The government has made it mandatory for businesses to generate e-invoices for B2B (business to business) sales from 1st October 2020. The main objective of this is to plug GST (Goods and Services Tax) leakages and curb the menace of fake invoices. In this article, we will take you through all you need to know about e-invoicing under GST.
What is E-invoicing under GST?
E-invoicing is the issuance of an invoice in an electronic format. The invoice is generate from a GST-compliant software or ERP (enterprise resource planning) system. The details of the invoice are then upload to the IRP (Invoice Registration Portal) by the supplier.
The buyer can then download the invoice from the IRP using the IRN (Invoice Reference Number). The e-invoicing system is inter-connect with the GSTN (Goods and Services Tax Network) portal. This ensures that the details of the invoice are reflect in the GST return filed by the supplier.
Why is E-invoicing under GST being introduced?
E-invoicing under GST is being introduced to:
– Plug GST leakages: There have been instances of businesses issuing fake invoices to avail of GST benefits. This led to revenue loss for the government. With e-invoicing, businesses will have to generate invoices from a GST-compliant software. This will make it difficult to issue fake invoices.
– Curb the menace of fake invoices: Fake invoices are often used to avail of input tax credit (ITC). This leads to revenue loss for the government. With e-invoicing, businesses will have to generate invoices from a GST-compliant software. This will make it difficult to issue fake invoices.
– Reduce the compliance burden: Businesses will have to generate invoices from a GST-compliant software. This will reduce the compliance burden as businesses will not have to maintain separate records for invoices.
– Bring transparency: E-invoicing will bring transparency in the system as the details of the invoice will be available on the IRP.
– Reduce the cost of compliance: E-invoicing will reduce the cost of compliance as businesses will not have to maintain separate records for invoices.
What are the benefits of E-invoicing under GST?
E-invoicing under GST will benefit businesses in the following ways:
– Reduce the compliance burden: Businesses will have to generate invoices from a GST-compliant software. This will reduce the compliance burden as businesses will not have to maintain separate records for invoices.
– Bring transparency: E-invoicing will bring transparency in the system as the details of the invoice will be available on the IRP.
– Reduce the cost of compliance: E-invoicing will reduce the cost of compliance as businesses will not have to maintain separate records for invoices.
– Improve efficiency: E-invoicing will improve the efficiency of businesses as they will not have to maintain separate records for invoices.
– Promote digitalization: E-invoicing will promote the digitalization of businesses as they will have to generate invoices from a GST-compliant software.
Who is required to generate E-invoices under GST?
Businesses with a turnover of more than Rs. 500 crore will have to generate e-invoices for B2B (business to business) sales from 1st October 2020. The threshold for businesses with a turnover of less than Rs. 500 crore will be notified later.
What are the penalties for not generating E-invoices under GST?
The penalties for not generating e-invoices are as follows:
– A late fee of Rs. 100 per day will be levied for each day of delay.
– A penalty of Rs. 250 will be levied for each invoice.
– A penalty of Rs. 10,000 will be levied for each return.
What is the format of E-invoices under GST?
E-invoices under GST will have to be generated in the prescribed format. The format will have to be approved by the GST Council.
How to generate E-invoices under GST?
E-invoices under GST can be generate using a GST-compliant software or ERP (enterprise resource planning) system. The details of the invoice are then upload to the IRP (Invoice Registration Portal) by the supplier.
The buyer can then download the invoice from the IRP using the IRN (Invoice Reference Number). The e-invoicing system is inter-connect with the GSTN (Goods and Services Tax Network) portal. This ensures that the details of the invoice are reflect in the GST return filed by the supplier.
How to register for E-invoicing under GST?
Businesses can register for e-invoicing on the GSTN (Goods and Services Tax Network) portal.
What are the documents required for E-invoicing under GST?
The following documents are required for e-invoicing:
– GST registration certificate
– PAN (permanent account number)
– Address proof
– Invoice template
– Digital signature
How to file E-invoices under GST?
E-invoices under GST can be file on the GSTN (Goods and Services Tax Network) portal.
What is the due date for filing E-invoices under GST?
The due date for filing e-invoices is the 10th of the month following the month of sale.
What is e-invoicing?
E-invoicing is the process of issuing and receiving invoices electronically. It is a paperless way of doing business transactions and is slowly becoming the norm in many industries. The Indian government has mandated the use of e-invoicing for businesses with a turnover of more to 500 crore from 1st January 2020. This is seen as a move to boost digital transactions in the country and to make the GST compliance process easier.
How does e-invoicing work?
E-invoicing works by generating an invoice in an electronic format and sending it to the buyer through a secure network. The buyer can then make the payment electronically. The whole process is paperless and can be done online.
What are the benefits of e-invoicing?
There are many benefits of e-invoicing, both for businesses and for the government.
For businesses, e-invoicing saves time and money. It is a more efficient way of doing business transactions and can help businesses to reduce their carbon footprint. E-invoicing is also more secure than paper invoicing, as it reduces the risk of fraud.
For the government, e-invoicing will help to boost digital transactions and to improve GST compliance. It will also help the government to track invoices and to detect and prevent fraud.
What are the requirements for e-invoicing?
In order to generate e-invoices, businesses will need to have an Invoice Reference Number (IRN) and a QR code. The IRN is a unique number that is generate for each invoice. The QR code is a 2D barcode that contains the invoice information.
businesses will also need to have a GST Identification Number (GSTIN). businesses with a turnover of more than 500 crore will need to generate e-invoices from 1st January 2020.
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What is the process for e-invoicing?
The process for e-invoicing is as follows:
- businesses will generate an invoice in an electronic format
- businesses will send the invoice to the buyer through a secure network
- the buyer will make the payment electronically
- the whole process is paperless and can be done online
Conclusion:
E-invoicing is the process of issuing and receiving invoices electronically. It is a paperless way of doing business transactions and is slowly becoming the norm in many industries. The Indian government has mandated the use of e-invoicing for businesses with a turnover of more to 500 crore from 1st January 2020. This is seen as a move to boost digital transactions in the country and to make the GST compliance process easier.
There are many benefits of e-invoicing, both for businesses and for the government. For businesses, e-invoicing saves time and money. It is a more efficient way of doing business transactions and can help businesses to reduce their carbon footprint. E-invoicing is also more secure than paper invoicing, as it reduces the risk of fraud.
In order to generate e-invoices, businesses will need to have an Invoice Reference Number (IRN) and a QR code. The IRN is a unique number that is generate for each invoice. The QR code is a 2D barcode that contains the invoice information. businesses will also need to have a GST Identification Number (GSTIN). businesses with a turnover of more than 500 crore will need to generate e-invoices from 1st January 2020.
E-invoicing under GST is a step in the right direction to plug GST leakages and curb the menace of fake invoices. It will also reduce the compliance burden for businesses and promote the digitalization of businesses.
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