In the past few years, various countries across the globe have adopted E-Invoicing (Electronic Invoicing) to manage and regulate the documentation of B2B (business to business) invoices for distinct taxation purposes.
To join the league with these countries, the GST Council of India has also recently adopted and permitted the use of this e-invoicing process, which commenced from the 1st of January 2020. This e-invoicing process will be mandatory for all Indian companies that hold an inclusive turnover of Rs 500 crores and above.Whether you are a business owner or a salaried employee, the process of e-invoicing has a number of benefits. The blog attempts to find answers to all your questions and queries about the same. Read further to know how.
What is E-invoicing under GST?
Electronic Invoicing is a method in which all the B2B (business to business) invoices generated by various invoice accounting software will be electronically verified by the Goods and Service Tax Network (GSTN). There are a lot of delusions concerning E-invoice amongst various business owners.
For example, they think that this introduction of e-invoicing by the GST council implies that every invoice will be generated from the central platform of the tax department, and they further think that this unification will cause an unnecessary constraint on how the trade is carried out.
However, this is just a myth, and there is no such constraint on business owners. Under this E-Invoice process, a unique identification or verification number will be assigned against each business invoice by the IRP (Invoice Registration Portal) governed by the GSTN.
All this e-invoice data will be transferred from this platform to both the GST (Goods and Service Tax) portal and the e-way bill platform in real-time. Hence, it will eliminate the requirement for hand-operated data entry at the time of filing GSTR-1 return and the creation of part-A of the e-way (Electronic Way)bills, as the Invoice Registration Portal directly assigns the information to the GST platform.
What was the need for e-invoice under the GST Law?
Before the introduction of this e-invoice process under the GST law, business owners used to generate invoices with the help of a distinct cloud invoice software. Due to this adoption of distinct software, there was no uniformity in the invoicing process.
However, after this introduction of the e-invoice process, all the invoicing methods got systematised and regulated. This regulation will be accomplished by importing data with the assistance of a JSON or an excel tool or through API (Application programming interface) integration, either directly or with the aid of a GSP (GST Suvidha Provider).
The invoice data will effortlessly flow to GSTR-1 filing and for the e-way bill creation too. This e-Invoicing applied from 1st October 2020 to all businesses whose annual turnover exceeds Rs 500 crore in three preceding financial years.
Moreover, this e-invoice process further became applicable from 1st January 2021 to businesses whose annual turnover exceeds Rs 100 crore in three preceding financial years.
How can these E-Invoice assist businesses?
Mentioned below are some of the major advantages of E-Invoicing for businesses.
- E-invoice fixes and fills a significant gap in information reconciliation under the GST to overcome mismatch mistakes.
- E-invoices generated on one cloud invoice software can be interpreted by another, enabling interoperability and assisting in subdue data entry mistakes.
- Synchronised tracking of invoices generated by the vendor is authorised by e-invoice.
Hence, it can be inferred that the e-invoice process holds many advantages for the business owners as it can easily systematize their invoicing process. However, many business owners often get perplexed about which cloud invoice software to use for e-invoicing.
Looking for an E-Invoicing software to perform your online invoicing process? Ankpal is your one-stop solution. We are an invoice accounting software company providing end-to-end e-invoicing solutions to our clients. Contact us at 63588 58915 know more.