August 12, 2020
E-invoicing is considered to be more of a business restructuring than a tax restructuring. In the initial phases, the new practice is applied only to certain taxpayers having invoice value or turnover denominations exceeding certain specified limits. Slowly and steadily, the rest of the taxpayers will also fall under the scrutiny of E-invoicing in a subsequent fashion. The implementation of GST is going to eradicate to a large extend the occurrence of errors which directly results in hassle-free returns.
Here is a brief description of everything that you need to know about E-invoicing…
The 37th GST council on September 20, 2019 has sanctioned the incorporation of E-invoicing (Electronic-invoicing) in the B2B transaction system starting from January 1, 2020.
After putting into practice the new system of E-invoicing, all the sales and purchase invoices shall be replaced. These invoices will assume the new ‘electronic’ format through the government screened E-invoice PAN- India.
The GST council and the Government of India believe that this can bottleneck tax evasion since there is real-time record of every GST returns with the E-invoice details. There will be less possibility for tax avoidance as invoices get generated prior to transaction. Since all invoices are generated through GST portal, only those input tax credit that are genuine can be claimed. This implies that GSTN can track every fake tax credit claims.
In this new method of E-invoicing, there will be standard template of GST invoice. The GST network will generate a unique invoice number, also called unique Invoice Reference Number (IRN). The IRN is calculated based on an organization’s GSTIN i.e. GST registration number.
In order to smoothly execute further E-invoicing activities, the government has nominated registrars to preside the same. The registrars will be responsible for issuing the E-invoice for the taxpayer who will either be a seller or a buyer. Any registered taxpayer can raise the request to the registrar through online, API, SMS, mobile app or even offline tool. This will hence be a proof to the registrar regarding the area coverage of the registered tax person.
By the introduction of online method like E-invoicing, the India Government believes that there will be an enhancement in digital payments through QR codes. The government mandates the use of a QR code generated in the E-invoice registration portal. This QR code can be digitally validated and signed by the appointed registrar, which will generate another QR code. This QR code can be printed by the registrar and taken as proof by the taxpayer to be sent as an invoice number.
While not every business need to come under GST E-invoicing, this factor is subjected to specified turnover limits of companies. If the turnover of companies goes beyond a set limit, then there arises the necessity of registering and implementing the GST E-invoicing for that particular business.
The induction of E-invoicing in the system eases the task of everyone with routes of everyone and everything being part of the system.
Would you like to implement e-invoices for your accounting and business purposes? Get to know Accoxi today. Connect with us and know about all the features offered by Accoxi to enhance your business.
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