GST e-invoice System – FAQs

GST e-invoice/IRN System
Frequently Asked Questions

A. E-invoice – Basics:

1. What is e-invoicing?

As per Rule 48(4) of CGST Rules, notified class of registered persons have to prepare invoice by uploading specified particulars of invoice (in FORM GST INV-01) on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN).

After following above ‘e-invoicing’ process, the invoice copy containing inter alia, the IRN (with QR Code) issued by the notified supplier to buyer is commonly referred to as ‘e-invoice’ in GST.

Because of the standard e-invoice schema (INV-01), ‘e-invoicing’ facilitates exchange of the invoice document (structured invoice data) between a supplier and a buyer in an integrated electronic format.

Please note that ‘e-invoice’ in ‘e-invoicing’ doesn’t mean generation of invoice by a Government portal.

2. How is ‘e-invoicing’ different from present system?

There is no much difference indeed.

Registered persons will continue to create their GST invoices on their own Accounting/Billing/ERP Systems. These invoices will now be reported to ‘Invoice Registration Portal (IRP)’. On reporting, IRP returns the e-invoice with a unique ‘Invoice Reference Number (IRN)’ after digitally signing the e-invoice and adding a QR Code. Then, the invoice can be issued to the receiver (along with QR Code).

A GST invoice will be valid only with a valid IRN.

For more detailed process, please go through ‘e-invoice – Detailed Overview’

3. For which businesses, e-invoicing is mandatory?

Presently, it is mandated for registered persons whose aggregate turnover (based on PAN) in a financial year is more than Rs. 500 Crores.

4. From which date, e-invoicing is mandatory for the notified classes of taxpayers?

As per latest notification, e-invoicing will be mandatory w.e.f. 1st October, 2020, for notified classes of registered persons (those having aggregate annual turnover at PAN level more than Rs. 500 Crores).

5. What are the legal provisions governing e-invoice?

Below notifications were issued on e-invoice:

6. What are the advantages of e-invoice for businesses?

e-invoice has many advantages for businesses such as Auto-reporting of invoices into GST return, auto-generation of e-way bill (where required).

e-invoicing will also facilitate standardisation and inter-operability leading to reduction of disputes among transacting parties, improve payment cycles, reduction of processing costs and thereby greatly improving overall business efficiency.

7. What businesses need to do, to be e-invoice ready?

Businesses will continue to issue invoices as they are doing now. Necessary changes on account of e-invoicing requirement (i.e. to enable reporting of invoices to IRP and obtain IRN), will be made by ERP/Accounting and Billing Software providers in their respective software. They need to get the updated version having this facility.

8. Is an invoice/CDN/DBN (required to be reported to IRP by notified person), valid without IRN?

As per Rule 48(4), notified person has to prepare invoice by uploading specified particulars in FORM GST INV-01 on Invoice Registration Portal and after obtaining Invoice Reference Number (IRN).

As per Rule 48(5), any invoice issued by a notified person in any manner other than the manner specified in Rule 48(4), the same shall not be treated as an invoice.

So, the document issued by notified person becomes legally valid only with an IRN.