What is E-Invoicing?

1. Each B2B invoice to have a unique Invoice Reference number (IRN) generated by GST Invoice Portal 
2. Introduced with the motive to curb the malpractices of fraud and issuing fake invoices.

Invoice to be prepared in same manner as before. Only now Invoice needs to have an additional IRN to be printed on Invoice. 

1. Government Departments;
   
2. A local Authority;
   
3. Special Economic Zones;
   
4. Goods Transport Agency engaged in transportation of goods by road;
   
5. An insurer or a banking company or a financial institution including a NBFC;
   
6. Supply in passenger transportation service;
   
7. Supply in services by way of admission to exhibition of cinematograph films in multiplex screens.

Contents of E-Invoice

1. QR Code
   
2. Invoice Reference Number (IRN)
   
3. Acknowledgement Number

How to generate E-Invoicing

1. Any accounting software which is registered with E-invoice portal i.e. Tally Prime, Marg, Busy etc.
   
2. Excel utility available on E-invoice portal.
   
3. E-Invoice portal: https://einvoice1.gst.gov.in/.

Consequences for non-issuing E-Invoice

1. If no IRN mentioned on the generated invoice then invoice is considered as Invalid.
   
2. Penalty for non-issue of invoice
   
1. u/s 122(1)(i) provides that where a taxable person who supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any such supply, he shall be liable to pay a penalty of RS 10,000 in CGST and SGST or an amount equivalent to the tax evaded, whichever is higher.
   
3. Non-compliance may also result into detention and seizure during the movement of goods under Sec 129 of the Act.

Key Takeaways

1. E-invoicing is not applicable to B2C transactions or Exempt Transactions.
2. E-invoice cannot be amended. Cancellation allowed within 24 hours.
3. Physical copy of Invoice need not be carried (during movement of goods). It is sufficient if QR code having IRN is produced electronically. Signature of seller not mandatory.
4. Reconciliation of e-invoice level data: There can be instances where tax payers need to update GSTR-1 after uploading the invoice into the IRP. Thus, reconciliation of both e-invoice portal and GST portal needs to be carried out by the taxpayer.

From the perspective of buyer: If seller (whose turnover exceeds Rs 10 Cr in any financial year from FY 17-18) have not generated e-invoice then buyer will not be eligible to claim ITC of same.