Union Budget 2020


Overview of E-invoicing

CBIC has introduced 2 significant changes in the overall GST compliance framework i.e. requirement of generating e-invoice and new GST return forms (GST ANX-1, GST ANX-2 and GST RET-1) that replaces current GST Filling formats i.e. GSTR-1 and GSTR-3B respectively. Both of these 2 requirements need to be complied with by taxpayers mandatorily from next financial year i.e. w.e.f. April 1, 2020.

Below category of taxpayers have been notified to mandatorily comply with e-invoicing requirements with effect from April 1, 2020:

a. Taxpayers having aggregate turnover (total of all GSTINs under a PAN) of more than INR 100 crores shall capture    Invoice Reference Number (‘IRN’) on every B2B outward supply invoice.
b. Taxpayers having aggregate turnover (total of all GSTINs under a PAN) of more than INR 500 crores shall capture Quick Response (‘QR’) Code on every B2C outward supply invoice. Such QR code will include the IRN as well.

From Basis
More than INR 500 Crores January 2020 Voluntary
More than INR 100 Crores February 2020 Voluntary
More than INR 100 Crores April 2020 Mandatory
INR 100 Crores or less April 2020 Voluntary


The unique IRN will be based on the computation of hash of GSTIN of generator of document (invoice or credit note or debit note), Financial Year, Document Type and Document number like invoice number. Similarly, the QR code generated from IRP will consist of the following e-invoice parameters:

a. GSTIN of supplier
b. GSTIN of Recipient
c. Invoice number as given by Supplier
d. Date of generation of invoice
e. Invoice value (taxable value and gross tax)
f. Number of line items
g. HSN Code of main item (the line item having highest taxable value)
h. Unique Invoice Reference Number (hash)

It is imperative to understand for the taxpayers that e-invoice does not mean an invoice that is to be generated from GSTN portal. Rather, every taxpayer can continue to issue invoices from their current ERP system, however, details of all such B2B invoices (or B2C invoices, as the case may be) shall be uploaded on Invoice Registration Portal (‘IRP’) and an unique IRN (or QR code, as the case may be) will be generated that needs to be printed on the tax invoices issued by taxpayer. This is required to make the invoice a valid document recognized under GST law i.e. without the IRN or QR code, as the case may be, invoices issued by taxpayer will not be a valid document under GST.

The principle behind implementation of e-invoicing is to mitigate tax evasion and to establish a common data base available to tax authorities, basis which all tax compliances and assessments will be driven in future. Further, as mentioned above, IRN or QR code is mandatory for creating a valid invoice under GST, recipient of such invoices will be eligible to avail input tax credit only for valid invoices issued with IRN or QR codes, as the case may be.

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