E – Invoicing has been made mandatory for the taxpayers, with turnover higher than INR 50 crores by the Central Board of Direct Taxes, to be in effect from 1st April 2021. This step has been initiated to evade GST tax, for which a committee was set up in May 2019 to discuss its viability and its impact globally.

As per the latest Notification No. 05/2021 dated 08th Mar 2021 the original turnover limit of INR 100 crore has been reduced to INR 50 crores to encompass more and more taxpayers in the taxable limits. Due to the slashed limits many concerns will have to get their systems integrated with the Government’s Invoice Generation portal for a smooth functioning of Invoice Reference No (IRN) for each B2B invoice, which has to be in parity with the accounting software to be in sync with the e-invoicing scheme. Let us discuss the effects of generating e-invoice to the businesses and their new compliances.

  • Businesses will have to maintain a complete record of the customer information so as to act in accordance with the additional information on the invoices like the details of the bank, payee etc.
  • Clear identification of transactions to which e-invoicing is applicable and setting them apart for appropriate compliance.
  • Establishments have to make necessary changes in the GST return, considering that the B2C supplies are manually updated and B2B supplies are auto-populated in the returns.
  • It is a challenge to make customers wait to get the e-invoice generated because continuous generating and capturing of IRN’s is a hurdle. Remedy for such concerns is that the business must use GSP services for flawless working.
  • Organisations have to be clear about working with e-invoicing via API integration and offline utilities like GePP or integrated services like GSP Suvidha Provider.

Now, in the condition when no e-invoice is generated then the customer attracts penal provision of INR 10,000 per invoice and any incorrect invoice may attract a penalty of INR 25,000 per invoice. Further the assesse will not get his GST return auto populated and the customers of the assesse might not be able to claim a validated ITC. The customers may also refuse to accept any invoice that does not comply with e-invoicing provisions.

All about e-invoicing API access mechanism:

  • The taxpayer can get a username generated under his username and password and can access API through client ID.
  • If the taxpayer has an access to the e-way bills API, then he can use the same credentials to access e-invoicing system.
  • With the help of GSP’s the taxpayer can generate his username and password and get linked with GSPs to access API by using the client ID and the Client Secret of the GSPs.
  • With the help of ERPs the taxpayer can get his user name and password and get connected with the ERPs to access API using the client ID and Client Secret of the ERPs.

A few prevalent modes available for Invoice Reference Number (IRN) generation are:

  • Web Based: Details of the invoice of the taxpayer can be filled in on the websites of IRN and IRP.
  • SMS Based: A specific format of invoice details are send to IRP through SMS for further processing.
  • API Based: With the help of this system the taxpayers accounting system can communicate with IRP and seek IRN, either singly or in bulk as per the requirements.
  • Mobile App Based: A dedicated mobile app is made available to the taxpayers for compliance of e-invoicing by the GSTIN.
  • GSP Based: Services of GSP can be availed by the taxpayers for IRN generation
  • Offline Tool Based: Updation of invoice details can be done on the IRP portal offline as well