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e-Invoicing under GST
Starting April 1st 2021, the businesses with annual aggregate turnover above 5 Cr are now a part of the e-Invoicing under GST.

This was an anticipated change and in the upcoming months, this slab could go down to 1 Cr or lesser.

With more taxpayers entering the e-Invoice system, this has become important that the businesses understand the fundamental requirements that they should expect from their ERP.

In this article, we will provide you with few suggestions that a business has to do to its ERP solution so that it is fully compliant with all the e-Invoicing rules as well as the GST laws.

Some of the changes mentioned in the article are mandatory while some of them will help enhance your GST e-Invoicing experience.

Transaction Classification by the ERP Solution for e-Invoicing under GST

e-Invoicing solution

Your ERP system should have seamless integration with the e-Invoicing portal and should identify the differences between the types of transactions.

Following are the major types of transactions that your ERP solution should identify:

  • Business to Business (B2B)
  • Business to Government (B2G)
  • Supply applicable for Reverse Charge
  • Supply through e-commerce operators
  • Exports
Your ERP system should identify these categories based on the tax category at the time of e-Invoice generation.

Separate B2B & B2C Invoices for e-Invoicing under GST

e invoice system
As discussed above, it is evident that e-invoicing applies only to the B2B transactions including the B2G transactions as well.

Hence, your ERP should have a classifier that identifies B2B invoices from the B2C invoices.

This provision would be very useful when there are bulks of invoices to be reported to the IRP portal, and classifying these invoices manually is a cumbersome task.

GSTHero’s e-Invoicing solution will help you to process a large volume of invoices with proper classification of them.

Identify IRN, QR Code in the e-Invoice Generated

Invoice registration portal

IRP assigns a uniquely generated IRN (Invoice Reference Number) to every e-Invoice generated on the IRP portal.

On the same e-Invoice, a unique QR code is embedded with the information corresponding to that particular e-Invoice under GST.

As an important part of the validation process, your e-Invoice will be digitally signed.

Now, your ERP is expected to do the following things.

Your ERP software should identify the unique IRN number and should be able to print it on the hard copy.

It should automatically detect the QR code on the e-Invoice & should attach it to the printed e-Invoice for further reference.

It should be enabled to detect the digital signature embedded on the e-invoice received from the IRP portal.

This digital signature is the proof that your e-Invoice is authenticated by the government which will help you in filing the GST returns ahead.

If it is already doing it, well & good & if not, then you have to make the appropriate arrangements for the same.

Mandatory Fields as per e-Invoice Schema for e-Invoicing under GST

e invoicing schema
One of the primary & foremost tasks of any ERP system is to provide all the mandatory fields as per the Schema provided by the IRP portal.

This is an important step towards a successful e-Invoice generation process. Once your ERP is well integrated with the schema notified by the CBIC, it will be a quick process further for an e-Invoice generation.

Missing any one of the mandatory fields will fail the e-invoice generation.

Following are the ‘Mandatory Fields’ in the e-Invoice Schema.

IRN

Supplier Legal Name

Billing Address1

List (items)

Shipping To Address1

Invoice Type Code

Supplier GSTIN

Billing State

Tax Total

Shipping To State

Invoice Number

Supplier Address1

Billing Pincode

Paid amount

Shipping To PIN code

Invoice Date

Supplier State

Payee name

Amount due for payment

Sub supply Type

Invoice Period Start Date

Supplier Pincode

Payer Financial Account

Tax Scheme

Transaction Mode

Invoice Period End Date

Billing Name

Mode of Payment

Shipping To Name

Company Name

Preceeding Invoice Reference

Billing GSTIN

Financial InstitutionBranch

Shipping To GSTIN

Address1

 State

Preceeding Invoice Date

Billing POS

Dispatch From details

SLNO

PIN code

Quantity

Rate

Assessable Value

GST Rate

IGST amt

CGST amt

SGST amt

Total Invoice value

Batch name

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Reconciliation of GSTR-1 against Your Sales Records

Auto populate e-Invoice
The IRP portal has now enabled the auto-population of e-Invoice data into your GSTR-1 form.

This provision is for the benefit of the taxpayers and can help in saving time while filing the GSTR-1 form.

Following details from the e-Invoice will be auto-populated in the GSTR-1 of the taxpayer:

Supply type

Auto-populated in GSTR-1

Taxable outward supplies made to registered persons (excluding RCM registered taxpayers)

B2B 4A - Supplies other than those (i) attracting reverse charge and (ii) supplies made through e-commerce operator

Taxable outward supplies to registered persons with reverse charge

B2B 4B - Supplies attracting tax on reverse charge basis

Export supplies

EXP 6A – Exports

Credit /Debit notes issued to registered persons

CDNR 9B – Credit or debit notes

Credit/Debit notes  issued to unregistered persons

CDNUR 9BCredit /Debit Notes (Unregistered) – with UR type as Exports with payment &  without payment of tax

Hence, your ERP solution must have GSTR1 vs Sales record reconciling tool.

This reconciliation has to be accurate else there can be errors introduced in your GSTR-1 form.

GSTHero provides a seamless Reconciliation tool for the GSTR-1 returns.

Our auto-reconciliation tool will save about 80% of your time as compared to manual return filing.

Keeping Trail of Cancelled Invoices for e-Invoicing

e invoice cancellation

The ERP software should take care that the same document number is not assigned to two e-Invoices.

The document number assigned to any cancelled invoice should not be duplicated.

To avoid these conflicts, there should be a robust feature in place which allows you to keep the track of all the cancelled invoices in a single place.

GSTHero’s Reconciliation Solution will help you to keep track of all such invoices by classifying them into different categories like Cancelled records, Mismatched records, Missing Records, etc.

Archiving Your Invoices for e-Invoicing under GST

gst einvoicing
The Invoice Reference Portal saves the invoices for 24 hours only.

Once the e-Invoice gets generated, this data is then uploaded to the GST return relevant to the taxpayer.

Now, this data in the GST returns will be available for the complete financial year.

Businesses need to have an alternative solution of storage of their invoices with their ERP software.

This storage of old invoice is necessary for future references.

To Summarize

We saw 7 major modifications you should do to your ERP for staying 100% compliant with the e-Invoicing norms.

Individual businesses have to get their IT infrastructure ready for the e-Invoicing regime.

GSTHero’s   ERP Integration can help you establish seamless integration between your ERP and the e-Invoice portal, IRP.

GSTHero’s ERP Integration gives you the following benefits:

  • 1-click e-Invoice generation right from your ERP
  • Bulk generation of e-Invoices & also allows bulk cancellation
  • Integrates with all the major ERPs
  • 100% compliant with the GST Laws
  • GSTHero is a government-appointed GST Suvidha Provider (GSP) & hence we are operating under authentic & safe standards of practices.

For more information, reach out to us at info@gsthero.com / +91 800 7700 800

Stay Updated, Stay Ahead!

Until the next time…


About the author

Gaurav is an Engineer by training with a deep interest in Economics & Finance. He has been associated with the Fin-Tech industry for quite some time now. He writes for GSTHero for topics including GST Compliance, GST Structure, etc & aims to break down complicated technical jargon into simple terms for the taxpayers. His expertise includes GST Laws, Corporate Finance & Macro-Economics.

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