Electronic invoicing under GST, known as e-Invoicing, is a way businesses can create invoices electronically. It is similar to how GST-registered businesses use electronic waybills when moving goods. Some specific GST-registered businesses are required to generate e-invoices for their transactions with other businesses (B2B).
E-Invoice, also known as Electronic Invoicing, is a system where all B2B invoices are electronically uploaded and verified on a specific portal. After successful verification, a unique Invoice Reference Number (IRN) is generated for each invoice by the IRP(Invoice Registration Portal). Additionally, each invoice is digitally signed and equipped with a QR code. This entire procedure is referred to as e-invoicing under GST.
Benefits Of GST E-Invoicing
GST (goods and services tax) e-invoicing minimizes the possibility of evasion of tax because all transactions are reported in real time, and the same is available for examination by the tax authorities. As the invoices get verified prior to uploading them, it reduces the chances of fraud.
By introducing the e-invoicing mechanism, the process of compliance is greatly simplified as it is a standard format that every supplier needs to provide. Incorrect GST details, HSN codes, or tax rates are no longer an issue for businesses — the system takes care of that!
- Faster Processing of GST Return
As an e-invoicing system automatically fills up GST returns, it helps businesses handle their GST filings in a more streamlined manner. Also, the integration with GSTN facilitates accurate data transfer, which ultimately minimizes the time spent on filing returns and claiming input tax credits (ITC).
The e-invoicing will lead to higher transparency in the GST system. Invoices can be accessed in real-time by tax authorities and businesses, enabling better visibility into transactions and streamlined auditing processes.
Paperwork, storage, and administrative costs are significantly reduced by generating invoices electronically, as there is no need for documentation in this process. It can also help to minimize human errors associated with manual data entry.
- Better Integration with Accounting Program
Top GST E-Invoicing Company states that with e-invoicing, businesses are able to connect their accounting and ERP systems with the GSTN platform. This allows for seamless data exchange between both, with less manual work and reduced risk of errors.
- GST E-invoicing makes the job of tax filing easier
1. GST E-Invoicing Taxation: E-invoicing under GST is applicable to both goods and services. Some fundamental principles of taxation under GST E-Invoicing are as follows:
2. GST Rates: An e-invoice displays the applicable GST (CGST, SGST, or IGST) for every transaction. That means businesses must make sure the correct tax rate is applied based on the sale of the item or service.
3. Taxable Value:Taxable value is injected for calculation of GST E-invoicing makes sure that the taxable value is entered correctly and the tax amount is calculated accurately.
Process Of GST E-Invoicing
There is a specific workflow that is followed for e-invoicing to validate and report transactions:
- Creation of E-Invoice: The seller creates an e-invoice from their accounting or billing software. The system should generate the normal format under the GSTN standard format, where the GSTIN of the seller, buyer, invoice number, invoice date, and goods details/services, respectively, are compulsory fields.
- Intimation to GST Portal: Once the e-invoice is generated, the e-invoice will be sent to the GST Portal for validation. It cross-verifies the information with the GST database for correctness.
- IRN and QR Code Generation: If the invoice passes the validation checks, an Invoice Reference Number (IRN) and QR code are generated and returned to the taxpayer. IRN acts as evidence of the transaction being authenticated by GSTN, and the QR code is a tool that helps in direct access to the invoice details.
- Sending to Buyers and Suppliers: The e-invoice is sent to the buyer and supplier for record keeping. Both parties receive notification confirming the successful creation of the invoice as well.
- Moreover, the anticipating processes of bill payments help in making settlements while harmonizing invoice integration powered by e-invoices with GST returns like GSTR-1. Hence, with this, there will be no manual data entries, so the chance of mistakes while filling the GST return will decrease.
Documents Required By GST E-Invoicing Company In India
Therefore, for the successful implementation of GST e-invoicing, businesses must prepare the following documents for creating and submitting invoices:
- GST Registration Certificate: A GSTIN certificate for the business, ensuring that it is registered under the GST.
- Business Information: Business legal name, address, and contact information along with GSTIN to be mentioned in e-invoice
- Invoice Details: Information related to the goods or services being sold, including descriptions, quantity, and price.
- HSN/SAC Codes: HSN (Harmonized System of Nomenclature) code for goods and SAC (Services Accounting Code) for services need to be mentioned in the invoice to indicate the nature of products and services.
- GST Rates: You are required to mention the correct applicable GST rate (5%/12%/18%/28%) for each item or service in the e-invoice.
- Digital Signature:An e-signature or digital signature may be required for e-invoice verification.
- Buyer Details: Particulars regarding the buyer, including GSTIN and other related details, specifically if a person is also registered under GST.
- IRN (Invoice Reference Number): This is generated by the GST system after validating the invoice.
Procedure-
- GST Portal Sign Up: Businesses have to register for e-invoicing on the GST portal. They should have their GSTIN connected with their business account.
- Software Preparation: Get in touch with best GST online billing company in India that supports e-invoice generation. Several GST e-invoicing providers in India provide this integration service as per the applicable GST portal.
- E-Invoice Generation: The business generates the e-invoice in the software by feeding all the required information—GSTIN, HSN/SAC codes, transaction details, etc.
- GST Portal Validation: The invoice is uploaded to the GST portal for validation. Then the system will verify the invoice is accurate.
- Notification message of IRN and QR Code generation: If the invoice is validated, the IRN (Invoice Reference Number) and QR code will be generated. The business can then use this IRN for processing and tax filing, etc.
- The generated e-invoice with IRN and QR code get sent to the buyer for records.
- This enables the user to automate their GST filing as the e-invoice gets auto-crafted against the GSTR-1 and nestled data for filing the GST return. Services Plus, the best E-invoicing service agency suggests, this process removes the need for manual entry and thus makes the entire tax filing process smoother.
Proprietorship Registration