E-Invoicing Under GST: Part 12 – Frequently asked questions on e-invoicing
- Feb 19, 2020 | Divita S Gupta
The government introduced a new GST e-invoice scheme under which businesses with a turnover of Rs 500 crore and above will generate all invoices on a centralised government portal starting October 1, 2020. Earlier, the turnover threshold for businesses was set at Rs 100 crore.
E-invoicing has been introduced on a voluntary basis for now starting January 2020, but from April 2020 it will become mandatory and if you wish to incorporate e-invoicing into your business operations, you need to know everything there is to know before you start this process. Here are some frequently asked questions about e-invoicing.
Will businesses now be required to generate e-invoices on the GST portal or the e-invoice portal or the IRN portal?
No. Unlike what most people believe, e-invoicing is NOT the generation of invoices on the GST portal or any other government portal. Businesses will continue to generate e-invoices on their internal systems – whether ERP or their accounting/billing systems or any other application.
Is the current e-invoice schema to be issued by the Government or does it have to be maintained in the IT system by the taxpayer?
The e-invoice mechanism is currently limited to specifying the schema and standard for interoperability between accounting or billing software. Taxpayers will be required to generate their own invoices using the specified schema on accounting billing software. The GST portal or Invoice Registration Portal will not be providing a facility to generate invoices. The Invoice Registration Portal is for reporting invoice data.
Will there be separate invoice formats required for Traders, Medical Shops, Professionals and Contractors?
No. All kinds of businesses will be able to use the same e-invoicing schema. This schema will have mandatory and non-mandatory fields and will cover all business needs across various sectors and verticals.
How long will the uploaded e-invoice be available on the Government portal?
Once an e-invoice is uploaded to the Invoice Registration Portal, it will be uploaded into the GST ANX-1 after being validated by the IRP. Once validated and available under ANX-1, it will be visible to the counterparty under ANX-2. This will be visible for the entire financial year and will be available later under archives. Taxpayers must note that data will only be visible under the Invoice Registration Portal for 24 hours.
If all businesses upload their invoices at the same time, how will the server react?
Since businesses will not be using the Invoice Registration Portal to generate invoices and will be required to generate invoices at their end, uploading the invoice to the IRP will not impact their servers. The capacity of the system at IRP has been built so as to handle the envisaged loads of simultaneous upload based on data reported in GSTR1 for the last two years. Subsequently, multiple invoice registrars will be made available that will be able to distribute the load for invoice registration.
Is it possible to auto-populate fields of the e-invoice based on credentials entered?
Since the invoice generation will happen at the business end, a facility to auto-populate fields of their-invoice can be built into the ERP or invoicing system of the seller. Most of such software provide this facility in the name of item master, supplier master, buyer master etc.
Will it be possible to add transporter details?
Transporter details can only be entered into the e-way bill system and cannot be auto-populated.
How do we navigate between optional and mandatory fields under an e-invoice schema?
Mandatory fields are those that MUST be filled under an invoice to be valid under the prescribed e-Invoice Standard. The optional ones are those that may be required for specific business needs of the seller/business. These have been incorporated in the schema based on current business practices in India. The registration of an e-invoice will only be possible once it has ALL the mandatory fields uploaded into the Invoice registration Portal (IRP). A mandatory field not having any value can be reported as NIL.
What is the maximum number of line items supported by an e-invoice?
The maximum number of line items per e-invoice is 100.
Does the e-invoice schema provide the maximum length of the various fields in the schema?
Yes. Each field specification has been provided with the type of characters that are to be entered and its length as well.
What will be the threshold requirement for e-Invoicing applicability for businesses?
As notified by the Government recently, businesses with more than INR 500 Crores annual turnover on an aggregate basis (based on PAN) are required to generate all invoices in the new e-invoice format starting October 1, 2020. Earlier, the turnover threshold for businesses was set at INR 100 crores. Later, the e-invoice requirement under GST compliance will be rolled out for lower turnover businesses as well in a phased manner.
Will the e-invoice have columns to show invoice currency?
Yes, the seller can display the currency, although the default currency will be INR.
Will the IRN be captured in the Supplier’s ERP?
The IRN (hash) will be generated by the GST System using the GSTIN of the supplier or document creator along with the financial year and the unique serial number of the document/invoice. The IRN can also be generated by the seller.
- The serial number of invoice will be unique for a GSTIN for a Fin Year and the same has to be captured by the Supplier’s ERP.
- The supplier has to keep the IRN against each of its invoices. It will be advisable to keep the same in the ERP as invoice without IRN will not be a legal document.
Will the e-invoice generated be required to be signed again by the taxpayer?
Signature by the taxpayer is not mandatory. If a signed e-invoice is sent to IRP, the same will be accepted. Once the e-invoice is validated, it will be digitally signed by the IRP. The signed e-invoice along with QR code will be shared with the creator of the documents as well as with the recipient. Once it is registered, it will not be required to be signed by anyone else.
Is the facility of adding a discount amount at line item-level mandatory in nature?
The e-invoice has a provision for capturing discount at the line item level. The discounting at line item level is to be mentioned only if and when it is applicable for the particular transaction.
Can the seller place their logo in the e-Invoice Template?
There won't be a place holder provided in the e-invoice schema for the company logo. The software company will need to provide this facility in the billing/accounting software so that it can be printed on his invoice using his printer. However, the Logo will not be sent to the IRP. In a nutshell, it will not be part of the JSON file that will be uploaded to the IRP.
Will there be a space provided for the QR code to be placed?
The QR code will be provided to the seller once they upload the invoice into the Invoice Registration system and the same is registered there. The seller has the option to print the QR code on their invoice.
Will we be able to provide the address and bill-to party and PAN details in the e-invoice?
Yes. It will be possible to provide all these details in the placeholders provided in the schema.
Would the Supplier be allowed to issue their own invoice and if yes, will they be required to mention the Invoice number and the IRN?
Yes, the supplier will issue their own system’s invoice, in the standard e-invoice schema that has been published. Invoice number is a mandatory item under GST and hence will be required for e-invoice. IRN (Hash) can be provided after the e-invoice has been successfully reported to the IRP. The E-Invoice will be valid only if it has IRN.
The current e-invoice template provides for a total discount for all the products or services. Will this be possible under the e-invoice?
Yes. There are mechanisms and placeholders to provide a discount on item level as well as total discounts on the invoice value.
Will there be an option for linking multiple invoices in case of debit note/ credit note?
Yes, it will be allowed to link the credit/debit notes as hitherto fore.
Will the e-invoice schema cater to reverse charge mechanism?
Yes. The e-invoice system has a reverse charge reporting mechanism.
Will it be possible for bulk uploading of invoices for e-invoicing as well?
Invoices will have to be uploaded on the IRP one at a time. The IRP will be able to handle a large sequence of invoices for registration and validation. Essentially, a bulk upload will be required by large taxpayers who generate a large number of invoices. Their ERP or accounting system will have to be designed in such a way that it makes a request one by one. For the user, it will not make any difference.
Will the requirement for invoices to be authenticated by the supplier using a digital signature/signature be done away with?
The seller will need to upload the e-invoice into the Invoice Registration Portal. The signing of e-invoice by the seller is not mandatory.
Will there be a time limit for e-invoice uploading for registration?
Yes, that time limit will be notified by the Government. Without registration of e-invoice, the same will not be valid. Once uploaded to the invoice registration portal (IRP), it will be registered immediately, on a real-time basis.
Will it be possible to allow invoices that are registered on the invoice registration system/portal to be downloaded and/or saved on handheld devices?
Yes. The IRP, after registering the invoice, will share a digitally signed e-invoice for record of the supplier. It will also be sent to the email address of the recipient provided in the e-invoice.
Will it be possible to print the e-invoice?
Yes. It will be possible for both the seller as well as the buyer to print the invoice, using the QR code as well as signed e-invoice returned by the Invoice Registration Portal (IRP).
Can e-invoices generated through the GST system be partially/fully cancelled?
The e-invoice mechanism enables invoices to be cancelled. But it cannot be partially cancelled and must be fully cancelled. This will have to be reported to IRP within 24 hours. Any cancellation after 24hrs could not be possible on IRP, however one can manually cancel the same on the GST portal before filing the returns.
How would amendments be allowed in e-invoice?
Amendments to the e-invoice are allowed on the GST portal as per provisions of GST law. All amendments to the e-invoice will be done on the GST portal only.
With the introduction of e-invoices, what are the documents that need to be carried during transit of goods?
For transportation of goods, the e-way bill will continue to be mandatory, based on the invoice value guidelines, as hitherto fore.
Will exports require e-invoice compliance?
Yes. The e-invoice schema caters to the export invoices as well. The e-invoice schema is based on the most common standard, this will help the buyer’s system to read the e-invoice.
Does the e-invoice allow the declaration of export invoices/ zero-rated supplies?
Yes. It allows the declaration of export invoices / zero-rated supplies.
What will be the workflow of the end to end the e-invoice mechanism?
The end to end workflow will be provided by at the time of rollout of the e-invoice system.
Will the industry be provided sufficient time for preparation?
The current e-invoicing system is available on a voluntary basis and won't be mandatory until April 2020. Businesses have plenty of time to prepare. Initially, the e-invoice mechanism will be allowed for taxpayers above a certain turnover or above a certain invoice value or also to volunteers.
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Follow our E-invoicing under GST Series on the links below:
- E-Invoicing Under GST: Part 1 - What is an e-invoice?
- E-Invoicing Under GST: Part 2 - E-invoicing and the Tax Department
- E-Invoicing Under GST: Part 3 - Benefits of e-invoicing
- E-Invoicing Under GST: Part 4 - Documents to be reported under e-invoicing
- E-Invoicing Under GST: Part 5 - How does e-invoicing work?
- E-Invoicing Under GST: Part 6 – E-Invoicing Workflow from Supplier to Invoice Registration Portal
- E-Invoicing Under GST: Part 7 - Workflow from IRP to Buyer and GSTN or E-Way Bill System
- E-Invoicing Under GST: Part 8 - Everything you need to know about Invoice Registration Portal
- E-Invoicing Under GST: Part 9 – Features of e-invoice system you need to know
- E-Invoicing Under GST: Part 10 – How to register your e-invoice
- E-Invoicing Under GST: Part 11 - Myths around e-invoicing
- E-Invoicing Under GST: Part 12 – Frequently asked questions on e-invoicing