E-invoicing mandate extended to Rs. 20 Cr. companies! The government has made a new announcement regarding the e-invoicing mandate. The e-invoicing threshold has been reduced further from Rs. 50 Cr.to Rs. 20 Cr turnover.
As per the latest GST Notification 1/2022 released on 24th February 2022, e-invoicing has been made mandatory for all the B2B transactions from 1st April 2022 for all the entities with an aggregate annual turnover of Rs. 20 Cr. or more in any financial year from 2017-18 onwards. The government has brought about this reform to promote digitization, bring transparency, reduce tax frauds and streamline the overall compliance process by automating it.
You can read all about E-Invoicing under GST here: All You need to Know about E-Invoicing under GST
We went live with IRIS Onyx and all our invoices got posted successfully. I would like to thank the entire IRIS GST team for their efforts in making this possible. As we all know that it was not an easy task and we had our share of challenges but to be able to go live on time with proper testing is a great feeling and I am thankful to the team for pulling through and delivering!
– VANDIT SHAH, GIA INDIA
Process to Generate an E-Invoice
The process of E-invoicing can be understood in the following 4 steps:
- Data upload to NIC: NIC (National Informatics Center) is the government’s portal for generating e-invoices. One can upload the data either on the portal itself or via their ERPs or through GSPs (GST Suvidha Providers). GSPs offer convenient bulk data upload options, your data is always available and the GSPs analyze the data, provide reconciliation and furnish reports that can help businesses to file their GSTR 1 return.
- IRN Generation: Once data is submitted to the e-invoice portal, an Invoice Registration Number (IRN) is generated by the portal. In case E-Way Bill is also required, then along with invoice details you can send the transport details so that along with IRN you can receive the E-way bill number. This will reduce your compliance burden of sending data two times i.e. one for IRN generation and the second for E-way bill generation.
In case you don’t have transport details at the time of E-invoice generation then at a later stage based on the IRN number and by sending additional transporter details you can generate an E-way bill number.
- QR Code Generation: When an IRN is generated, simultaneously a B2B QR Code is also generated and sent back to the sender in real-time. The QR Code carries all the important information about the invoice like supplier GSTIN, receiver GSTIN, document type, Invoice number and date, invoice value etc.
- Invoice Printing: The last step to e-invoice generation is invoice Printing. The government mandates that all e-invoices should carry the QR Code on the physical invoice. The mandate went Live for the 500 Cr+ turnover companies from 1st October 2020. Since then the government has been lowering the turnover criteria for e-invoicing in a phased manner. Hence, the e-invoicing system is now quite mature with few onboarding issues.
To read the process in details: Process to Generate an E-Invoice
E-invoicing and E-way Bill
The Government has streamlined the generation of E-way Bill with E-invoicing. An IRP can be used to generate not only IRN but also E-way bills, for the documents which qualify. Thus, depending on the data sent, the IRP system will return an IRN or E-way Bill Number or both.
E-invoicing for SEZ
In the new notification, there is a special mention regarding e-invoicing and SEZ. To mention the same here, there is an exclusion of SEZ units (but not SEZ developers) and certain classes of taxpayers such as banks and financial institutions, GTA, etc. shall continue.
The latest GST notification does not apply to B2C transactions – only registered persons having turnover in excess of ₹500 crores are required to generate dynamic QR code.
What does this change mean to small and medium-sized businesses?
- The government has further lowered the e-invoicing radar from Rs. 50 Cr. to Rs. 20 Cr. companies and soon it is going to be applicable for all small businesses in the near future.
- There is a possibility that the physical invoice copy will be done away with. It is not only a technology change but also a process change.
- The invoice data needs to be sent to the Government portal -Invoice Registration Portal-IRP, obtain Invoice Registration Number (IRN) and store back in your system. The invoice generated needs to have a signed QR Code on it.
- Since GSTR 2A is no longer the basis for ITC Claim, it is critical for businesses to ensure that their vendors are e-invoicing compliant too so that all the e-invoices reflect in their GSTR 2B and thus they can claim ITC. Any non-compliance at the vendor’s end can deeply affect ITC.
- It is important for businesses to keep a check on all their vendors i.e. whether or not they are falling under the e-invoicing criteria. If they are falling under e-invoicing, they must provide you with a valid e-invoice copy that has a proper QR Code generated by NIC with IRN. Because if they don’t comply with e-invoicing, it means the invoice provided by them will be treated as an invalid document and this will directly affect your ITC.
Thus, it is important for businesses that they adapt to the new change and gear up to implement the e-invoicing mandate into their systems as soon as possible. If you need any help with the same, do not hesitate to reach out to us at firstname.lastname@example.org.
What companies should look for in a service provider?
- ASP + GSP: The combination of ASP+GSP is a powerful one and proves to be highly beneficial for the taxpayers. The filing process becomes smooth, cost-effective and time-saving. If there is any change in the GST Network, it immediately gets communicated to the user because an authorized GSP+ASP is amongst the first ones to know the details of the change. To know more, read here: ASP + GSP GST Solution
- Cloud-based software solutions: The software needs to be cloud-based for ease of operation and data security. Cloud computing allows accessing data from anywhere easily. Sharing files, folders, documents with your team is easier than ever. With cloud software applications, inter-departmental working can also be carried out smoothly in large and mid-size organisations.
- Automated and Integrated Software Solutions: Choosing a service provider that offers solutions that are completely automated and can integrate smoothly with your ERPs/systems smoothly is key. Ensure that the service provider has multiple integration options to ease your process and save time.
- Strong Support Team: There will be technical glitches or changes from the government’s end coming in every now and then. Your service provider needs to have a strong support team to help you implement the new changes and guide you to resolve the glitches effectively and timely.
If you are looking for Automated, Integrated and Seamless e-invoicing Software, contact us today! Our e-invoicing solution is a complete tool for a seamless e-invoicing process.
IRIS Onyx has proven to be a blessing for all our clients who managed to carry out the entire process of IRN generation smoothly. Our team has been dedicated to helping clients with all their queries and has been conducting free webinars to spread awareness about the latest changes and extend support in the implementation of the e-invoice mandate.