After being delayed twice in 2020, compulsory E-invoicing under the GST (goods and services tax) was finally brought into place on the 1st of October, 2020. GST registration in India is straightforward and can be initiated with the required documents and legal compliance. Before going forward, it is crucial to choose a suitable business form for your business wherein many entrepreneurs to prefer to get the online registration of private limited company in India.
While this new invoice authentication system will be only applicable to B2B (business to business) transactions by companies whose turnover goes beyond Rs, five hundred crores, as of now, E-invoicing has received an affirmative response from everyone. More than 65 Lacs invoice registration or invoice reference numbers were issued on the official portal during the first phase of implementation. The new system is supposed to resolve the various unwanted issues while submitting GST returns, reduce the turnaround for verification of E-way bills, and keep close eyes on tax evasion.
E-invoicing will only apply to businesses coming under a particular turnover threshold to provide enough leeway to the new system and work out any initial hiccups. But as time passes, more businesses would get familiarised with the new E-invoicing system; even the threshold would be reduced so that more businesses can come under the horizon of E-invoicing.
Recommended reading: How to find the best Commercial Loan Broker?
E-invoicing would be implemented in a phased manner; the authorities will make the E-invoicing mandatory for businesses whose turnover goes beyond Rs. One hundred crores from 1st of January, 2021. Regardless of turnover, all the B2B transactions would be obliged to adopt E-invoicing starting 1st of April, 2020. Professionals have also been suggesting that all the B2C transactions be brought under the horizon of E-invoicing. Hence, how the E-voicing would alter the future of GST compliance? This blog would help you to find out the same.
Ajay Bhushan Pandey (financial secretary) has said in a statement to the media that E-invoicing will replace the currently existing E-way bill system. The movement of goods is being sanctioned if a company possesses a simple GST invoice and an E-way bill for orders that are on par with the conditions. The CBIC has released a notification that having physical copies of tax invoice would no longer be compulsory for companies who have embraced the E-invoicing. If the company has issued IRN (invoice reference number) for goods in question, and a QR code or both are acceptable documents for verifying the goods that are being moved.
Recommended reading: Benefits Of Taking Personal Loans To Buy Your Dream Car
According to the records, India has faced a total loss worth of Rs. Forty-eight thousand crores because of the tax evasion happened between April to December 2018. Compulsory E-invoicing makes sure that every single B2B GST invoice issued by the business regulates the standardized schema so that it could be processed with ease via buttressing systems and electronically authenticates the validity of the GST invoice by the issuance of IRN. This IRN has to be stated wholly submitting GST returns, enabling a particular portion of details in the GST returns forms to be auto-populated, thereby curtailing the issues related to fake invoicing.
E-invoicing would remarkably minimize the manual paperwork post GST registration in India enables speedy authentication of invoices. Digital code like QR or quick response code for B2C transaction would reduce the turnaround time to verify the goods at revenue checkpoints, minimizing the losses related to delayed deliveries. Since each GST invoice has to be uploaded on the official portal for electronic authentication, invoice’s details would be auto-populated while submitting GST returns.
As more and more tax operations are being digitalized, tax authorities will have to manage a large amount of data. This data can be utilized to improve and analyze the GST practices. Due to the standardized schema, this data would be structured; tax authorities can detect and wipe out malpractices and spread GST compliance.
Recommended reading: Why You Should Use a Home Loan EMI Calculator
In the initial phase, the government is being clement of E-invoicing and has also issued E-invoicing’s prolonged adaptation. E-invoicing for businesses with a lower threshold is not going to come soon. More time has been given to businesses to upgrade their systems, embrace technology and get prepared for E-invoicing under the GST. Companies that do not abide by the guideline will have to face the penalty, and their GST invoice will be invalided. Afterwards, they would not be able to send any goods. This can potentially disrupt their supply chain and payment disruption as well from the customers.
Recommended reading: How a Personal Loan Helpful in Every Stage of Your Life?
E-invoicing provides many advantages, such as error-free data, reduced cases of data reconciliation, improved efficiency, speedy process of input tax credit claims, enhanced transparency, tax reduction and compliance risk. It can reduce carbon footprints as well. To conclude, E-invoicing would be compulsory for all the businesses in the foreseeable future. Hence, the sooner you embrace it, the better it is going to be for your business. Prepare yourself to adopt the E-invoicing by upgrading internal systems, suitable technology and integrating the business systems to save time and efforts.
The processes necessary for humans to maintain proper growth and development and their metabolism are…
The boomers, the millennials and now Gen Z! As time passes over, new generations start…
With a bit of creativity and some forward-thinking, there's no reason why everyone shouldn't be…
By using this form you agree with the storage and handling of your data by this website.Read More