The introduction of the e-invoicing system by Goods and Services Tax has made it easy to generate and validate invoices for businesses. E-invoicing is required if the turnover value exceeds a specific limit now, and it asserts factors like clarity, fraud, and tax filing improvement. In this blog, you will find a simple step-by-step process for creating an e-invoice through the GST portal.
What is an E-Invoice in GST?
An e-invoice can be defined as a standard version of an invoice prepared and verified by the GST portal. After creation, the e-invoice is provided with a globally unique Invoice Reference Number (IRN) and carries a QR code for authenticity. With e-invoicing, data transmission exchange between the suppliers, the recipients, and the GST system is minimized, and the likelihood of errors being made by hand is minimized. This system is compulsory for sellers whose turnover is above Rs. 10 crore per annum and applies to B2B operations (business-to-business).
Eligibility for E-Invoicing
The e-invoicing is voluntary or mandatory depending on the nature of the business, where it turns over Rs.10 crore in the preceding financial year. Additionally, e-invoicing is compulsory for:
- The legal entities registered under Goods and Service Tax (GST) who undertake the supplies of goods or services.
- Supply within B2B category whereby both the selling firm and the buying firm are registered under the GST.
Small businesses with an annual turnover of up to Rs. 10 crores can register themselves on the e-invoicing portal on a completely voluntary basis, and it is expected that it will help simplify GST compliance and filing.
Steps to Create an E-Invoice on the GST Portal
To produce an e-invoice in the GST portal, one has to tap on a sequence of simple steps presented below. Here’s a detailed breakdown:
1. Log in to the GST Portal
Firstly, for this interaction, the user has to access the official GST website through the link www.gst.gov.in. The User can log in with the help of a GSTIN ID and password. Upon completing the login process, you will be able to access the features to generate e-invoice.
2. Check if Your GSTIN is Enabled for E-Invoicing
To create an e-invoice, it is mandatory to have the GSTIN activated for e-invoicing. You can verify this under the ‘Services’ link available on the GST portal. In case your GSTIN is not enabled for e-invoice registration, one needs to apply for e-invoice registration and to do so, required documents and information have to be submitted.
3. Enter Invoice Details
When you are ready to go live on e-invoice, go to ‘Services’ and then ‘E-Invoice’ in the portal. To create a new invoice, select ‘Create New’.
You will need to fill in the following details:
- Invoice Type: Select the right type of invoice, such as B2B, export, and others.
- Supplier and Recipient Details: Items like the GSTIN of the supplier along with the legal name of the supplier and of the recipient, their physical address, or phone number and email address should be provided.
- Invoice Number: Type the invoice number in the correct sequence.
- Invoice Date: It is also recommended that the date of the invoice be defined.
- Tax Details: State the HSN/SAC codes of goods or services you wish to include, along with rates of tax on them.
- Item Details: List the items offered, their quantities, their prices and taxes incurred in their production or purchase.
4. Create the Invoice Reference Number (IRN)
Often, the invoice entries will have to be input and checked so that the portal can authenticate their details. If there are no errors, then the system will produce an Invoice Reference Number (IRN) that pertains only to that particular invoice. This number is used to verify the invoice and is very useful for GST returns purposes.
5. Download the E-Invoice with Quick Response Code
Once the IRN is generated, the e-invoice will be created in the structured format in the portal concerned. QR code will be placed in the invoice that holds IRN and some of the additional invoice-related details so that recipients or tax authorities can easily check them.
Sometimes, you can forward the PDF of the e-invoice to the customer or even share it with them. The e-invoice will be made available in the GST portal for future use.
6. Generate the E-Way Bill (If Applicable)
Your invoice must specify both the movement of goods and where the total value of such an invoice is over Rs. 50,000, then you will be required to create an e-way bill. Depending on the specific type of e-invoice that will be generated by the portal after giving the option to prepare the e-way bill, the latter will have the ability to pull information from the e-invoice. You can generate and download the e-way bill and inform the transporter about it.
7. The Next Step is Uploading the E-Invoice to the GST Portal.
After the creation of the e-invoice, it will go to the GST system, and you will see it in your GSTR-1 return. This saves a lot of time since it will not require the laying down of manual data entry and makes the task of filing GST returns rather efficient and accurate.
Conclusion
E-invoice generation can be easily created on the GST portal as it is one of the best ways to make GST compliance easier and smoother for businesses. Thus, following the steps mentioned above, it is quite easy to generate e-invoicing to support accurate tax reporting with minimal chance of mistakes. Since e-invoicing is progressively becoming a mandatory step in interacting with business partners, the latest rules need to be followed not to be penalized. Finally, e-invoicing can be seen as a way towards gradual improvement of the Tax system in India as part of growing India’s economy to embrace the new era of digital business and innovation. Despite following the digital agenda, e-invoicing will be instrumental in transforming invoicing and tax filing for organizations in India in the future.
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