Falling under the E-invoice Criteria? 4 tactics to become a pro!

Falling Under The E-invoice Criteria? Here Are Mistakes To Avoid

The advent of e-invoicing was no less than a revolution for the Indian business world. The e-invoicing mandate was first rolled out for companies with a turnover of over Rs. 500 cr. in October 2020, later it was made applicable to companies with a turnover of Rs. 100 cr. and above from 1st January 2021. The latest to fall under the e-invoice criteria are companies with a turnover of Rs. 50 cr. or more from April 2021 onwards and the threshold is expected to reduce even further.

Updated on 24th Feb 2022: As per CGST Notification 01/2022 released on 24th Feb 2022, GST e-invoice has been made mandatory for entities with turnover of Rs. 20 Cr and above.

Updated on 2nd Aug 2022 GST Notification 17/2022 dated 01-08-2022 mandates e-invoicing for taxpayers having AATO above Rs. 10 crores in any financial year since FY 2017-18 w.e.f 1st October, 2022.

So while the companies have already started complying with the mandate, there are certain areas that require special attention from taxpayers. If you are also juggling many things and keep on getting stuck while preparing your e-invoices, here are 4 best practices to have a smooth ride on your e-invoicing journey.

1. Stay updated with every recent change in the e-invoice criteria

Needless to say, if you are falling under the e-invoice mandate, you need to constantly update yourself to learn everything about e-invoicing, the latest updates, notifications and changes in order to avoid backsliding or making mistakes in the process. E-invoicing itself has evolved a lot since it first rolled out. Now, e-invoicing and e-way bill have paired up, there is e-invoicing and RCM, and there are a separate set of guidelines for e-invoicing for e-commerce vendors and even for e-invoicing and SEZ. Thus, you as a business owner, need to be fully aware of the latest developments and follow the prescribed guidelines for your business.

2. Your B2B invoice has got a new face

The most important change since the introduction of e-invoicing is how your B2B e-invoice looks. There is a completely new set of rules that need to be followed for B2B e-invoice QR Code generation, invoice printing, taking care of HSN, PoB etc. There are certain guidelines provided by the Government for preparing e-invoices and all the aspects it must cover. The components for a B2B invoice are just non-negotiable and you should adhere to the same. And if you default in adding those specific details or you send your invoices in the wrong format to the IRP (Invoice Registration Portal) then your IRN will not get generated. Thus, you must follow the right steps for e-invoice generation in order to get the IRN successfully for all your B2B invoices.

3. Sending B2C invoices to the IRP? – A big No!

Although the notification on e-invoicing schema has included B2C transactions as Invoice Type, IRN generation is not applicable for B2C. So, all the B2C transactions need not be reported to the government. In fact, taxpayers should not send the B2C invoices to the Government (i.e. IRP). This has been further clarified by NIC that the requests sent with B2C invoices will be rejected by them and if sent multiple times, then the IRN generation can also be blocked.

However, a certain category of taxpayers are required to print self-generated QR codes on B2C transactions. Along with E-Invoicing for B2B and Exports, taxpayers are mandatorily required to print self-generated QR Code on B2C transactions from 1st July 2021 onwards as per GST Notification 06/2021. However, this was further pushed ahead as per GST Notification 28/2021 that said – Penalty payable for noncompliance QR Code on B2C transactions waived further till 30th September 2021, subject to compliance from 1st October 2021.

4. Follow Validation Rules to avoid barring

The process of generating e-invoices is not a smooth ride for many. There have been several roadblocks and hurdles in generating IRN successfully – be it through the portal or via GSPs. The reason can be many, however, one which is under your control is taking care of certain reporting aspects at the business level and at the ERP system level for correct e-invoice generation.

The data to be sent to NIC (Invoice Registration portal) is in a JSON (JavaScript Object Notation) format. Each parameter can have a different type of validation rule. The validations are categorized into 4 major buckets for better understanding. Businesses need to take care of E-invoicing rules for validation in order to avoid errors.