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Know All About GST E-Invoice: Its Technical Aspects & Benefits, Effects
Know All About GST E-Invoice: Its Technical Aspects & Benefits, Effects

August 25, 2021

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E-invoice became available as an option from January 2020. But from April 2020, it became mandatory for all taxpayers. Now, as it has been implemented for all of us, we should now use it in the right way in business. The taxpayer is given access to the sandbox for testing and verification before the product is made available for production or actual use. The evolution of e-invoicing is the high tax evasion in the system that the government has noticed and in the present system has done to remove and track it through e-invoicing. The government will have an audit trail of all transactions and will be able to track the transactions with e-challan. There are many benefits of e-invoicing.

E-invoice

  • low-cost invoice
  • Getting the invoice to the supplier in less time
  • Shipping invoice for customers is free or available at minimal cost (no courier charges).
  • less paper use
  • E-invoice data to allow generation of e-way bills automatically
  • Allowing seamless filing of returns by avoiding duplicate data entry and reconciliation issues
  • Enabling Digital Tax Administration

 

Contrary to the rollout of GST, which required taxpayers to make any changes to their business processes and their IT Systems, e-invoice implementation is much more straightforward. It is more time-consuming and requires less money. For taxpayers with a turnover of more than Rs 500 crores, the sandbox to the e-invoice will be available starting February 2020. It will also be available for taxpayers with gross revenue exceeding Rs 100 Crores.

The tax invoice is still required to be generated from the existing ERP/Accounting/Billing system. Still, the data has to be transmitted to the IRP (Invoice Registration Portal ) to validate the data. Once validated, an IRN (Invoice Reference Number) will be generated and sent back to the taxpayer.

 

These are the things to consider when implementing an electronic invoice.

 Requirements – Functional

In the 35th GST Council Meeting, it was proposed that e-invoice be used. The same is done in the 37th GST Council Meeting. It is notified that the wide-ranging Notification No. 70/2019 – Central Tax, 13 Dec 2019, that all taxpayers with an aggregate turnover of more than Rs 100 crores per financial year will have to submit an e-invoice.

Register person whose total turnover for a financial year exceeds one Hundred Crores. This class of registered persons will prepare invoices in terms of sub-rule 4 of rule 48. These invoices shall be in respect of supply goods or services to registered persons.

The notification clearly shows that all taxpayers must issue an e-invoice in the case of B2B transactions (Business to Business) for the supply of goods and services, or both.

It is usual for GST provisions to say that the turnover occurred during the previous year. However, this notification uses the phrase "In a fiscal year." Is the taxpayer required to issue the same at the beginning of the year, the date it crosses, or the invoice that triggers the threshold limit? This is a decision that the taxpayers must make, and they should act accordingly.

A QR code must be issued with a cross-reference for payment in B2C transactions. This is required for taxpayers earning more than Rs 500 crores. This is also in comprehensive Notification No. 72/2019 – Central Tax, 13 Dec 2019. This means that for any transaction related to B2C, the invoice must be issued with a QR Code.

This notification notifies that any invoice issued by a registered individual whose total turnover in a financial calendar exceeds five hundred million rupees to an unregistered entity (from now on referred to as "B2C invoice") shall have Quick Response (QRcode:

Suppose that a registered person makes the Dynamic Quick Response (QR) code available to the recipient via a digital display. In that case, such B2C invoice issued from such registered person, which contains a cross-reference of payment using a Dynamic Quick Response(QR) code, shall be considered to have a Quick Response code.

This means that existing retail billing systems will need to be modified. This will affect all franchise stores and retail supermarket chains. The impact on the same has to be considered. The QR code has to be generated from the ERP/Accounting/Billing solution directly, or the invoice information must be transmitted to the e-invoice portal and caused?


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Shubham Sharma
Marketing Manager

Shubham Sharma working in ERP software firm (SWIL) focusing on accounting software, GST software for Small and Medium Retail, Pharma wholesale and distribution.

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