E-Invoicing in GST – Applicability and Steps to Generate E-Invoice

An invoice is a crucial part of business accounting as it comes with various uses. It signifies any customer or client’s onus to make payments for the goods or services that you delivered to them. Plus, an invoice also serves the purpose of a payment agreement. 

If your business enterprise is registered under the GST system, you’ll be required to produce e-invoices for all your Business-to-Business (B2B) transactions. If you think about whether you need an e-invoice in GST, this article is for you. 

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Here, you’ll learn what e-invoicing in GST means, what are its applicability, and how to generate an e-invoice. So, let’s start. 

E-Invoicing In GST: What Does It Mean? 

e-Invoice also known as ‘Electronic invoicing’ is a system-generated invoice, wherein all B2B invoices are uploaded and authenticated by the GST portal. Once authenticated, a unique IRN along is generated for each invoice by the IRP. Additionally, each invoice is digitally signed and a QR code added – the entire process is called e-invoicing under GST.

E-Invoicing In GST: All About Its Applicability 

Based on the overall turnover of Indian taxpayers, we have prepared this table to help you better understand the applicability of e-invoices in GST. 

PhaseTaxpayers With an Aggregate Turnover of OverApplicable Date
Phase 1₹ 500 crore1st October 2020
Phase 2₹ 100 crore1st January 2021
Phase 3₹ 50 crore1st April 2021
Phase 4₹ 20 crore1st April 2022
Phase 5₹ 10 crore1st October 2022

You must also note these pointers: 

  • Taxpayers must adhere to the e-invoicing system under GST, provided their aggregate turnover surpasses the mentioned limit in any financial year commencing from 2017-18 to 2021-22. 
  • Here, the aggregate turnover refers to the turnover acquired for every GSTIN under a single PAN across the nation. 
  • During the last financial year, if your business turnover didn’t surpass the threshold limit, but has surged to surpass the limit in the current fiscal year, then e-invoicing will become applicable from the subsequent financial year. 
  • No matter the turnover, e-invoicing under GST doesn’t apply to several classes of registered individuals as outlined in the CBIC Notification 13/2020, comprising:
    • Goods transport company or agency
    • An SEZ (Special Economic Zone) unit 
    • Registered people providing services through access to the exhibition or portrayal of cinematographic films in movie theaters or cinemas
    • NBFC, banking company, or an insurer
    • Registered people providing passenger transportation service
    • A local authority or a government department

Step-By-Step Guide on How to Generate E-Invoice In GST

Step 1: Producing E-Invoice JSON

The initial step is to create an e-invoice JSON file via accounting software. l. You can generate it either by using the offline convenience given by the government or by using e invoice software like TallyPrime, which works better than any ERP software for this purpose. 

Step 2: JSON Upload

After you generate the e-invoice JSON file for all your B2B invoices, you need to upload it to the IRP system. If your software uses GSP for seamless integration with IRP, the JSON file will be uploaded automatically. It means your software will transfer the requisite details to the IRP portal directly. 

Step 3: E-Invoice JSON Verification 

Now, your e-invoice JSON file will be assessed, verified, and validated by the IRP system. They will check the central registration of GST to ensure no duplication. 

Step 4: IRN (Invoice Reference Number) Generation

Once the e-invoice JSON validation is completed successfully, the IRP system will start working on generating the IRN. IRN produced will demonstrate a unique number of every invoice for that whole financial year. Moreover, the IRP system will update the e-invoice JSON along with a QR code and a digital signature. 

Step 5: Getting E-Invoice JSON That Has Been authenticated

Now, the supplier will receive the e-invoice JSON file with a QR code. The supplier adds the QR code and prints the invoice. There is fully connected business software that automatically sends the invoice details for authentication and instantly generates the e-invoices with a QR code.  

Step 6: Sending the Data to GST System & E-Way Bill System

In this step, the uploaded invoice JSON data will be shared with the GST and e-way bill system. This will be necessary for the auto-population of GST returns and the preparation of e-way bills. 

Final Words  With this comprehensive guide, you must have got a clear idea of the applicability of e-invoicing in GST and the steps to generate it. To make e-invoicing easy and seamless, you must leverage the power of a state-of-the-art e-invoicing software solution for your business. So, get started today!