E- Invoicing under GST – Are you Ready?
The concept of e-Invoicing is going to be introduced under GST. With this, every bill will be driven by the system and there will not be any system of back dated invoicing, manipulations and fabrications.
If it happens so, probably, GSTR-1 filing concept can also be replaced in years to come. Without registration of e-invoice, it will not be valid “tax invoice” under the GST Law. Now, every invoice will be registered immediately on real-time basis. New e-Invoicing system is aimed to control the mass level operation of fake invoices racket which is resulting in bogus claim of input tax credit.
To implement the new system, it will be necessary to effect necessary changes in the GST Act as the present provisions is not taking care of proposed e-invoice regime.
As of now, GST portal or Invoice Registration Portal (IRP) will not be providing the facility to generate invoices through it. IRP is only to report the invoice data which has to be uploaded from the Accounting department of the assessee.
The system will be further followed by backward & forwards integration of other online system which is set to ensure availability of ITC and will result in automated procedure. If properly implemented, the system has a capability of reducing the monthly returns compliances of the taxpayers in years to come.
The invoice schema will be required to be maintained. All invoices generated using this schema by the taxpayer will standardize the e-Invoice form across the business houses as same e-invoice schema will be used by all kinds of businesses to maintain uniformity. The schema have mandatory and non-mandatory fields. Scheme is designed in an elaborated way so as to take care of almost all business needs of the economy. The registration of an e-invoice will only be possible once all he mandatory fields uploaded into the Invoice registration Portal (IRP). Such e-invoice will be uploaded into the GST ANX-1 only after it has been validated and registered by the invoice registration system. After it has been validated and after it is loaded in the ANX-1, it will be visible to the counter party recipient in his ANX – 2. After this, it will be available for the entire financial year and can be retrieved whenever needed. E-invoice schema as well as template thereto as approved by the GST Council is now available in the GSTN website for the access of the taxpayers.
As of now, the invoice templates keep on varying and have multiple & various other details like logo, company’s vision action, etc. With new schema, there will not be any provision to incorporate all such details. The concept of uniformity will supersede everything in this new e-invoice schema. It may happen that the software company can provide in the billing or accounting software so as to print it but such other information will not be sent to IRP I. E-invoice system has a special provisions to take care of the RCM (Reverse Charge Mechanism) reporting as it will be by way of a s Self-Invoicing.
IRP System after registering the invoices will share back digitally signed e-invoice for record of supplier. It will also be sent to the email address of recipient provided in the e-invoice. The same can be downloaded and/or saved on handheld devices. To take care of the practical issue arising out of the cancellation of the transactions, it is provided that the e-invoice can be cancelled subject to the conditions that such cancellation has to be reported to IRN within 24 hours. It must be note noted any cancellation after 24 Hours will not be possible on IRN. Only option in such case could be either to issue the debit note or credit note then. There is an option which do provides for Amendments in the e-invoice on the GST portal. All such changes and amendments to the e-invoice can be done through GST portal only. Not only domestic, even exports would also be subject to e-invoicing & will only be a valid document for claiming export incentives envisaged. The present e-invoicing system will be in addition to e-way bill system and resultantly, e-way bill for transportation will continue to be mandatory as per earlier system.
The system is likely to be made operational in a phased wise manner. To begin it is proposed that the new e-invoice system will be applicable to only specified tax payers with Aggregate Turnover exceeding Rs. 100 Crores in the preceding financial year. After its successful implantation, the system will be made applicable for all categories of the tax payers.
One of the most important part is in the e-invoice is with regards to a dynamic QR code. It will find a worthy presence in the new e-invoice system. An option for linking multiple invoices in case of debit note or credit note has also been incorporated in the new e-invoices system.