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India’s e-Invoice: a path-breaking initiative

The path-breaking e-invoice initiative which completed one month on the 31 October is poised to revolutionise the way businesses interact with each other. The e-invoice system, the game-changer for the GST system, was launched on 1 October 2020 for businesses with an aggregated turnover of more than Rs. 500 Crores (INR 5 billion)  in a financial year.

It is perceived as another milestone in India’s efforts to enhancing the ease-of-doing-business in the country. The data captured by the Invoice Registration Portal (IRN) will flow seamlessly to GSTR1 return of the tax-payer in GST Common Portal (gst.gov.in), reducing the compliance burden.

Over 49.5 million e-invoices have been generated on the National Informatics Centre (NIC) portal by 27,400 tax-payers within the first month of the introduction of the e-Invoice system. Further, an additional 64 million e-way bills were generated during October 2020 – the highest in a month during two and half years of journey of e-way bill system.

Starting with 8.4 million e-invoices after it was launched (1 October 2020), the usage gradually picked up. The last day of October saw a generation of as many as 3.5 million e-invoices in a single day. This coupled with the generation of 64.1 million e-way bills during October  2020 well-establishes the robustness of the system.

From the feedback received from tax-payers, the response of the system is good and the generation of IRNs is hassle-free. Proactive communication by NIC Help desk with tax-payers has helped them in finetuning their systems to reduce the errors.

Currently, there are three modes of generations of IRNs in the NIC system. First is the direct API interface of the ERP system of tax-payer with the NIC system. The second is the API interface of the ERP system of the tax-payer through GSP with the NIC system. The last is using the offline tool for bulk uploading of invoices and generating IRNs. About 15% of the tax-payers use the offline tool for the IRN generations while 85% directly integrate them through API.

Presently, the generation of IRN using API interface is allowed for businesses with aggregate turnover more than Rs 500 crores (INR 5 billion), GSPs and shortlisted ERPs. Now, direct access will be extended to the tax-payers using the E-way Bill API interface. Big businesses will enable their suppliers and clients to use their ERP/SAP systems for the generation of invoices. With this is mind, it was decided to facilitate them to enable their suppliers and clients to use their integration channels.

The government is planning to reduce the aggregate turnover cut off to Rs 100 Crores (INR 1 billion) for the generation of IRN by the tax-payers in the short term. NIC has already enabled the API and offline tool based trial sites for this tax bracket. They have also upgraded their infrastructure to handle the generation of e-invoices from this broadened pool.

Keeping the needs of smaller tax-payers in view who need to prepare 5-10 B2B invoices in a day, the NIC is in the process of developing an offline Excel-based IRN preparation and IRN printing tool. This would allow the group to enter invoice details, prepare files to upload on NIC IRN portal, download the IRN with QR code and print the e-invoice with QR code.

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