The term newly introduced by the Indian Government is “E-Invoicing” which means Electronic billing. It is mainly introduced to control GST Tax evasion. The concept of e-invoicing is approved by the GST council.
E-Invoicing is optional from 1st Jan 2020 and it is mandatory from 01st April 2020 in India for businesses whose aggregate turnover exceed Rs.100 crores.
A Business transaction is made between Business to Business(B2B) and the respective invoices are uploaded electronically, authenticated by the designated portal.
E-Invoicing is not meant for creating a sale invoice. It is a submission of an already generated standard invoice on a common portal.
A B2B transaction is created between the seller and the buyer without creating any proof of evidence to the Government. Through e-invoicing, pre-validation will be done and a unique number called Invoice Reference Number (IRN) will be generated. Once an IRN is issued, it will update the Annexure – 1 of the Supplier and if e-waybill is required to be issued, Part-A of the same will be updated. It will also update the Annexure-2 of the recipient.
The e-invoice update into the new GST returns will save a lot of time, avoid data error and reconciliation issues.
The seller has to upload the invoices on to the portal. After uploading, the system will generate the IRN in the physical copy of the invoice issued to the recipient. Also, an automated email is designed for digitally signed e-invoice with QR code to the supplier as well as the recipient.
Invoices, Credit note and Debit notes are the supported documents used in e-invoicing.
E-Invoicing can be generated via IRP (Invoice Registration Portal) through different modes like Web based, API based, SMS based, Mobile app based, offline tool based and GSP based.