BRIEF BACKGROUND

India is moving one step further towards the aim of achieving digital control in meticulous operation of GST through implementation of e-Invoicing at least for large businesses to start with. The Hon’ble Prime Minister of India Shri Narender Modi Ji has always promoted and guided us towards a ‘Digital India’ thereby moving towards automation which is certainly very-very useful as is proved in the present difficult time of COVID pandemic, otherwise it would have been impossible for many businesses to run and exist. Even Government could function due to the Information Technology transformation extensively adopted in the last few years. Many changes have been introduced in the taxation system as well, whether it be Indirect or Direct Taxation like face-less assessments etc.

In this journey towards the digital age, the GST Council in its 37th meeting held on 20th Sept 2019 has approved the scheme of e-Invoice under GST, giving effect to the same Government has issued Notification No. 68/2019-CT to 72/2019-CT dated 13 Dec 2019 which laid the roadmap for implementing E-Invoicing mandatorily from 1st April 2020. This was followed by Notification No.- 61/2020-CT dated 30th July 2020 wherein the applicability of the E-Invoice along with the revised limits and New Format launched for implanting the same from 1st Oct 2020.

This compilation here under discuss the updated law regarding the e-Invoicing as on date taking effect of all the amendments at different points along with the addition, deletion as well as the key areas of focus in the FORM GST INV-01.

LEGAL BACKGROUND

1. Tax Invoice has been dealt under Section 31 of the Central Goods & Service Tax 2017 (hereinafter referred to as “CGST Act 2017”). Wherein Section 31(1) deals with supply of Goods and Section 31(2) deals with Supply of Service. Both the sub-sections vide their proviso empowers Government who may with recommendation of the GST Council issue Notification for special category of taxpayers who would require issuing tax invoice in such manner and such time as may be prescribed.

2. Although the applicability of the e-Invoicing provision was made from 1st April 2020, but the provisions stated in Section 31 was amended through the Finance Act 2020, as the same was not empowering the Government to notify e-Invoicing provisions in respect of Supply of Service. A comparative table in this regard, is stated hereunder to understand the essence of amendment or need for such changes:

BEFORE AMENDMENT	AFTER AMENDMENT	ANALYSIS OF AMENDMENT
Proviso to Section 31 (2) Provided that the Government may, on the recommendations of the Council, by notification, subject to the condition mentioned therein, specify the categories of services in respect of which (i) any other document issued in relation to the supply shall be deemed to be a tax invoice; or (ii) tax invoice may not be issued]	Proviso to Section 31 (2) Provided that the Government may, on the recommendations of the Council, by notification, (a) specify the categories of services or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed; (b) subject to the condition mentioned therein, specify the categories of services in respect of which (i) any other document issued in relation to the supply shall be deemed to be a tax invoice; or (ii) tax invoice may not be issued]	This clause (a) in the proviso to Section (2) was inserted by Finance Act 2020, this amendment was done to give empower the government to frame rules & issue guidelines for implementing e-Invoicing Provisions in relation to supply of Service. Rule 48(4) was Notified on 13-12-2019, but at that time Government do not have the power to implement e-Invoicing provision in respect of Supply of Service. It was a very clever move, which was not noticed by many professionals and this amendment was analysed as pass on amendment in line with provisions stated in Section 31(1), although had a deep implication.

3. The Government exercising the power vested in proviso to Section 31(1) & 31(2) has introduced the concept of e-Invoicing through Rule 48 of the CGST Rules 2017. Various notifications have been issued which is also amended time to time thereby extending the time limit for its applicability. The flow and series of notification issued in this regard along with the summarised analysis of the same is discussed hereunder in tabular manner:

S. No.	Notification No.	Dated	Summarised Content
1	NN-68/2019-CT	13-12-2019	Amendment made in Rule 48 of CGST Rules 2017, thereby inserting Sub-Rule (4), (5), (6): 1. Class of registered persons to be notified 2. Invoice shall contain particulars mentioned in FORMGST INV-01 3. An Invoice Reference Number (IRN) shall be obtained from Common Goods and Services Tax Electronic Portal (to be notified) 4. Any other Invoice issued by a person on whom Rule 48(4) shall not be treated as an invoice i.e. it is mandatorily to be complied with. 5. The obligation to issue triplicate invoice (in case of goods) and duplicate invoice (in case of services) shall not apply to a person on whom E-invoicing is applicable.
2	NN-69/2019-CT	13-12-2019	List of Common Goods and Services Tax Electronic Portal notified on which unique IRN need to be generated for each E-Invoice (i) www.einvoice1.gst.gov.in; (ii) www.einvoice2.gst.gov.in; (iii) www.einvoice3.gst.gov.in; (iv) www.einvoice4.gst.gov.in; (v) www.einvoice5.gst.gov.in; (vi) www.einvoice6.gst.gov.in; (vii) www.einvoice7.gst.gov.in; (viii) www.einvoice8.gst.gov.in; (ix) www.einvoice9.gst.gov.in; (x) www.einvoice10.gst.gov.in.
3	NN-70/2019-CT	13-12-2019	Registered Person having Aggregate Turnover >100 Cr. shall issue E-Invoice from 1st April 2020 (This NN is Superseded by NN-13/2020-CT dated 21-03-2020)
4	NN-71/2019-CT	13-12-2019	In Rule 46 of the CGST Rules 2017, Sixth Proviso inserted by Finance by CGST (Fourth Amendment) Rules 2019 shall be applicable from 1st April 2020 i.e. QR code provision shall be applicable from 1st April 2020
5	NN-72/2019-CT	13-12-2019	1. Registered Person having Aggregate Turnover >500 Cr. shall issue an E-Invoice to unregistered person having QR code on the same i.e. On B2C supply QR code is mandatory if turnover is exceeding 500 Cr. 2. Also, Dynamic Quick Response (QR) code made available for payment cross-reference shall be deemed to be having Quick Response (QR) code. (This NN is Superseded by NN-14/2020-CT dated 21-03-2020)
6	NN-13/2020-CT	21-03-2020	1. This NN has Superseded the NN-70/2020-CT dated 13-12-2019. 2. Registered Person except Insurance Company, Banking Company Financial Institution, NBFC, GTA, Person Providing Passenger Transportation Services & Person selling Movie Tickets in multiplex 3. Aggregate Turnover >100 Cr. shall issue E-Invoice 4. Effective Date- 1st October 2020
7	NN-14/2020-CT	21-03-2020	1. This NN has Superseded the NN-72/2020-CT dated 13-12-2019. 2. Registered Person except Insurance Company, Banking Company Financial Institution, NBFC, GTA, Person Providing Passenger Transportation Services, Person selling Movie Tickets in multiplex as mentioned in Rule 54 (2) (3) (4) (4A) CGST Rules 2017 & OIDAR Service Provider as defined under Section 14 of Integrated GST Act 2017 (hereinafter referred as IGST Act 2017) 3. Recipient is Unregistered Dealer i.e. on B2C Supplies 4. Aggregate Turnover >100 Cr. shall generate QR code on the issued E-Invoice for B2C supplies 5. Effective Date- 1st October 2020
8	NN-60/2020-CT	30-07-2020	Revised FORM GST INV-1 issued in place of earlier FORM GST INV-1
9	NN-61/2020-CT	30-07-2020	1. This NN has amended NN-13/2020-CT dated 21-03-2020 and extended the exemption to SEZ unit thereby increasing the limit to 500Cr. 2. Registered Person except SEZ Unit, Insurance Company, Banking Company Financial Institution, NBFC, GTA, Person Providing Passenger Transportation Services & Person selling Movie Tickets in multiplex 3. Aggregate Turnover >500 Cr. shall issue E-Invoice 4. Effective Date- 1st October 2020

PROCESS FOR GENERATING E-INVOICE & UPLOADING DATA ON GST & E-WAY PORTAL

This new system of e-Invoice is quite useful and advantageous to curb the black economy as well as the circular trading and fake invoice racket running in the economy, although having an inherent limitation of cost and extensive IT support requirement. In this juncture the process or the flow in which e-Invoice generation, registration and receipt of confirmation works is discussed hereunder:

A. Generation of Invoice Reference Number (in Short “IRN”) & Uploading on Invoice Registration Portal (in short “IRP”):

1. The taxpayers who is mandatorily required to issue E-invoice under Rule 48(4) of the CGST Rules 2017 shall issue the Tax Invoice as defined in Section 31 of the CGST Act 2017 having all the mandatory field as mentioned in FORM INV-01 using its ERP Software say SAP, Tally, Busy, Oracle etc.

2. E-invoice does not mandate businesses to issue the invoice on central portal of tax department, they need to issue it on their internal systems only, the government has only specified the invoice schema and standard for uniformity.

3. The supplier needs to generate a Json file of the E-invoice having all the required fields and information. Supplier has the option to either generate a Unique IRN called a hash at its own facility and then register on the IRP which would validate the hash so generated and becomes the unique IRN number or Supplier may upload the Json file of the E-invoice at IRP and then IRP would generate a Unique IRN which shall become the final IRN number.

4. This final IRN number whether generated by IRP or validated by IRP shall be unique to each invoice with unique identity for entire financial year in the entire GST System for a taxpayer.

5. The Hash algorithm mentioned above is based on a popular algorithm SHA256. This Hash algorithm constitutes 3 dimensions for generating the IRN i.e. Supplier’s GSTIN, Supplier’s invoice number and Financial year (YYYY-YY).

6. The uploading of the JSON of the e-invoice to be done by supplier on IRP can be done through following modes

a. Web based

b. API based

c. SMS based

d. Mobile app based

e. Offline tool based

f. GSP based

7. For the purpose of uploading the Json by supplier the government vide NN-69/2019-CT dated 13th Dec 2019 has notified a list of websites on which these E-Invoice can be Uploaded for validating or generating of IRN & QR Code.

8. The QR code as mentioned above would be generated containing GSTIN of seller and buyer, Invoice number & date, number of line items, HSN details as per value of commodity and hash etc.

9. For facilitating the E-invoice culture the government has taken following measures i.e.

a. Asked all accounting and billing software companies adopt the E-invoice standard to facilitate JSON generation & uploading by the user.

b. Although the E-Invoicing is mandatory for large concerns but still for small taxpayers can us 8 accounting/billing software issued and available at GSTN.

c. Further GSTN will provide Offline Tool for generating and uploading the JSON file

d. Furthermore, many companies have come up with their E-invoicing solution so the taxpayers can use this commercially available accounting/billing software’s.

B. Updating details by IRP to GST Portal & E-Way Portal

1. The E-Invoice data as uploaded on IRP would be transmitted to GST portal which would facilitate in auto populating relevant parts GST Returns.

2. In case of the current return filling regime i.e. GSTR-1 of the supplier and GSTR-2A of the recipient shall get auto populated and for the new proposed system the annexure ANX-1 of the supplier and ANX-2 of the recipient shall get auto populated , which in turn will determine liability and ITC.

3. Further the E-Way bill portal shall auto fill the Part-A of e-way bill by using this data and only the vehicle details need to be filled in Part-B of the e-way bill.

DECODING OF THE FORM INV-01

With regards to the notified FORM INV-01, which has been drastically changed vide NN-60/2020-CT dated 30-07-2020, and a new E-invoice scheme is being launched in the public domain applicable from 01st Oct 2020. This new format consists of sections ranging from 1 to 12 which is marked as mandatory & optional wherein fields are being defined in each section which is further marked as Mandatory & optional. Amongst some fields reference has been made to annexures having further details of that particular fields. To be precise there are 12 sections having approx. 131 fields and, in some fields, reference is made to annexure which is 5 in number. An effort has been made to define the references and headings of each sections and bifurcating the same into mandatory & optional fields and sections in the tables below to have a bird eye view of the form. The description in these fields are general description comprising of all the clauses of Rule 46 of the CGST Rules 2017 and based on general trade practise.

Statement Showing breakup of Mandatory Sections of Form INV-01 along with annexure reference
S.No. (As per INV-01)	Heading (As per INV-01)	Total Fields	Mandatory Fields	Optional Fields	Annexure Reference
1	Basic Details	8	5	3	–
4	Supplier’s Information	10	6	4	–
5	Recipient’s Information	12	6	6	–
8	Invoice items details {Except Batch Details (Sr. No.-A 1.2.5) & Product Attribute Details (Sr. No.-A 1.2.30)}	28	8	20	A 1.2
9	Document Total	13	2	11	A 1.3
Total		71	27	44
Note: In Mandatory Section, the fields are of two types i.e. Mandatory & Optional Fields. Wherein optional fields may be left blank

Statement Showing breakup of Optional Sections of Form INV-01 along with annexure reference
S.No. (As per INV-01)	Heading (As per INV-01)	Total Fields	Mandatory Fields	Optional Fields	Annexure Reference
2	Document Period	2	2	0	–
3	3.1. Preceding Document Reference	3	2	1	–
	3.2. Receipts/Contract Reference	8	0	8
6	Payee Information	0	0	9	–
7	7.1. Ship to Details	8	5	3	A 1.0
	7.2. Dispatch from Details	6	5	1	A 1.1
8	Invoice items details-Batch Details (Sr. No.-A 1.2.5)	3	1	2	A 1.4
	Invoice items details-Product Attribute Details (Sr. No.-A 1.2.30)	2	0	2	A 1.5
10	Extra Information	8	1	7	–
11	Additional Supporting Documents	3	0	3	–
12	E-way Bill Details	14	7	7	–
Total		57	23	43
Note: In Optional Section, the fields are of two types i.e. Mandatory & Optional Fields. Wherein Mandatory fields must be filled.

IS THE ‘E-INVOICE’ ACTUALLY THE NEED OF THE HOUR?

Having Glimpse over the roadmap of the applicability of e-Invoice and legal provisions in this regards it is utmost important to understand whether it was the need of the hour or not.

1. GST portal since implementation of GST has faced a lot of technical glitches thereby troubling the taxpayers as well as the department. Wherein as on date as well disputes and hardship to taxpayers are not being resolved and pending before various Courts.

2. Return filling process which was considered the backbone of this Digital Taxation system, is not at all robust right form the beginning till date and wherein in the name of ‘One Nation One Tax’ different due dates based on turnover and states are being introduced in staggering manner to deal with the technical glitches.

3. The new return system which was to be brought into the picture a while ago is even not clear on account of the dates on which the same shall be implemented in the system.

4. IRP is the facility to be provided by the Government which needs additional funds and IT facility. In a situation where states are even not being given the compensation as per the GST law, how the funds would be allocated for the same.

5. Further the IT facility, as of now is not able to cater the existing facility on the portal and putting an additional load might go very adverse.

6. The industry as well after standing back only partially from the COVID-19 outbreak with lack of manpower and funds need to plug additional working capital and human resources for this new e-Invoicing regime.

In nutshell if not properly catered it would again lead to a flop show, which would definitely impact the industry to a large extent.

CONCLUSION

To conclude the law relating to the e-Invoicing have been created very cleverly in the manner which would definitely provide an assistance to the Government to track the fake Invoicing and malpractices continuously going in the country. This new system will certainty control the menace of large number of GST Frauds, but to really control GST frauds the Government should reduce the minimum turnover limit for applicability of E-invoice to ₹ 50 Crores of a supplier for adopting e-Invoice as was originally envisaged.

If e-Invoicing system is properly implemented it would definitely assist the industry for automation in filling of GST Returns and in E-Way Bill generation, it will be a great benefit to a fully complied and honest taxpayer. It shall certainly be a better tracking system in place for the Government. The economy of the country has full right to avail each and every benefit of automation and Information Technology. But at the same time emphasis need to be placed over its proper execution and transition as industry would definitely not ready for another set of technical glitches & consequential difficulties.