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E-invoice
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E-invoice

Owned by EaseMyGST - KB team
Last updated: Sept 30, 2024
2 min read

E-invoice (Electronic Invoice) is a system introduced under India's Goods and Services Tax (GST) framework to automate and standardize the process of reporting invoices to the government. It ensures real-time validation and authentication of invoices by the GST Network (GSTN), thereby improving transparency and reducing errors. Here’s a brief overview:

Key Features of E-Invoice:

  1. IRN (Invoice Reference Number):

    • Each e-invoice is assigned a unique IRN by the Invoice Registration Portal (IRP), which serves as its identity and ensures its authenticity.

  2. QR Code:

    • Once validated, the e-invoice is returned with a digitally signed QR code containing essential information (supplier details, invoice number, date, etc.). This helps verify invoice authenticity during transportation.

  3. Integration with GST Returns and E-Way Bill:

    • E-invoice data automatically flows into the GST returns (like GSTR-1) and can also be used to generate e-way bills, streamlining compliance processes.

  4. Real-time Reporting:

    • Businesses submit invoice details in real-time to the IRP, where the data is validated and stored, ensuring accuracy and preventing discrepancies in filing GST returns.

  5. Standardized Format:

    • E-invoice follows a standardized format prescribed by the GST Council, ensuring uniformity in data reporting across businesses.

Benefits of E-Invoice:

  • Automation and Efficiency: Reduces manual data entry and errors by integrating with ERP systems.

  • Compliance: Ensures GST compliance by providing real-time validation and verification.

  • Seamless Integration: The e-invoice system integrates with e-way bill and GST return filings, reducing redundant work.

  • Fraud Prevention: By assigning unique IRNs and QR codes, e-invoices prevent fraudulent activities like duplicate invoicing.

Who Needs to Generate E-Invoice?

Initially, businesses with an annual turnover of ₹500 crore and above were required to generate e-invoices. Over time, the threshold was gradually reduced to include smaller businesses. As of 2023, businesses with turnover over ₹5 crore must use the e-invoice system.

Process for Generating E-Invoice:

  1. Preparation: Invoice is created in the accounting or ERP system.

  2. Upload to IRP: The invoice details are sent to the Invoice Registration Portal (IRP).

  3. IRN Generation: The IRP validates the invoice and generates an Invoice Reference Number (IRN).

  4. Signed Invoice and QR Code: The IRP returns the signed invoice with a QR code for authentication.

  5. Integration: E-invoice data is automatically sent to the GST and e-way bill systems.

E-invoice improves efficiency, ensures better compliance, and simplifies GST return filings, making it a crucial component of India's GST framework.

 

 

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