In this article, you will learn:
The GST Council finalized and approved the E-Invoicing Standard in its 37th GST Council Meeting. It accepted the introduction of e-invoicing in a phased manner starting from January 1, 2020.
Much like the new system for return filing under GST, the e-invoicing standard would first be implemented on a voluntary basis. The purpose of introducing the e-invoicing standard is to ensure that the e-invoices generated by one software can be read by e-invoice generated by others.
Contrary to the misconception that e-invoice would enable the centralized generation of invoiced from the common portal, this is just a standard which if implemented would enable interoperability of invoices across the GST system.
That is to say, e-invoices shared between the seller and his buyer, agent, banks, or any other entity are easily read by machines and eliminate the errors resulting from data entry.
In this article, you will learn what is e-invoicing, contents of e-invoice, and its format.
What is E-Invoicing?
E-invoicing is a standard format rolled out by goods and services tax network (GSTN) for all the suppliers registered under GST. Such a standardized approach is adopted to ensure that there is interoperability of the invoice data. Suppliers under e-invoicing would continue to generate their invoices through their accounting system or ERP’s in the same way as they are doing currently.
The e-invoicing system will only determine the invoice schema and standard to make sure that invoices generated by multiple billing software are read by machines resulting in the elimination of fake invoices, data entry errors and easy compilation of tax invoices.
Contents of E-Invoice
The schema for e-invoice contains both optional fields and mandatory fields. Mandatory field means components that must necessarily form part of the invoice so as to be a valid invoice under the e-invoice standard.
Optional fields, on the other hand, refer to the components that must not compulsorily be included in an invoice. That is to say, such components are included as an when required by the business entity.
It must be noted that the invoices once prepared in the JSON file format by the supplier are uploaded on the invoice registration portal so as to generate or get the invoice registration number validated for the invoice uploaded.
This is because under the e-invoicing system the invoices having a unique IRN would only be deemed as valid. Thus it is important for the supplier to fill all the mandatory fields so that such an invoice is authenticated by the invoice registration portal.
Thus, the following are the components that must compulsorily form part of the e-invoice to be generated.
- Invoice type
- Invoice type code
- Supplier GSTIN
- Invoice number
- Invoice date
- Reverse charge
- Unique Identification Number
- Details of the recipient such as GSTIN, state code, place, PIN code
- Details of the consignee, that is entity to whom the goods are shipped. This would include details such as Shipping to GSTIN, Shipping To State, supply type, transaction mode etc.
- Details of goods and services such as item description, quantity, price, value of goods and services, GST rate, GST Value
- Total invoice value
Authorization of Invoices By IRP
The supplier uploads the invoices generated in the JSON file format to the IRP. Once this is done, the IRP validates or generates Invoice Reference Number (IRN) in case where the supplier has not generated IRN via the billing software.
After generating the IRN and verifying the same, IRP digitally signs the invoices uploaded by the supplier. This signed e-invoice is deemed as valid which is further used by GST and e-way bill system.
Once e-invoice is digitally signed, IRP generates a QR code. This QR code contains the IRN, important invoice parameters such as GSTIN of the supplier and the recipient, invoice number, date of invoice, invoice value, number of line items, HSN Code of the main item (that is item having the maximum taxable value), IRN etc.
List of Mandatory Fields
The schema for e-invoice contains the following columns:
|1.||Technical Field Name||This refers to technical name used for the fields.|
|2.||Cardinality||Cardinality means the manner in which a field would occur in the schema. For instance, 1..1 means that the item is mandatory and can be mentioned only once.|
|3.||Small Description of the Field||This refers to short description of the Fields specified in the Schema invoice.|
|4.||Is it Mandatory on Invoice||This means whether a field is compulsory to be mentioned in the invoice or not.|
|5.||Technical Field Specifications||This specifies the limitation of string. Thus, it includes maximum length, date format, decimal places.|
|6.||Sample Value of the Field||This is given for the taxpayer’s understanding.|
|7.||Explanatory Notes of the Field||This column explains, in brief, the meaning of the technical field given in the schema of the invoice. This helps the supplier to understand the importance of the technical field and provide details in the invoice accordingly.|
There are a number of mandatory fields that form part of the Schema for a tax invoice. To check out the mandatory fields in the schema for invoice, click here to download the schema and template of e-invoicing.
E-Invoice Excel Template
GSTN has provided an e-invoice excel template on the GST portal. This contains two templates: one containing the mandatory fields and the other containing all the fields.
Following is the snapshot of the e-invoice mandatory template.