IndiaFilings » Learn » GST E-Invoice Under New GST Return System 2020

GST E-Invoice Under New GST Return System 2020

QR Code for GST Invoices

GST E-Invoice Under New GST Return System 2020

Provisions relating to the  GST invoice are discussed under Rule 46 of Chapter VI of CGST Rules 2017. Every supplier with a GST registration in India needs to issue an invoice in the prescribed format to the buyer when selling goods or services. This law applies to local and offline businesses operating in the nation. The GST E-invoice will become mandatory for specific businesses under the new GST return system from October 2020.

 GST E-Invoice- Provisions 

The GST E-invoice is now mandatory for businesses with an annual turnover of over 10 crores from October 2022. E-invoices must be submitted in the prescribed format to the Invoice Registration Portal. Invoices without an IRP number will be treated as null and void.

Businesses exempted from GST E-Invoice

  • Insurance companies
  • Banks
  • Airlines
  • Armed forces, and
  • Telecom services

The aggregate turnover for businesses includes the total GSTINs turnover under a single PAN number across India.

Benefits of GST E-Invoice for the Government

The Government will introduce mandatory GST e-invoice in phases to drive consistency, machine compatibility and uniformity across the country. This step will subsequently curb tax evasion and data errors in the system. Given below are the top benefits of GST e-invoices for the Government-

  1. Tax authorities can access transactions in real-time.
  2. Manipulation of invoices will be curbed as the invoice will get generated before the transaction is carried out.
  3. Scope of fake GST invoices will reduce. Genuine input tax credit will be determined as per invoice generation through the GST portal. Details of output tax can be matched against input tax credit enabling the system to track fake claims for tax credit.

Advantages of GST E-Invoice for Businesses in India

Given below are the key advantages of the new GST return system to businesses-

  1. Discrepancies and errors in the GST system will automatically decrease.
  2. The creation of an e-invoice on one software can be read by others boosting cross- platform accessibility and reduction in data errors.
  3. Suppliers can track e-invoices in real-time.
  4. Automates the filing process for tax returns.
  5. Accelerates the availability of input tax credit.
  6. Reduces surveys/audits by tax authorities as information can be accessed at transaction levels.

Submission Criteria

The GST e-invoice must be submitted to the Invoice Registration Portal in JSON format. E-signature on the invoice is optional and not mandatory. After the submission of the e-invoice, the IRP will validate the document before issuing a response message for the submission. Given below are the following parameters on which the submitted GST e-invoice will be validated.

  • Mandatory fields must be filled in.
  • Supplier GSTIN (Goods and Services Tax Identification Number) Validity.
  • Buyer GSTIN Validity.
  • Validity of financial year and invoice number.
  • Whether the GST system already has the invoice.

If all of the above parameters are in order, the GST e-invoice will be signed electronically and assigned a unique IRP number.  The supplier and buyer will receive a QR code for confirming authenticity of the said invoice. This serves as proof the e-invoice has been successfully registered in the GST system. The IRP will consequently make the invoice available to both the supplier and buyer in the GST system.

Discrepancies in the validation process will disapprove the e- invoice and the IRP will issue an error message notifying the sender with reason for rejection.

Mandatory fields for GST E-Invoice

 Given below is a summary of the contents of the GST E-invoice-

  • The invoice has 18 sections divided into optional and mandatory fields. (Total number of fields=133)
  • 8 fields are mandatory and 10 are optional out of these 18 sections.
  • 34 fields are mandatory and 46 fields are optional within the 8 mandatory fields.
  • 17 fields are mandatory and 35 fields are optional within the 10 optional fields.

The following are the fields one must mandatorily fill in the e-invoice-

  • Invoice Number
  • Type of Invoice
  • Code of Invoice Type
  • GSTIN of Supplier
  • GSTIN shipping (buyer or person to whom item were delivered)
  • Shipping to the State
  • Type of Supply (e.g. sales return, import, export, job work etc)
  • Date of Invoice
  • Reference for prevailing invoice
  • Reverse Charge
  • GSTIN of Buyer
  • State Code
  • Place
  • Pin code
  • Unique Identification Number
  • Mode of Transaction
  • Description of item
  • Quantity
  • Rate (unit price excluding GST)
  • Assessable Value
  • Rate of GST
  • Value of CGST, IGST and SGST (separately)
  • Total value of invoice

After the completion of the above steps, the e-invoice must be distributed to the buyer by the supplier. No regulation has been set down for this distribution method so the parties can decide on the appropriate mode of distribution themselves. Note that the businesses exempt from GST e-invoicing are not obliged to process and accept e-documents in the JSON format. Here, suppliers can generate paper printed or PDF invoices for the distribution to those businesses. Refer to

Salient Highlights & Developments Of The New GST Return System (2019-2020)

  • In August. 2019, the GSTIN issued a draft template of the GST e-invoice to invite feedback from the industry by the 20th of August, 2019. This was known as e-invoice schema.
  • On the 10th of October,2019 The GST Council approved the template for e-invoice along with its mechanism. It released the final version for the e-invoice template as a major announcement on its portal.
  • As on 20th September, 2019, the 37th GST Council meeting decided that all forms pertaining to the new GST return system will be implemented with effect from April, 2020 to all tax payers.
  • On 13th December, 2019, CBIC issued a notification stating the class of taxpayers that are required to generate the GST e-invoice on the Invoice Registration Portal should have an aggregate annual turnover of more than 100 crores to generate e-invoices from the 1st of April, 2020. The fields in this e-invoice has been notified in the CGST rules. Refer to this link for further information.

Update dated 14th March 2020 (subject to further CBIC Notification)

  • The new GST Return system will be incorporated w.e.f. 20th October, 2020.
  • The current GST returns filing systems (GSTR1, GSTR 2A and 3B) will be in force till September, 2020.

Latest Update dated 1st August 2022 (subject to further CBIC Notification)