What are some common questions about e-invoicing?

Share

Date: 23 Oct 2022


Common Questions Asked About E-Invoicing

There are some frequently asked questions for e-invoicing which are discussed below: 

To whom does E-invoicing apply?

All companies with a combined yearly turnover of Rs. 500 crores would be required to use electronic invoicing. However, the government has exempted some enterprises from using electronic invoicing, including SEZ Units & Developers, Insurance Companies, Banking Companies, Financial Institutes, Passenger Transportation services, etc. E-Invoicing applies to export, RCM, B2B, and B2G invoices, credit notes, and debit notes.

How does the E-invoicing model work?

Without evidence of the exchange being made available to the government, a transaction is carried out directly between the supplier and beneficiary. The e-invoicing model specifies the standard, schema, and format for invoice production, with the businesses continuing to generate invoices on their separate ERPs as they have in the past. This guarantees that the invoices are accurate and readable by machines.

The generation of the invoice is the responsibility of the taxpayer. It must be recorded at the generation time to the GST Invoice Registration Portal (IRP). A specific Invoice Reference Number (IRN), a digital signature for the e-Invoice, and the OR code are all added as soon as the invoice is reported to the IRP system. The QR Code will contain the key information from the e-invoice and return it to the taxpayer who reported the transaction. Additionally, the IRP will provide the seller's registered email ID with the signed e-invoice.

Where can one generate an E-invoice?

The IRP, or Invoice Registration Portal, is where taxpayers must create all e-invoices. Other ways to generate an e-Invoice using APIs through ASPs and GSPs have also been made available by the government. You can also produce an e-Invoice directly from your ERP. using these APIs

What supplies are covered under E-invoicing?

Currently, e-Invoicing applies to

  • Supplies provided to registered users (i.e., B2B supplies),

  • Supplying SEZs with goods (with or without tax payment), 

  • Exports (with or without tax payment),

  • Listed as exports,

are made by the group of taxpayers who have been notified.

Can a reported e-invoice be partially canceled?

No. It must be canceled entirely. No reported e-invoice can be partially canceled. Invoice cancellation is subject to accounting standards and any other laws or regulations that may be in effect.

What is the workflow of E-invoicing?

The workflow of an e-invoice has two main components. The interaction between the company/supplier and invoice registration portal is the first phase (IRP). Invoices are created by the supplier, submitting a JSON file to the IRP. Before sending the invoice back to the supplier, the IRP verifies the data create an IRN and QR code, and digitally signs the document.

The interplay between the GST/E-Way Bill and IRP systems makes up the second portion. The GSTR-1 return is automatically filled out after the e-invoice data is transmitted to the GST system. The e-invoice data is also delivered to the e-way bill system, which generates Part A of the e-way bill and Part B if transporter information is provided. Otherwise, Part B can be produced at a later time. As a result, the workflow for a taxpayer has been dramatically streamlined by e-invoicing by removing the need for repeated data entries.

What are sub-users, and why are they necessary for E-invoicing?

In addition to their primary location, businesses often operate from multiple locations. When there are several business points, it may be challenging for organisations to generate & operate e-invoices. GSTIN has made it possible to set up sub-users who can generate and manage e-invoices from multiple locations using the same login credentials. The administrator may give sub-users authority to carry out tasks at their discretion.

How will the e-invoicing system be combined with GST returns?

Only once an e-Invoice has been verified and registered by the invoice registration system will it be entered into the appropriate GST return. The taxpayer can read and change the validation once completed in the GSTR-1 return. As appropriate, the recipient's (buyer's) GSTR-2A/2B/4A or 6A, as appropriate, will auto-populate the data from the supplier's GSTR-1 return.

The primary goal of the tax department is to make it possible for GST returns to be pre-populated, which will lessen issues with reconciliation. The information in the invoices can be pre-populated into the appropriate tables of the tax returns once e-Invoicing has been established, eliminating the requirement for new data entry.

What is the SCHEMA Format?

The government has made it possible to create e-invoices using a uniform format that will apply to all business and transaction kinds. Specific fields in the SCHEMA format are required, while others are optional. As the IRP will check the e-Invoice for these fields, taxpayers must ensure that they adhere to this structure and fill out all required data. There are 12 sections in the SCHEMA format, of which taxpayers must fill out 5 and 7 are optional.

What information will be in an electronic invoice?

According to the GSTN's draft format, an e-Invoice will have the following components:

E-Invoice SCHEMA: The names and descriptions of each technical field are included in this section of the e-invoice. It will also state whether a field is required or not, and it consists of some sample values and explanations.

Masters: Masters will define the set of inputs for a few pre-defined fields in GSTN. Such fields as UQC, State Code, Invoice Type, Supply Type, and others are included.

E-Invoice Template: The template allows the reader to correlate the terminology used in other sheets and is in accordance with the GST laws. Green indicates required fields; yellow indicates optional fields.

What can you do if your account on the e-invoice system becomes frozen?

If your account becomes inactive on the e-invoice site, your registration has been canceled, or your GSTIN has been deactivated on the GST common portal. A taxpayer should go to the GST Common Portal and use the 'Search Taxpayer' tab to see the current status of his GSTIN.

How can I make an E-invoice?

The techniques listed below have a different approach to creating an e-invoice:

  • Offline device

  • GST Suvidha Provider is used.

  • directly integrating

  • Through the API connection of sibling company GSTIN

  • Using E-way Bill API login information

Download the offline tool from the portal at https://einvoice1.gst.gov.in if you want to generate IRNs in bulk while offline. Enter the invoice information and check your entries. Creating the JSON file, then uploading it after entering the portal. The taxpayer must register his APIs for the remaining methods by logging into the e-invoice site, then connect and generate IRN and e-way bills using the API credentials.

Are B2C invoices also subject to e-Invoicing? 

B2C invoices are not eligible for e-Invoicing, and taxpayers should avoid attempting to validate them because the IRP will reject them. Businesses must, however, self-generated QR Codes for B2C Invoices beginning in December 2020. For recipients to scan and pay, these QR Codes will include the information from the e-Invoice as well as a payment reference link.

How can the legitimacy of an electronic invoice be confirmed?

By uploading the signed JSON into the electronic invoice system and using the "Verify Signed Invoice" option from the list of search options, anyone can confirm the accuracy of an e-invoice. The QR code printed on the invoice can also be verified by downloading the QR Code Verify app.

How can one determine whether a specific supplier must send out electronic invoices?

The relevant taxpayer is responsible for fulfilling the requirements of Rule 48(4) before issuing an electronic invoice. However, as a convenience measure, starting with FY 2017–18, taxpayers who have exceeded the required turnover in any fiscal year are now eligible to disclose bills to the IRP.

By choosing "Search" -> "e-invoice status of the taxpayer" on the e-invoice site, one can look up the enablement status of a GSTIN. This list of GSTINs is solely based on GSTR-3B turnover information provided to the GSTN. Additionally, it can include exempt entities or entities for whom e-invoicing is inappropriate for various reasons. As a result, having an enabling status does not automatically entail that the taxpayer must provide electronic invoices. Users can also view a taxpayer's turnover slab by selecting the "Search Taxpayer" or "Know Your Supplier" tab on the GST portal.