
the item being
invoiced

22 IGST Value, CGST Value Decimal (11,2) For each

and SGST Value Sample value is ‘650.00’ individual item,
Separately IGST, CGST and
SGST amounts
have to be
specified

23 Total Invoice Value Decimal (11,2) The total amount

of the Invoice
with GST. Must
be rounded to a
maximum of 2
decimals