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A few days ago the GST council has declared that any kind of business transaction will require the filling of the E-Way bills that are present in the GST portal. This has increased the popularity … Read More
A few days ago the GST council has declared that any kind of business transaction will require the filling of the E-Way bills that are present in the GST portal. This has increased the popularity of e-invoicing systems among the business community that handles the transportation of various goods. This new standardized format must be accepted by ERP providers. Business organizations need to fully understand the importance of e-invoicing and how to prepare them using e invoicing software. This software has in-built modes such as Excel and API integrations that allow users to generate e-invoice using customized print templates.
The idea of e-invoicing: An e-invoicing is a digital document that is created in the seller-s e-invoicing system or any online web-based platform for helping the government to keep an eye on the authenticity of the business. There are many e-invoice software containing unique formats to generate formation. This creates a problem for the government as it requires a lot of effort to analyze these formats.
Hence the invoices must be formed using the common structures and guidelines before being uploaded in the GST portal. The standardized format of e-invoicing allows various GST ecosystems to co-operate with each other and establishes a better process of conformity.
How e-invoicing can block tax invasion?: When the supplier will generate the e-invoice and submit it in the common GST portal, Tax authorities will get automatic notifications related to it. Thus they can have access to the overall real-time transactions that are taking place. The process of invoice generation occurs before the transactions get executed. Thus the chances of manipulating invoices get nullified. Also, many fraud organizations are experts at creating fake GST invoices. This issue will get solved as the invoices that are created through the GST portal with proper input tax credit can only be claimed as real invoices. Comparison between input credit and tax details makes the process of tracking fake taxes simpler.
Criteria for application of e-invoicing: GST council has executed the implication of e-invoicing in a phased manner. This was essential as every business organizations require a certain time to adapt to these changes. Since 1st October 2020 e-invoicing was implied to those businesses whose overall turnover has crossed the limit of 500 crores as prescribed by the department of Central Tax. Those businesses that have achieved a turnover of more than 100 crores were allowed to adapt to e-invoicing since 1st January 2021. From 1st April 2021, E-invoice will reach all kinds of business deals and organizations.
The relation between QR Code and E-invoice: IRP has developed and distributed digitally signed QR codes each containing distinctive IRN with complete invoice data. The overall structure of the QR for any kind of document remains constant. Only the content carrying the values and invoice differs from each other.
How e-invoice is advantageous to the business world?: With the generation of e-invoices payments can be made faster and the number of payment issues caused by keying errors gets reduced. In addition to this, there are more benefits of depending on an e-invoice system. Let us see them in-depth:
Conclusion: The establishment of the e-invoice system will help to deliver better streamlining of the GST process. It brings transparency and reduces human efforts in the creation of business data.