All about e-Invoicing

The GST Council in their 35th Council Meeting made the decision of implementing e Invoicing under GST for large scale Businesses in India from April 2020 however, the date of implementation has been extended to October 2020. Businesses have already started bracing themselves for the new System.

e-Invoicing is going to be mandatory for all Businesses with an aggregate annual turnover of Rs. 100 Crore & above. Hence the Businesses must prepare in-advance to be compliant with it.

E Invoicing under GST is a process of reporting & authenticating an already generated B2B Invoice to a Unified Portal, the Invoice Registration Portal.

The B2B Invoice must be generated by the taxpayer in a specified SCHEMA format given by the GST Council, from their Billing Systems as they do now.

The Taxpayer shall then report these Invoices to the IRP & get them authenticated. Post-authentication the IRP shall generate an IRN (Invoice Reference Number) & a QR Code for the Invoice.

The IRN & QR code is proof that the Invoices are authentic & valid. The IRP shall reject Invoices that are missing any mandatory fields or have wrong values.

e-Invoicing is currently applicable only to B2B Invoices. But, Businesses having an Annual Turnover of Rs. 500 Crores & above must also generate QR codes for their B2C Invoices.

Other than the B2B taxpayers must also report their B2G (Business to Government) Invoices, Credit Notes, Debit Notes, Reverse Charge Invoices & Export Invoices.

Objective behind e-invoicing

The most basic agenda of the Government with e Invoicing GST is to make the Process digitally more accurate to curb tax evasion through Fake Invoices & Wrong ITC claiming.

Additionally, making the Invoicing process electronic is beneficial for the taxpayer as well. It eliminates the tedious process of invoice maintenance, compilation & manually filing their Returns.

As per the council’s plan, the e-Invoices so registered are going to auto-populate the data that the taxpayer can use to file their GST Returns.

The e-Invoice data shall be available real-time & all under one roof for multiple uses, such as Part-A of the e-Way Bill shall be auto-populated, data for GST Filing shall be auto-populated, the data shall be available for the Tax Authorities to access at any time given.

Yet another objective of Electronic Invoices is, since the Invoices are going to be prepared in a specified format, it can be read & interpreted in any billing software, discharging the paper invoices out.

Influence of e-invoicing on businesses

Looking at the short term effects of the new process, one might think of multiple challenges that may befall the Businesses. The Businesses may have to make N numbers of efforts & amendments to their current system to comply with the new System.

Businesses have to prepare their ERPs & Billing Software & modify them as per the e Invoicing System. The ERPs should be able to create the Invoices in the mentioned Schema Format.

This may cost Businesses a high amount of Working Capital. apart from the monetary effects, e-Invoicing shall also require the Businesses to train their concerned staff to comply with the System.

Segregation of the Invoices, Vendors & Transactions, depending on which one falls under e-Invoicing & which falls under manual Invoicing.

To say, B2B Invoices fall under e-Invoicing but B2C invoices fall under manual invoicing. Similarly, for GST Return filing, the e-Invoice data shall be auto-populated, but the taxpayer may have to file the manual invoices manually.

In the short run, it totally depends on the businesses, as to how they modify their existing systems to comply with e-Invoices. But in the long run, it has various advantages for Businesses.

Businesses will be relieved from most of the manual process, of Invoice maintenance, compilation in month ends & the Return Filing hassle.

Since the process shall become automated Businesses will have to focus less on overall GST compliance. Also, as the details shall be available on the unified portal at real-time for the access of authorities it would help Businesses in claiming accurate & correct ITC.

Automation of the process tends to eliminate human errors & make further processes of GST filing error-free & accurate. Overall in the longer-term e Invoicing brings a win-win situation for Businesses in GST & compliance.

Accurate Invoice data management will also be helpful for businesses to track the growth & Cashflow of the Business.

E-invoice system – Heading towards digital transformation

With the Digital India moto comes the digitalization of the Country from its very core. The digitalization of the Taxation Domain is a major step in the process.

After the digitalization of the Taxes & introduction to GST (to be digitally filed mostly), it is only fair to digitally upgrade its provisions. e-Invoices by now are accepted Globally & many countries have adopted it in their Systems.

The introduction of Electronic Invoices in India is a massive step & change for both Businesses as well as for the Tax Authorities. Both parties shall benefit from the New System.

Digitalization of a major part of paper Invoices will help businesses combat human errors. Invoicing & Return Filing becomes more accurate & automated for what its worth.

Digitalization also makes the process more transparent & simplifies Compliance. Accurate Filing & increased Compliance will help Businesses enhance their revenue generation & save working Capital.

For the Government & the Tax Authorities, transparency in the Business transactions will help track the tax evasion. e-Invoicing will lower the possibilities of bogus Invoices & e-Way Bills and will stop Businesses from claiming inaccurate & fraudulent ITC.

Electronic Invoices help the Government rule out the Compliant & the Defaulter Taxpayers & give the Tax Authorities a clear and deep vision into the Businesses on a basic or micro level.

E-invoice Future in India

The Future of e-Invoicing in India is a relative matter. How e-Invoicing shall affect the Businesses or if it is going to be a successful scheme or not, is totally dependent on the Government & the Businesses.

The way Businesses adapt to the New Rule, & how they make changes in their current working style, will decide if e-Invoicing shall be successful as a Scheme or not.

Similarly, the Government initiatives to make the e-Invoice system better is expected. The Government has launched various schemes in the past, but few out of them were successful or went as per the plan.

Due to superficial plannings & average Technological Infrastructure, many of the Government’s initiatives & rules have become huge yet shallow words, that do not comply with the practical world.

There are still people out there, who have problems with the current GST System, Taxpayers feel the need for improvement even in the current system which is quite vague & not up to the mark.

Anything, if the e-Invoicing System is being implemented the Government must build a detailed, robust & user-friendly interface & infrastructure to meet all the user requirements.

If the Government succeeds in making e Invoicing an error-free & smart System, the effects of it shall be drastic both on the Business & the Government.

E Invoicing under GST is capable of taming tax evasion up to a very high extent. If implemented successfully, it is likely that India would be able to reduce Tax evasion to a massive extent.

Businesses would become more compliant & Business transactions would become more transparent & crystal clear for the Tax Authorities.

With a technologically standardized leap in the Business process, aspects like, e-commerce, the authenticity of Businesses, reduction of paper invoices, adaptation to digitalization & technologies shall also be encouraged.

E-invoice to make your business stand in competition

In order to make the best out of e Invoicing GST, it is essential for Businesses to adhere to a wise strategy. Businesses must start preparing for the e-Invoice System in advance.

It is important for Businesses to build a robust integration mechanism, to benefit themselves the most from the e-Invoice System.

In this Businesses can again take the help of technology. There is the option of APIs & GSPs. Through APIs, Businesses can integrate their Billing Systems with the GST system & make the process easier.

One such API provider is GSTHero. GSTHero is a GST Suvidha Provider authorized by the Government of India. It provides the most relevant & prompt Software solutions for rapidly changing GST Trends.

GSTHero provides Integration and software plug-ins between ERP & IRPs. So that the client can perform the e-Invoice related operation easier & quicker from the ERP itself without having to pay multiple visits to the IRP & the tediousness of generating & handling JSON Files.

It eliminates any further human entries that may cause errors in Invoice maintenance & filing. The user can generate their e-Invoices -IRN & QR code within a second in 1 click.

Advantages of GSTHero Software Solutions- Integration & Plug-ins

1. Saves Time & efforts by eliminating multiple visits to IRP
2. Elimination of the extra efforts of JSON File handling
3. Eliminate Human Entry errors-Automated Process
4. Robust Software- can handle volume & pressure.
5. 100% Data security & ISO Certified. Authorized by the Government of India
6. High Capacity to bend according to the changing GST Trends.
7. Easy to integrate & user-friendly interface. The user can perform the e-Invoice operations such as generating, editing, canceling, etc, in fewer & quick steps.
8. Prompt after-sales support & Training by dedicated experts.
9. High accuracy in e-Invoicing leads to a better Filing & Reconciliation which helps the User to claim accurate ITC.
10. Bulk Operation Facility for e-Invoicing
11. Auto-data filing into the GSTR & e-Way Bill data.

GSTHero API provider helps Businesses make Compliance with the e-Invoice System & make the most out of e-Invoicing.

About the Author– GSTHero– Making GST Simple! GSTHero is the best GST filing, e-Way Bill Generation & E Invoicing Software in India. GSTHero is a government authorized GST Suvidha Provider. Both Businesses and Tax Practitioners can file GSTR 1, GSTR 3B, GSTR 9 and GSTR 9C with all supporting reports. 1 Click Auto Reconciliation & report-matching feature helps you in claiming up to 100% ITC and finds your GST Defaulting Suppliers. GSTR2A vs GSTR-3B, GSTR-1 vs GSTR-3B, ‘GSTR-1, GSTR-2A & GSTR-3B’ annual report matching is also provided by GSTHero.

GSTHero ERP Plugins provide 1 Click e-Way Bill & E-Invoice, Generation, Operation & Printing from your own ERP like Tally, SAP, Marg, Busy, Microsoft Dynamics, Oracle & others itself with high data security.