E-Invoicing System: A Major Tax Reform under GST

E-invoicing is an innovative system implemented by many countries across the globe to standardize the communication of data. More than 100 countries have already implemented an e-invoicing system. In India, the e-invoicing system got implemented on 1st October 2020. The E-invoicing system is regarded as a major tax reform under GST because it will standardize the format of e-invoicing.

According to the recent mandate, all the taxpayers whose aggregate turnover is more than INR 20 crore for any financial year have to generate e-invoices compulsorily for all B2B and export supplies from April 1, 2022.

What are the Benefits of E-invoicing under GST?

Benefits of the e-invoicing under GST:

1. Promotes interoperability
2. Fewer data errors
3. Real-time tracking of invoices
4. Automated GST returns filing process and even e-way bill.

E-invoicing system is not only beneficial for taxpayers but will also help the government in plugging the tax leakages and will also be environment friendly as it will have less carbon footprint.

Steps to Generate an E-invoice under GST

To generate an e-invoice, you need to follow the below-mentioned steps:

Step 1: Create a JSON file for all B2B and export supplies using accounting or billing software according to the SCHEMA (GST INV-01) prescribed for e-invoicing.

Step 2: Generate Invoice Reference Number (IRN) using a standard hash-generation algorithm.

Step 3: The IRP will authenticate and validate the generated hash/IRN attached with JSON against the central repository of GST for any duplication.

Step 4: Upon successful validation, the invoice will be digitally signed by the IRP and a QR code will be added to the JSON file.

Step 5: On the generation of IRN you can download the e-invoices from the IRP.

List of IRP or Website for E-invoicing Generation

There are 10 different IRPs or websites for generating e-invoices and they are:

1. einvoice1.gst.gov.in
2. einvoice2.gst.gov.in
3. einvoice3.gst.gov.in
4. einvoice4.gst.gov.in
5. einvoice5.gst.gov.in
6. einvoice6.gst.gov.in
7. einvoice7.gst.gov.in
8. einvoice8.gst.gov.in
9. einvoice9.gst.gov.in
10. einvoice10.gst.gov.in

Note: As of now only the first IRP is active.

Conclusion

E-invoicing is considered a major tax reform under GST as it will promote interoperability, enhances transparency, and reduces human intervention in the invoicing process of business.

All you need to do is analyze your aggregate turnover to know whether you need to comply with e-invoicing provisions and select a GST Suvidha Provider (GSP) to meet all the e-invoicing requirements. GSTrobo is one such GSP that provides e-invoicing software that flawlessly integrates with all the leading ERPs such as SAP, Oracle, Microsoft Navision, etc.