What is E-Invoice?
Companies across industries use different varieties of accounting software to capture data and create a digital invoice. The generated invoices being verified and authenticated electronically by GSTN (Goods and Service Tax Network) for further use (like return preparation, E-way bill creation, etc) is known as E-Invoicing.
What is it not?
It does not mean the generation of invoices from the central portal or tax department as it is a tedious process and limits the freedom of trade to a point of dismay. It is merely the submission of already generated invoices being submitted to the GST portal for authentication.
Different accounting software creates different invoices with no standard procedure or format. These formats can not be understood by the GST system, hence it was not possible to transmit the data from the accounting software to the GST system. The need for standardizing the preparation of the invoices that can be understood by the GST system led to the introduction of the E-Invoice concept.
How is it different from what was practiced earlier?
The objective of E-Invoice
The objective behind introducing e-invoice is to effectively address the expectations and concerns of all the stakeholders (private and government business entities) by leveraging the use of ITC (Input Tax Credit). Other benefits include:
- To enable universal machine reading of E-Invoices generated by different accounting software.
- To eliminate the tedious process of verifying the invoice compliance at the end of the return period.
- To set a standard procedure or scheme or theme to the preparation of E-Invoice that is easy for all accounting software to adopt.
- To eliminate discrepancies in the filing of invoices and to enhance transparency in the process.
Who is supposed to submit the E-Invoice?
This is for the main stakeholders of the e-invoice system who are the registered taxpayers under GST. Companies with an annual turnover of more than $13.5 million (100cr Indian Rupees) are mandated to submit their e-invoice to the government (GST Panel) for their authentication.
From when is it required to submit E-Invoice?
For those companies making less than $13.5 million per annum, the law comes into effect from the 1st of Oct, 2020 while for those companies making above the said value, the effective date is from 1st Jan, 2021.
Benefits of the E-Invoice system
The e-invoice system, if implemented successfully, will help tax compliance authorities to target unscrupulous taxpayers and minimize the number of fraud cases as the tax authorities will have access to the relevant financial data in real-time. Other benefits include:
Also by making the process digital, the transparency is increased and discrepancies are reduced.
How Tactive integrates e-invoice in its construction ERP software?
Tactive in a recent endeavor with one of its customers has integrated the e-invoice platform with the GST portal for instant transmission of data from the customer base to the GST panel. The scenario is quite simple to understand. The data is fed into the ERP which is then transmitted automatically to the GST portal.
The data registered and transmitted can be verified on both ends. As the data transmission and the preparation of e-invoice are as per standard norms of the government, it naturally becomes easy for another software with access to the data to read and interpret it. Thus qualifying the key component of the e-invoice which is universal accessibility/readability.
This ensures the immediate response to the legal and regulatory standards set or changed by the government from time to time. The feedback from the good customer emphasis the role of reliability in data transmission and the zero error in the registered data that is sent to the GST panel as there is the provision to cross verify the data from both sides.
All safety protocols are taken into consideration like no data can be entered without approval from the respective stakeholders, the date of entry, time, etc are recorded for future reference. This makes the entire e-invoicing process transparent unlike the traditional way of sending the e-invoice without a proper standard full of mistakes and omissions that were later rejected by the GST panel which only added to chaos and wastage of man-hours.
Tactive is a dynamic web and mobile-based construction ERP software that is configurable as per the requirements of the customer’s ever-changing demands. Tactive Construction ERP is designed to give the end-users the versatility to accommodate all kinds of government policies and other legal compliances to ensure a smooth flow of operations.