The Goods and Services Tax (GST) is a reform introduced to replace indirect taxes such as service tax, VAT, and hidden taxes. It is levied on the production and distribution at various stages during and in the supply of goods and services. The introduction of GST simplifies all tax payments and incurs more revenue for the government to extend their services to the people.

A particular company or business startup's GST report is measured by submitting an e-invoice. This invoice helps the government identify a company's annual turnover. Similarly, it also allows the government to combat tax evasion.

What is e-invoicing under GST?

E-voicing, or electronic voicing, is a system in which the GST Network (GSTN) electronically validates and verifies business-to-business invoices and transactions. At the 35^th GST Council Meeting, the GST Council approved implementing the e-invoicing system on large-scale enterprises. But later on, the council agreed to expand e-invoicing to medium enterprises and small businesses.

The Central Board of Indirect Taxes and Customs (CBIC) has implemented an exclusive portal to generate e-invoices. Each e-invoice is assigned a unique identification number from the Invoice Registration Portal (IRP), and the details are submitted to the GST portal and the e-way bill portal.

Advantages of E-Invoicing

1. Prevention of Tax Evasion: Implementing e-invoices under GST through a centralised portal empowers the government to monitor the companies’ annual turnover. This initiation prevents the companies from faking the reports or underreporting their sales in the e-invoice.

2. Data Accuracy: Due to the automation of the invoicing process in the portal, the process is more straightforward and time-saving. Besides, these processes are error-free and also reduce manual labour. All the uploaded data will be in the portal and will be streamlined to the GST server directly with accurate information.

Also Read - How to Get GST Number – Step-by-Step Registration Guide

3. Transparency and Efficiency: This initiation promotes transparency and efficiency in tracking GST-related records. The e-invoicing empowers efficient taxation management and settlement of online payments in the portal.

4. Secured Portal: All uploaded details will be safe and secure. A business can request the supporting staff of the e-invoicing portal to send a copy of their invoice. Indeed, the data in the portal allows the government to manage all GST-related operations.

5. Time-saving: All data submissions are digitalised and uploaded to the online portal. As the portal is integrated with automation, manual labour jobs are reduced, making the work more efficient and time-saving.

Who Should Generate E-Invoices?

Initially, the government implemented e-invoicing under GST for high-turnover enterprises. The threshold for high turnover for businesses in a year gets gradually reduced. However, from August 08, 2023, the threshold remains at ₹ 5,00,00,000 and above.

The following table informs who should comply with the GST e-invoicing

Phase	Annual Turnover	Implemented Date	Notification
I	₹ 500 crore	01.10.2020	61/2020 – Central Tax and 70/2020 – Central Tax
II	₹ 100 crore	01.01.2021	88/2020 – Central Tax
III	₹ 50 crore	01.04.2021	5/2022 – Central Tax
IV	₹ 20 crore	01.04.2022	1/2022 – Central Tax
V	₹ 10 crore	01.10.2022	17/2022 – Central Tax
VI	₹ 5 crore	01.08.2023	10/2023 – Central Tax

Regarding the above-mentioned table, all taxpayers must adhere to the e-invoicing portal from the Financial Year 2022-2023, even though the Annual Aggregate Turnover (AATO) exceeds the targeted limit in any of the Financial Years 2017 to 2022. All the aggregate turnover will include all other turnovers of GSTINs under one PAN number across India.

Illustration

Consider the following example of an XYZ Company for the Financial Years from 2017-2018 to 2021-2022:

Financial Year	Annual Turnover
2017-2018	₹ 15 crore
2018-2019	₹ 16 crore
2019-2020	₹ 25 crore
2020-2021	₹ 19 crore
2021-2022	₹ 17 crore

Here, the company must generate e-invoices from 01.04.2022 even though the present year’s turnover is only ₹ 17 crore. Because the company has surpassed ₹ 20 crore from the financial year 2019-2020.

Transactions and Documents Applicable for E-Invoicing

The GST council has listed specific documents and transactions that are under the purview of GST e-invoicing

Document Type

List of Transaction

Tax invoices, credit notes, and debit notes under Section 34 of the GST Act.

Business-to-business sale of goods and services.

Exports

Deemed exports

Supplies to Special Economic Zones (SEZ)

SEZ Developers

Supplies governed by Section 9(3) of the CGST Act

Mandatory Fields to be filled in E-Invoicing

Some mandatory details need to be furnished in the e-invoicing portal. Although some are optional, the mandatory fields enable the government to measure the total data of GST collections. The following table enlists the mandatory fields in the e-invoicing:

S. No	Name of the Fields
1	Document Type Code
2	Supplier - Legal Name
3	Supplier - GSTIN
4	Supplier - Address
5	Supplier - Place
6	Supplier - State Code
7	Supplier - Pincode
8	Document Number
9	Preceding Invoice Reference and Date
10	Document Date
11	Recipient - Legal Name
12	Recipient’s GSTIN
13	Recipient’s Address
14	Recipient’s State Code
15	Place of Supply - State Code
16	Pincode
17	Recipient Place
18	Invoice Reference Number (IRN)
19	Shipping To – GSTIN
20	Shipping To – State, State Code and Pincode
21	Dispatch From – Name, Address, Place and Pincode
22	IS – Service
23	Supply Type Code
24	Item Description
25	HSN Code
26	Item – Price
27	Assessable Value
28	GST Rate
29	IGST Vaule, CGST Value, and SGST Value
30	Total Invoice Value

Exemption on E-Invoicing

Irrespective of annual turnovers exceeding the threshold, certain enterprises and services are exempted from e-invoicing submission. They are:

1. Insurer

2. Banking Company, including Non-Banking Financial Company (NBFC).

3. Good Transport Agency

4. Registered Passenger Transportation Service

5. Registered Supplying of Service through cinematographic films in multiplex services.

6. SEZ unit

7. Department of Government and Local Authority

8. Registered Person in Rule 14 of CGST.

E-invoicing and Prevention of Tax Evasion

The implementation of e-invoicing helps prevent tax evasion by business enterprises. The following ways expound how tax evasions are presented through e-invoicing:

Read More - How to Download GST Certificate – Step-by-Step Guide

1. The tax authorities can examine all the transactions as all the e-invoices are available in the GST portal.

2. A fake report on e-invoicing cannot be submitted. Because the invoice is auto-generated before the transaction.

3. Due to the submission of GST invoices, all the tax input credits are executed efficiently through the GST portal. Besides, the authorities can track fraudulent credit claims based on e-invoicing.

Challenges in Implementing E-Invoicing

Although there are many benefits and advantages in implementing e-invoicing on GST, specific challenges need to be overcome during the implementation process.

Integrating Difficulties: Integrating existing accounting and bills into e-invoicing software requires much effort and investment. This may delay the complete implementation of e-invoicing.

Potential Staff Members: Fewer staff members are aware of e-invoicing. So, they need training and workshops to learn this holistic process.

Time-Delay: The lack of potential staff members may take more time to adjust to this process.

Updates and Changes: Keeping track of updates and changes in the procedures is required.

Conclusion

Initiating an e-invoicing system under GST is an innovative process that helps identify the taxation and changes in business transactions in our country. Although the initial stage is hard to comply with, there are many benefits, such as transparency, compliance, and efficiency in examining the annual turnover. All business enterprises should abide by this method for the better development of our country.

FAQs Related to E-Invoice Portal

1. Has the government made e-invoicing compulsory?

Yes, the government has made it compulsory.

2. To whom does the e-invoice under GST apply?

Business enterprises that exceed the threshold of ₹ 5 crore must comply with e-invoice under GST.

3. Are there any documents that need to be submitted to IRP?

The required documents that need to be submitted to IRP are invoices by the supplier, credit notes, debit notes, or any other documents per the GST law's prescribed rules.

4. What will happen if I do not generate an e-invoice?

A non-generation of e-invoices indicates a non-intimation of supply transactions to the government. The issuance of an invoice without an IRN by the taxpayer is considered invalid. However, such acts of non-compliance attract penalties.

5. Should I generate e-invoicing for ₹ 5 crore turnover?

Yes, it is mandatory to generate an e-invoice for an annual turnover that exceeds ₹ 5 crore, even if it is from the financial year of 2017-2018 onwards.

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