What Is E-Invoicing and Why It Is Important to Be in ERP Software
The transportation of products from one place to another can be done by the filing of ‘e-Way Bills’ on the GST portal. Similarly, the GST council has decided to implement a system of e-Invoicing, which will apply to businesses that have a yearly turnover of more than 20 crores.
Though, e-invoicing doesn’t imply the generation of invoices on the GST portal.
Before we proceed further let’s find out what is E-invoicing.
What is E-invoicing?
Electric invoicing (e-invoicing) is a robust system created by (the GST network) GSTN; it helps GSTN authenticate the invoices for further use on the common GST portal. This electronic invoicing system assigns a unique identification number against every invoice, and this thing gets done by the Invoice Registration Portal (IRP), managed by the GST Network (GSTN).
Also, all the invoice details get automatically transferred to both the portals, the GST portal, and an e-way bill portal in real-time. And it has eliminated the manual process of filing GSTR-1 returns and generation of part-A of the e-way bills.
To whom e-invoicing is applicable?
|Phase||Applicable to taxpayers having aggregate turnover of more than||Applicable date||Notification number|
|1||Rs 500 crore||01.10.2020||61/2020 – Central Tax and 70/2020 – Central Tax|
|2||Rs 100 crore||01.01.2021||88/2020 – Central Tax|
|3||Rs 50 crore||01.04.2021||5/2021 – Central Tax|
|4||Rs 20 crore||01.04.2022||1/2022 – Central Tax|
What is the process of getting an e-invoice?
Below we have mentioned the process of generating or raising an e-invoice.
- The taxpayer has to make sure that they are using the configured ERP system that can generate e-invoices like VedaERP. The taxpayer can contact the ERP software service provider and ask them whether the software supports e-invoicing or not. If not, then ask them to incorporate the standard set for e-invoicing, i.e., e-invoice schema (standards).
- There are two options for IRN generation for any taxpayer:
- First a direct API integration, but for this, the computer’s IP address should be whitelisted on the e-invoice portal.
- Second, you can use a bulk generation tool like VedaERP to bulk upload invoices. This tool can generate a JSON file that can easily be uploaded to the GST’s e-invoicing portal to generate IRNs in bulk.
- After that, the taxpayer must have to generate invoices on a regular basis from that software. They must provide all the mandatory details such as billing name and address, GSTN of the supplier, transaction value, item rate, GST rate applicable, tax amount, etc.
- Once you have selected the option, you can now raise the invoice on the respective ERP software or billing software. Then you have to upload the details of the invoice, especially mandatory fields, onto the IRP using the JSON file, or use the direct API method or via an application service provider. This IRN works as the central registrar for e-invoicing and its authentication. You can use the other modes to interact with IRP as well, such as SMS-based and mobile app-based.
- The IRN can validate all the vital details of B2B invoices. Also, it checks for any duplications or errors and then generates an invoice reference number for reference. An IRN is generated based on four parameters: Seller GSTIN, invoice number, FY in YYYY-YY, and document type (INV/DN/CN).
- The invoice reference number (IRN) gets generated by IRP and it also digitally signs and creates a QR code in Output JSON for the supplier. On the other side, the seller of the supply gets notified of the e-invoice generation through email.
- Then, IRP sends the verified payload to the GST portal for return filing. Also, if there is inter-state transportation of goods, details get forward to the e-way bill portal as well. GSTR-1 gets automatically filled.
How businesses are getting benefited from e-invoicing?
There are some appealing benefits of e-invoicing, mentioned below:
- Using e-invoicing, the major issue is the chance of errors getting reduced.
- Creates interoperability, which means when an e-invoice gets generated from one software that can be read by another software as well. This decreases the chances of errors.
- E-invoices allow tracking invoices in real-time, which the supplier generates.
- Automates the tax filing process, and automatically populates the relevant details in the various returns. Mainly it helps in generating the A part of e-way bills.
- Input Tax Credit (ITC) is available faster.
- As all required details are provided to the tax authorities, there is a minimum possibility of audits/surveys by the tax authorities.
Has This Curd Tax Fraud in India?
- By implementing e-invoicing, tex authorities get all the vital details of the transaction as they track it in real-time.
- Chances for manipulating the invoices are eliminated because the invoice is generated before carrying out a transaction.
- It helps to claim only genuine input tax credit; all invoices need to be generated through the GST portal. The chances of the fake invoice are reduced because input credit can match the output details, so it becomes easy for GSTN to track fake tax credit claims.
Get VedaERP Software with E-Invoicing Features Inbuilt
VedaERP is an affordable ERP software developed by SAN Softwares, it helps businesses run their day-to-day operations seamlessly. Along with e-invoicing, this software has to offer plenty of other features. Below we have added all the important features that an ERP software must have.
Features of VedaERP:
- Lead Management
- Purchase Management
- Project Management
- API Integration
- Sales Management
- Contract Management
- CTI Integration
- GST Report
- Client Rates
- Leave Management
- Bar Coding
- Dynamic Form