1. What is ‘e-invoicing’?

Ans: As per Rule 48(4) of CGST Rules, notified class of registered persons has to prepare invoices by uploading specified particulars of invoice (in FORM GST INV-01) on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN). After following the above ‘e-invoicing’ process, the invoice copy containing inter alia, the IRN (with QR Code) issued by the notified supplier to the buyer is commonly referred to as ‘e-invoice’ in GST. 

Please note that ‘e-invoice’ in ‘e-invoicing’ doesn’t mean a generation of invoices by a Government portal.

2. Difference between the present system and ‘e-invoicing’ 

Ans: There is no much difference indeed. Registered persons will continue to create their GST invoices on their own Accounting/Billing/ERP Systems. These invoices will now be reported to ‘Invoice Registration Portal (IRP)’. On reporting, IRP returns the e-invoice with a unique ‘Invoice Reference Number (IRN)’ after digitally signing the e-invoice and adding a QR Code. Then, the invoice can be issued to the receiver (along with QR Code). A GST invoice will be valid only with a valid IRN.

3. For which businesses, e-invoicing is mandatory?

Ans: Presently, it is mandated for registered persons whose aggregate turnover (based on PAN) in a financial year is more than Rs. 500 Crores.

4. From which date, e-invoicing is mandatory for the notified classes of taxpayers?

Ans: As per the latest notification, e-invoicing will be mandatory w.e.f. 1st October 2020, for notified classes of registered persons (those having aggregate annual turnover at PAN level more than Rs. 500 Crores in any preceding  FY from 2017-18 onwards).

5. What businesses need to do, to be e-invoice ready?

Ans: Businesses will continue to issue invoices as they are doing now. Necessary changes on account of e-invoicing requirements (i.e. to enable reporting of invoices to IRP and obtain IRN), will be made by ERP/Accounting and Billing Software providers in their respective software. They need to get the updated version having this facility. 

6. Is an invoice/CDN/DBN (required to be reported to IRP by notified person), valid without IRN?

Ans: As per Rule 48(4), notified person has to prepare invoice by uploading specified particulars in FORM GST INV-01 on Invoice Registration Portal and after obtaining Invoice Reference Number (IRN). As per Rule 48(5), any invoice issued by a notified person in any manner other than the manner specified in Rule 48(4), the same shall not be treated as an invoice. So, the document issued by notified person becomes legally valid only with an IRN. 

7. What documents and supplies are presently covered under e-invoicing?

Ans:  Documents : -(i) Invoices ii. Credit Notes iii. Debit Notes,

          Supplies: Supplies to registered persons (B2B), Supplies to SEZs (with/without payment), Exports (with/without payment), Deemed Exports, by notified class of taxpayers is currently covered under e-invoice.

8. What is the applicability of e-invoice for import transactions?

Ans: e-invoicing is not applicable for import Bills of Entry.

9. Which entities/sectors are exempt from the e-invoicing mandate?

Ans:  a. Special Economic Zone Units.

          b. insurer or a banking company or a financial institution, including a non-banking financial company.

          c. goods transport agency supplying services in relation to transportation of goods by road in a goods carriage

          d. Suppliers of passenger transportation service

          e. Suppliers of services by way of admission to exhibition of cinematograph films in multiplex screens.

10. Whether e-invoicing is applicable for supplies involving Reverse Charge?

Ans: If the invoice issued by notified person is in respect of supplies made by him but attracting reverse charge under Section 9(3), e-invoicing is applicable.

For example, a taxpayer (say Goods Transport Agency or a Firm of Advocates having aggregate turnover in a FY is more than Rs. 500 Cr.) is supplying services to a company (who will be discharging tax liability as a recipient under RCM), such invoices have to be reported by the notified person to IRP. On the other hand, where supplies are received by notified person from (i) an unregistered person (attracting reverse charge under Section 9(4)) or (ii) through import of services, e-invoicing doesn’t arise / not applicable.