Who Should Issue an e-Invoice in GST?

Yarab A |Updated on: February 25, 2022

1 ^st October, 2020, the day on which e-invoice concept was introduced into the GST system. The GST Council has approved electronic invoicing in a phased manner which requires businesses to report B2B invoices to IRP (Invoice Registration Portal).

In the first phase, e-invoice was introduced for businesses with a turnover of 500 crores and above. In the second and third phase, e-invocing was applicable for businesses with a turnover of 100 and 50 crores.

As per the latest update, e-invocing will be applicable for businesses with a turnover of 20 crores and more, from 1st April,2022. Read 'Date of implementing e-invoicing in GST' to know the e-invocing implementation date.

For the first time, the standard for invoicing is being introduced in the country, it is imperative for businesses to understand the fundamentals and get familiarized with the e-invoicing system. The e-invoicing concept being new, the most asked question is who should issue an e-invoice?

Let’s discuss and understand types of business who should issue an e-invoice?

Who should issue an e-invoice?

Businesses who are required to issue an e-invoice depends upon the aggregate annual turnover. So, if your business is registered under GST, then you should check with the following table to ascertain requirement of issuing e-invoice.

Note: For businesses with a turnover of 100 crores and above, e-invoice is already implemented 

To summarize, if you are a business whose aggregate turnover in the financial year exceeds 50 Crores, it’s mandatory to issue e-invoice for supplies made by you from 1st April 2021.

Now that we are clear with who is required to issue an e-invoice, the next question which comes to mind is that what type of transactions are covered under e-invoice. 

What type of documents are to be reported to GST system?

As the name suggests, an invoice issued by the supplier to the customer is a primary document covered under the e-invoice concept. Other than invoice, there are also other documents which are required to be reported to IRP by the creator of the document. The following are the list of documents covered under the ambit of e-invoice.

• Invoice by Supplier
• Credit Note by Supplier
• Debit Note by Supplier
• Any other document as notified

Overall, all such documents which have a repercussion on Input tax credit (ITC) are covered under e-invoice.

Will the invoice process change with the e-invoice concept?

It is believed that business can continue to generate their invoices through their existing accounting software, and they would not be required to generate any invoices on the GST Portal or any other portal for the being. But the fact is that an invoice will be valid only if it has IRN and QR code authenticated by the IRP.

To issue a valid invoice, the businesses would require to upload invoice data prepared using the accounting software to the IRP. After which the portal will generate an IRN (Invoice Reference Number) and QR code which will form part of proof for all the documents that are generated for movement of goods from seller’s place to buyer’s place. Here, the business management software you use will play a key role not only in generating GST compliant invoice but also to ensure you sail through the new mandate smoothly.

The business management software you use should have a built-in capability to generate e-invoice data in the prescribed format and more importantly, seamlessly interacts with the IRP portal to complete the e-invoice process without the manual intervention.

Video on e-invoicing in TallyPrime

Know more about e-invoices in GST