E-invoicing under GST for business-to-business (B2B) transactions began with a very high threshold on October 1, 2020 when enterprises with a turnover of more than 500 crore were required to create e-invoices. Businesses with a turnover of more than Rs 100 crore were required to issue e-invoices from January 1st, 2021 in the second phase. Firms with a turnover of more than Rs 50 crore were required to create e-invoices from April 1, 2021 in the third phase. In the fourth phase, enterprises having a turnover of Rs 20 crore or more were able to issue e-invoices beginning April 1, 2022. Businesses with a yearly turnover of Rs 10 crore or more are mandated to use e-invoicing for B2B transactions from October 1, 2022 in the fifth phase.
Applicability of taxpayers having a turnover of
1st January, 2021
1st, April, 2021
1st April, 2022
1st October, 2022
Businesses with an annual turnover of over 5 crore will have to move to e-invoicing under Goods and Services Tax(GST) from January 1, 2023. It is also said that all firms with a turnover of Rs 1 crore or above must start preparing for e-invoices by the next fiscal year.
Electronic invoicing or e-invoicing in GST, refers to the system that authenticates B2B invoices electronically by the Goods and Service Tax Network. Under this process, all B2B and export invoices created by a firm must be registered with the government system, namely the Invoice Registration Portal (IRP), in order to get a unique identification number for each invoice known as the Invoice Reference Number (IRN). Along with IRN, the IRP will produce a digitally signed QR code with selected invoice details and digitally sign the provided invoice data.
Thus, an e-invoice is a document that has an IRN connected to it as well as a digitally signed QR code written on it.
The following documents must be uploaded by the taxpayer to the IRP system-
1. Invoice by supplier
2. Debit note by a supplier
3. Credit Note by a supplier
4. Any additional documents mandated by law to be uploaded to the IRP system by the taxpayer.
There are prominent benefits of e-invoicing for all types of businesses such as-
1. The possibility of invoice fraud, human mistakes, duplication, oversight, etc. is decreased when transactions are more transparent. In the time required for cross-verification, organizations may save numerous hours and resources.
2. Once you've uploaded all invoices, the B2B details are automatically recorded in the GSTR-1 return.
3. It improves tax administration efficiency and eliminates the risk of false invoicing.
4. E-invoicing will result in a solid approach for dealing with tax fraud on a higher level, resulting in less tax frauds in the near future.
5. The difficulties associated with input credit verification have greatly reduced. It is now possible because when you share an invoice, you submit the same data to the tax agency and the buyer.
6. With cloud-based software, you can access your invoicing system from anywhere, even while on the go. If you need to travel for a meeting with a client, you will be able to send them an invoice immediately. You will also be able to work from home or send a quick invoice on the weekend with minimal disruption to your day.
7. Generation of E-way bills becomes effortless using data filled under the E-Invoicing system.
E-invoicing or electronic billing is a process in which transactional documents such as purchase orders, payment terms, etc., are sent digitally among relevant parties. It is gradually being mandated by governments in their efforts to track and ensure indirect taxes and customs regulations. The initiative aims to bring more and more businesses into the e-invoicing fold and allow for more automotive GST returns, therefore reducing any fraudulent ITC claims.
Businesses are required to adhere to a standardized e-invoice format, which is completely informative. Companies must choose to use the appropriate technology solution in order to survive in a cutthroat market. A reliable e-invoicing solution may not only make the entire process run smoothly, but would also speed up the billing process and help in retaining records.
On Swipe we can easily make e-invoices in seconds. Swipe is an easy-to-use free GST billing, invoicing and payment software for small and medium sized enterprises. It offers a number of features, ranging from creating invoices in 10 seconds, generating purchase orders, creating e-way bills, export invoices and so on.
Here's a sample format of e-invoice of Swipe.
Government policy makes it simple for small firms to access conventional credit sources through online financing. Large businesses that purchase their raw materials from these companies must, however, ensure seller compliance to avoid delays in IT claims. Business billing or ERP systems can eventually communicate with one another because of e-invoicing across India. It reduces human mistakes and increases transparency.
The GSTR-1 return preparation will undergo significant adjustments. To avoid discrepancies, they must reconcile auto-filled e-invoices with those recorded in the books of accounts before filing the GSTR-1. Due to a lack of required technological support, many small enterprises and multinational corporations find these actions subject to multinational duplication and mistakes.
The implementation of e-invoicing will be beneficial for MSMEs and small enterprises‚ expansion and increase of their customer base. They have options to conduct business with big companies that choose e-invoicing-compliant suppliers. These relevant enterprises can also take advantage of a quicker distribution of short-term invoice-based credit facilities using their government-verified invoices.