e-Invoice from 1st August 2023 for Businesses with Turnover Exceeding Rs. 5 Crore

• e-Invoice business applicability from 1st August 2023

• E-Invoice process

• What should you do from 1st August 2023?

• Date of implementing e-invoicing in GST

• Business preparedness for e-invoicing in GST

• Who should issue an e-invoice?

With e-invoicing already implemented for businesses with a turnover exceeding 10 crores, since 1st October 2022. From 1st August 2023, e-invoicing will be applicable for businesses with a turnover exceeding Rs. 5 crores.

Electronic invoicing, popularly called as ‘e-invoice’ is a concept in which all B2B invoices are electronically uploaded by the supplier and authenticated by invoice registration portal (IRP) with an IRN and QR code. In turn, the IRN and QR code should be printed on the invoice by the supplier before issuing it to the buyer.

If you are new to the concept and would like to know more, please read ‘What is e-Invoice in GST?’

e-Invoice business applicability from 1st August 2023

In the recent update, businesses with an annual turnover exceeding 5 crores will also be mandated to issue e-Invoices from 1st August, 2023.

Annual turnover in the previous financial year	Date of implementation of e-invoice
Exceeding 10 Crore 1st October 2022	Exceeding 5 Crore 1st August 2023

e-Invoice process

e-Invoice requires you to generate the invoice data in the prescribed format (JSON), either using the ERP/business management software or offline tool provided by the portal. And, then upload it to the IRP which in turn validates and authenticates the invoice data with IRN and QR code.

The process to generate e-invoice is mentioned below:

• Generate the e-invoice in a prescribed format using the software solutions/business management software or use the offline tool provided by the portal

• Login and upload the e-invoice file to IRP. If the software is integrated with IRP via GSP, the upload of the JSON file will be automated, meaning system sends the required details directly to the IRP portal

• The IRP portal validates the key invoice elements and upon successful validation, the invoice data is authenticated with IRN number and QR code

• Next, you can download or receive the e-invoice file along with the IRN for the invoices that has been uploaded by you., Using the details received, update your invoice with IRN number and QR code. In case of an integrated environment of ERP and IRP via GSP, the software will automatically fetch and print such details.

Watch How to Generate e-invoices Using e invoice Software

What should you do from 1st August 2023?

If you are a business with an annual turnover exceeding 5 crores, e-invoice is applicable, and you need to electronically upload all B2B and B2G invoices to the portal. You need to generate the e-invoice in the required format and upload it to the IRP portal. The IRP portal will authenticate the invoice data and return the file with IRN and digitally-signed QR code.

Watch - e-Invoicing in TallyPrime

e-Invoicing mandates that an invoice remains valid only if it has IRN and QR code that is authenticated by the IRP (Invoice Registration Portal). Invoicing is a key process in every business, it’s a necessity to have business management software that will help you seamlessly generate e-invoices without impacting the way you use to operate your business.

Businesses using ERP/ business management software that seamlessly connects to the IRP system via GSP, and automatically prints the QR code and IRN on the invoice, will find it easy to manage e-invoice requirements without many changes to the business process. Read How to Transit to e-Invoice System? to know the change in invoicing practice and things for smooth adoption of e-invoice.

Date of implementing e-invoicing in GST

The GST Council has approved the introduction of e-invoicing in a phased manner for reporting of business–to–business (B2B) invoices to the GST System. This is introduced based on turnover criteria as detailed below:

Annual turnover	New date of mandatory implementation of e-invoice
Exceeding 500 crore	1st October 2020
Exceeding 100 crore	1st January 2021
Exceeding 50 crore	1st April 2021
Exceeding 20 crore	1st April 2022
Exceeding 10 crore	1st October 2022
Exceeding 5 crore	1st August 2023

*The date of e-invoicing implementation is updated as per the latest e-invoicing notification

As mentioned in the above table, the e-invoicing system is already in place for larger businesses with a turnover exceeding 500 crores from 1st October 2020. The mandatory implementation of an e-invoicing system for all businesses with a turnover exceeding 50 crores was from 1st April 2021.

Later, businesses with a turnover exceeding 20 crore were mandated to generate e-invoices from 1st April 2022, followed by mandating the e-invoice generation for businesses with a turnover exceeding 10 crores from 1st October 2022. In the recent update, e-invoicing will be applicable for businesses with a turnover exceeding 5crores from 1st August 2023.

The Government had considered only the largest businesses to start with the e-invoice system, and gradually, in a phased manner, more businesses are brought into the scope by reducing the turnover limit.

Business preparedness for e-invoicing in GST

The e-invoicing functioning depends on how well the accounting software or ERP system interacts with the IRP system. This is because an invoice is valid only if it contains an IRN and QR code which is authenticated by the IRP system.

As a business, for you to sail smoothly, the accounting 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.

With e-invoicing being introduced, the first step towards preparedness is to understand the e-invoice fundamentals and get used to the system. Secondly, need to consider accounting software which will not only generate the e-invoice data but also has an online capability to interact with the IRP system to generate e-invoice.

Who should issue an e-invoice?

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

e-Invoice Criteria	Result	Required to issue e-invoice?
Is your aggregate turnover in excess of Rs. 10 crores?	Yes	You have to issue an e-invoice for supply made by you
Is your aggregate turnover in excess of Rs. 5 crores*?	Yes	From 1st August 2023, you will have to issue an e-invoice for the supply made by you
Is turnover based on PAN India?	Aggregate turnover should be calculated by taking all the supplies made under GSTNs bearing the same PAN across India	If turnover exceeds Rs. 100 crores under the same PAN, you have to issue an e-invoice
Current or previous financial year turnover?	Aggregate turnover in any previous financial year from 2017.	Yes, you have to issue an invoice

* In the recent update, e-invoicing will be applicable for businesses with a turnover exceeding 5 crores from 1st August 2023.

FAQs:

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 invoices, there are also other documents which are required to be reported to IRP by the creator of the document. The following is 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?

Businesses 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 invoices, 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 interact with the IRP portal to complete the e-invoice process without manual intervention.