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GST eInvoicing Registration

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GST eInvoicing Registration in India

GST eInvoice, or Electronic Invoicing, is a system introduced by the Indian government to standardize the process of invoicing for businesses registered under the Goods and Services Tax (GST). The system mandates that all B2B invoices are electronically authenticated by the Goods and Services Tax Network (GSTN) and assigned a unique Invoice Reference Number (IRN). This ensures the invoices are valid and can be used for GST returns, enhancing transparency and compliance across the board.

Key Features:

  • Standardization: The system enforces a uniform invoicing format across all industries, making it easier for businesses to comply with GST requirements.
  • Real-time Reporting: Invoices are reported in real-time to the GST portal, ensuring that tax authorities have up-to-date information
  • Automation: The process reduces manual entry and errors by automating the generation and submission of invoices.
  • Compliance: It ensures that businesses adhere to GST laws and reduces the risk of non-compliance.

Eligibility Criteria for GST eInvoice Implementation

GST eInvoicing is being implemented in a phased manner by the Indian government. The eligibility criteria for businesses required to implement GST eInvoicing depend on their annual turnover. Here are the detailed criteria:

Turnover Threshold
Businesses with Annual Aggregate Turnover of Rs. 500 Crores and Above:

Initially, eInvoicing was made mandatory from October 1, 2020, for businesses with an annual aggregate turnover exceeding Rs. 500 crores in any preceding financial year from 2017-18 onwards.

Businesses with an Annual Aggregate Turnover of Rs. 100 Crores and Above:

From January 1, 2021, the threshold was reduced, making eInvoicing mandatory for businesses with an annual aggregate turnover exceeding Rs. 100 crores in any preceding financial year from 2017-18 onwards

Businesses with an Annual Aggregate Turnover of Rs. 50 Crores and Above:

Further, from April 1, 2021, the threshold was lowered to include businesses with an annual aggregate turnover exceeding Rs. 50 crores in any preceding financial year from 2017-18 onwards.

Businesses with Annual Aggregate Turnover of Rs. 20 Crores and Above:

From April 1, 2022, eInvoicing became mandatory for businesses with an annual aggregate turnover exceeding Rs. 20 crores in any preceding financial year from 2017-18 onwards.

Businesses with Annual Aggregate Turnover of Rs. 10 Crores and Above:

As of October 1, 2022, the requirement was extended to businesses with an annual aggregate turnover exceeding Rs. 10 crores in any preceding financial year from 2017-18 onwards.

GST eInvoice Structure

The structure of a GST eInvoice is designed to ensure standardization, accuracy, and compliance with GST regulations. It includes various mandatory fields and components that must be filled out correctly to generate a valid eInvoice. Here is a detailed breakdown of the GST eInvoice structure:

Basic Information
  • Invoice Number: A unique sequential number for each invoice within a financial year.
  • Invoice Date: The date when the invoice is issued.
Supplier Information
  • Supplier's GSTIN: The GST Identification Number of the supplier
  • Supplier's Legal Name: The registered name of the supplier.
  • Supplier's Address: The complete address of the supplier including city, state, and PIN code
  • Supplier's Place of Supply: The location (state) where the goods/services are supplied from.
Recipient Information
  • Recipient's GSTIN: The GST Identification Number of the recipient.
  • Recipient's Legal Name: The registered name of the recipient.
  • Recipient's Address: The complete address of the recipient including city, state, and PIN code.
  • Place of Supply: The location (state) where the goods/services are supplied to.
Item Details
  • Item Description: Detailed description of the goods/services supplied.
  • HSN Code: The Harmonized System of Nomenclature code for goods or Service Accounting Code (SAC) for services.
  • Quantity: Quantity of goods supplied or services rendered.
  • Unit of Measure: The unit in which the quantity is measured (e.g., pieces, kilograms, liters, hours).
  • Unit Price: Price per unit of goods/services
  • Total Item Value: Total value of the item (Quantity × Unit Price).
Tax Details
  • Taxable Value: The value on which GST is calculated (total item value minus any discounts).
  • Rate of Tax: The applicable rate of GST (CGST, SGST/UTGST, IGST).
  • Tax Amount: The amount of GST charged (CGST amount, SGST/UTGST amount, IGST amount).
  • Total Tax Amount: The sum of CGST, SGST/UTGST, and IGST amounts.
Invoice Total
  • Total Invoice Value: Total value of the invoice including all taxes and charges.
  • Amount in Words: The total invoice value is written in words for clarity.
Invoice Reference Number (IRN) and QR Code
  • IRN: A unique Invoice Reference Number generated by the GSTN portal after successful validation.
  • QR Code: A QR code containing key invoice details, including the IRN, which can be scanned for verification.
Additional Fields
  • Terms of Supply: Payment terms, delivery terms, and other conditions of supply.
  • E-Way Bill Number: If applicable, the E-Way Bill number for the transportation of goods.
  • Digital Signature: Digital or electronic signature of the supplier.

Advantages of GST eInvoicing

Improved Accuracy:
  • Error Reduction: Minimizes human errors by automating the data entry process.
  • Data Consistency: Ensures consistency between buyer and seller records, reducing mismatches in invoice details.
Enhanced Efficiency:
  • Faster Processing: Speeds up the invoicing process through real-time authentication.
  • Quicker ITC Claims: Facilitates faster claiming of input tax credits (ITC) as the invoices are instantly available in the GST portal.
Reduced Compliance Burden
  • Simplified Filing: Streamlines the process of filing GST returns by auto-populating parts of GSTR-1 and GSTR-2A forms.
  • Regulatory Adherence: Reduces the compliance burden by ensuring that all invoices are generated and reported as per GST regulations.
Increased Transparency:
  • Real-time Tracking: Enables real-time tracking of invoices, improving the overall transparency of business transactions.
  • Fraud Prevention: Reduces the chances of tax evasion and fraudulent invoices, ensuring a fairer business environment.
Cost Savings:
  • Reduced Paperwork: Lowers the cost associated with printing and storing paper invoices.
  • Efficiency Gains: Decreases administrative and operational costs through automation and efficient processing.

Disadvantages of GST eInvoicing

Initial Setup Costs:
  • Technology Investment: Requires significant investment in technology and software to ensure compliance with eInvoicing requirements.
  • Training Needs: Potential need for training employees on how to use the new eInvoicing system effectively.
Technical Challenges:
  • Glitches and Downtime: May experience technical issues and downtime, especially during the initial phases of implementation.
  • Internet Dependency: This relies heavily on a stable internet connection and digital infrastructure, which might be a challenge in remote areas.
Complexity for Small Businesses:
  • Adaptation Challenges: Smaller businesses may struggle to adapt to the new system due to limited resources and technical expertise
  • Administrative Burden: Increased administrative tasks for small enterprises to ensure compliance with eInvoicing norms.
Data Security Concerns:
  • Risk of Data Breaches: Possibility of data breaches and unauthorized access to sensitive business information.
  • Need for Cybersecurity: Necessitates robust cybersecurity measures to protect invoice data from potential cyber threats.
Conclusion

GST eInvoicing is a significant step towards digitizing and streamlining the tax invoicing process in India. By adopting this system, businesses can achieve greater accuracy, efficiency, and compliance in their invoicing practices. However, it is essential to be mindful of the potential challenges, especially for smaller businesses, and take proactive measures to address them. Proper planning, investment in technology, and training can help companies to leverage the benefits of GST eInvoicing while mitigating its disadvantages.

Related Guides

Documents Required For GST eInvoicing

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Features Proprietorship Partnership LLP Company
Definition A sole proprietorship is an unregistered business entity managed by a single individual. A legal contract between multiple parties to jointly manage and run a business operation. A business type that combines aspects of a partnership and the limited liability of a corporation. A registered business where owners and shareholders have limited liability.
Ownership
  • Single individual
  • Min 2 Partners
  • Max 50 Partners
  • Designated Partners: Min 2(No upper limit)
  • Min: 1 shareholder (for a private company), 7 shareholders (for a public company)
  • Max: 200 shareholders (for a private company), no upper limit (for a public company)
For One Person Company
  • Minimum: 1 individual
  • Maximum: 1 individual
Registration Time 7-10 working days
Promoter Liability Unlimited Liability Limited Liability
Documentation
  • Partnership Deed
  • PAN card of the partnership firm
  • LLP Agreement
  • Incorporation Certificate
  • PAN card of the LLP
  • MOA
  • AOA
  • Certificate of incorporation
  • PAN card of the company
Governance No specific governing law Governed by the terms outlined in the partnership deed Governed by the LLP agreement Governed by a formal structure including a Board of Directors
Transferability Business cannot be transferred Ownership transfer requires the consent of all partners as outlined in the partnership deed. Transferable Easily Transferable for public companies. In private companies, there might be some restrictions.
Compliance Requirements
  • Income tax filing if the turnover exceeds Rs. 2.5 lakhs.
  • Must file ITR 5
  • Must file ITR 5
  • File Form 11
  • Form 8
  • MCA filing
  • Auditor's appointment
  • File ITR 6

GST eInvoicing FAQ's

Is eInvoicing mandatory for all businesses?

No, it is mandatory only for businesses exceeding the specified turnover threshold.

Can I generate eInvoices manually?

No, eInvoices must be generated through an integrated ERP system.

What happens if I do not comply with eInvoicing requirements?

Non-compliance can lead to penalties and legal consequences as per GST laws

How can I update my ERP software for eInvoicing?

Consult with your ERP service provider for updates and integration with the GST eInvoicing system

What is an Invoice Registration Portal (IRP)?

The IRP is a government portal where invoices are uploaded, validated, and assigned a unique Invoice Reference Number (IRN). The IRP also generates a QR code and digitally signs the eInvoice.

How do I access the eInvoicing system if I forget my login credentials?

You can reset your password by clicking on the 'Forgot Password' link on the eInvoicing portal and following the prompts to reset your login credentials.

Is eInvoicing applicable to B2C transactions?

No, currently eInvoicing is mandatory only for B2B transactions and specified transactions involving exports.

What should I do if the eInvoice is rejected by the IRP?

If an eInvoice is rejected by the IRP, check the error code and message provided by the IRP, correct the issues, and re-submit the invoice.

Can I cancel an eInvoice?

Yes, an eInvoice can be canceled within 24 hours of its generation. However, if the associated eWay Bill is active, the eInvoice cannot be canceled.

How do I verify if my supplier is generating valid eInvoices?

You can verify the eInvoices received from your suppliers by checking the IRN and QR code on the GST portal.

What happens to the existing process of invoice generation and reporting?

The existing process will need to be aligned with the eInvoicing system. Businesses must ensure that all applicable invoices are generated through the eInvoicing system and reported accordingly.

Are there any penalties for non-compliance with eInvoicing requirements?

Yes, non-compliance with eInvoicing requirements can result in penalties under the GST law, including fines and other legal consequences.

What information is included in the QR code of an eInvoice?

The QR code includes key details such as the GSTIN of the supplier and recipient, invoice number, invoice date, IRN, HSN code, taxable value, and total GST amount.

How does eInvoicing benefit the buyer?

eInvoicing ensures that the buyer receives a standardized, authenticated invoice, which can simplify input tax credit claims and improve overall transaction transparency.

Can I generate eInvoices using a mobile device?

Yes, as long as your ERP software or eInvoicing solution supports mobile access and integration with the eInvoicing system, you can generate eInvoices using a mobile device.

Are there any specific formats for eInvoices?

Yes, eInvoices must be generated in a format specified by the GSTN, which includes mandatory and optional fields as per the eInvoicing schema.

How often should I update my ERP system for eInvoicing compliance?

Regular updates are crucial to ensure compliance with any changes in eInvoicing regulations. Check with your ERP provider for updates and enhancements to the system.

Can multiple users within an organization access the eInvoicing system?

Yes, multiple users can be granted access to the eInvoicing system within an organization, provided they have the necessary credentials and permissions.

Is training required for staff to handle eInvoicing?

Training is recommended to ensure that staff are familiar with the eInvoicing process, understand the compliance requirements, and can efficiently manage the system.

How do I handle amendments to an eInvoice after it has been generated?

Amendments to an eInvoice cannot be made directly. If changes are required, the original eInvoice must be canceled (if within the permissible time frame), and a new eInvoice should be generated.

Related Business Registrations

In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.

FSSAI Registration
IE Code
Trademark Registration
Copyright Registration
Salaried Tax-filing
GST Return Filing

MCA Compliance

Each registered entity is required to meet its compliance duties at the close of each financial year. This generally includes auditing financial statements, filing income tax returns, and submitting annual forms to the Ministry of Corporate Affairs (MCA).

Compliance For Form Due date Penalty
Commencement of Business Intimation to Registrar for Commencement of Business Within 180 days from incorporation INR 50,000 on company and INR 1,000 per day on directors for each day of default
Annual KYC of Directors DIR 3 E-KYC 30th September of every year INR 5,000 for late filing
Appointment of Auditor Form ADT 1 Within 15 days of the AGM INR 300 per day (max INR 12,000)
Financial Statements Form AOC 4 Within 30 days from the AGM INR 100 per day of default
Annual Return Form MGT 7 Within 60 days from the AGM INR 100 per day of default

All Limited Liability Partnerships (LLP) in India must file annual returns with the Ministry of Corporate Affairs (MCA). FilingLounge provides affordable services to help you keep your LLP compliant.

LLP Compliance Form Due date Penalty
Annual KYC of Directors DIR 3 KYC 30th September of every year INR 5,000 for late filing
Annual Return Form 11 May 30th every year INR 100 per day of default
Statements of Accounts and Solvency Form 8 30th October every year INR 100 per day of default (minimum penalty INR 10,000)

In addition to the filings listed above, there may be other compliance requirements relevant to LLPs. To ensure all compliance needs of your LLP are met, please seek assistance from a Filinglounge Advisor.

Entity Compliance Form Due date
Private Limited Company Annual Return MGT-7 Within 60 days from the conclusion of the AGM
Financial Statements AOC-4 Within 30 days from the conclusion of the AGM
DIR-3 KYC DIR-3 KYC 30th September every year
Return of Deposits DPT-3 30th June every year
Appointment of Auditor ADT-1 Within 15 days from the conclusion of the AGM
Income Tax Return (Non-audit case) ITR-6 31st July every year
Income Tax Return (Audit case) ITR-6 30th September every year
Annual GST Return GSTR-9 31st December of the subsequent financial year
MSME Form Form 1 (MCA) half-yearly return by 31st October (April to September), & 30th April for the period October to March every year
Limited Liability Partnership Income Tax Return (Non-audit case) ITR 5 31st July every year
Income Tax Return (Audit case) ITR 5 30th September every year
Annual Return Form 11 30th May every year
Financial Statements Form-8 30th October every year

Note : There might be extra filings needed depending on your business type and activities. Talk to a FilingLounge advisor to get the right guidance for your company's compliance.