E-invoice under GST refers to a digital invoicing system designed for real-time validation and error-free compliance. Learn who has to issue e-invoices, which types of transactions are included, and what is the process to generate e-invoices efficiently. Know the benefits of e-invoicing and how it facilitates GST reporting.

What Is an E-Invoice Under GST?

An e-invoice, or electronic invoice, is an electronically authenticated invoice issued by businesses for reporting on the GSTN (Goods and Services Tax Network), thus keeping all transactions in real-time and error-free GST filings. The e-invoice is registered on the Invoice Registration Portal, which provides an IRN, or invoice reference number, and a QR code.

Who Needs to Generate E-Invoices?

For which businesses is e-invoicing mandatory? At present, the compulsion for generation of e-invoices is there for the businesses whose annual turnover crosses ₹5 crores. Both B2B and B2G transactions are in this bracket.

Threshold Limits for E-Invoicing Over the Years

• October 2020: ₹500 crore

• January 2021: ₹100 crore

• April 2021: ₹50 crore

• April 2022: ₹20 crore

• October 2022: ₹10 crore

• August 2023: ₹5 crore (current)

Applicability: Which Transactions Require E-Invoicing?

E-invoicing applies to:

•  B2B transactions (business-to-business)

•  B2G transactions (Business to Government)

•  Export invoices

•  Deemed exports

But for the time being, it does not apply to B2C transactions (business-to-consumer). However, on September 9, 2024, the GST Council recommended implementing e-invoicing for B2C transactions in a phased manner.

Who Is Exempt from E-Invoicing Under GST?

E-invoicing will apply to the widest section of businesses, yet some entities would be exempt. These include:

•  Businesses whose turnover is below ₹5 crores

•  SEZ units (Special Economic Zones)

•  Banks, financial institutions, and NBFCs

•  Insurance companies

• Transporting agencies of goods

Key Benefits of E-Invoicing for Businesses

Earlier before the arrival of e-invoicing, companies faced problems like mismatches of data, delayed GST reconciliation, and manual invoicing, which became cumbersome. Now, with the use of e-invoicing, companies can

• Automate generation of invoices

• Eliminate human errors

• Validate GST data in real time

This switch to digital invoices has reduced compliance burdens and has been offering companies more fluid communication with the authorities.

Step-by-Step Guide to Creating an E-Invoice

Creating an e-invoice is a very simple process. Here is a step-by-step procedure.

1. Preparation of the Invoice: You can create the invoice on any available software or online billing software in a prescribed format.

2. Login to GST Portal: Log onto e-invoice portal with gstlogin

3. Upload Invoice Data: Upload the invoice data to the IRP portal.

4. IRN Generation: IRP will issue the Invoice Reference Number (IRN) and a QR code for your invoice.

5. Downloading the E-Invoice: Your final e-invoice from the IRP is ready to download.

Hisabkitab makes this process simpler by acting as an all-in-one business management tool to help businesses seamlessly manage e-invoicing. Hisabkitab enables easy customization of invoices; this involves various compliance-related work that automates with very fewer chances of errors due to real-time validation.

Time Limitations for Issuing E-Invoices

E-invoices are to be issued at the time of supplying goods or services. There are no dates, but it should be as early as possible so that such a delay in GST filing does not take place. On exports, before dispatching the goods, an e-invoice needs to be generated.

Advantages of E-Invoicing

Many advantages go along with the implementation of e-invoicing:

• More Accuracy: The GST return will auto-populate, from which error decreases.

• Time-saving: Provides some relief from manual data entry and reconciliation.

• Increased Compliance: Ensures real-time validation of invoices.

• Transparency: Streamlines audits more easily and reduces fraud.

• Less Duplicate: Helps reduce invoice duplication across different systems.

By using tools like hisabkitab, companies can reduce the hassle of their account or invoice generation process and enjoy hassle-free GST filing processes too.

Structure of An E-invoice : Mandatory Fields

An e-invoice must contain specific key details as follows:

• Supplier GSTIN

• Buyer GSTIN

• Invoice number and date

• Description of goods or services

• Quantity and value

• Taxable amount, CGST, SGST, IGST

• Invoice Reference Number (IRN)

• QR code

Ensure all the required fields on the IRP are correctly completed to facilitate easier processing and avert rejections.

Conclusion

E-invoicing has totally shifted the game in terms of how business people handle their invoicing; hence, it has made processes way more transparent, correct, and smooth. Whether some would consider themselves as small-time businessmen or large businesses, GST compliance can become easier with the right tools and knowledge.

To make e-invoicing and GST compliance hassle-free, explore how hisabkitab can help you automate your invoicing and manage your financial operations with ease.