Online GST Registration Process in IndiaGST, or Goods and Service Tax, has replaced various other forms of indirect taxes and has simplified India’s taxation system. If you are a trader, business person, or entity having a turnover more than the defined limit, you need to register for GST. If you are a taxable person, you cannot carry on your business activities without a GST registration.

What is GST Registration?

GST or Goods and Service Tax is an indirect tax levied on the supply of goods and services. It has replaced the old VAT and service tax system. If you want to avail all the GST benefits (Goods and Service Tax), you need to register for GST.

Any business whose turnover is more than Rs 40 lakhs (Rs 10 lakhs for hill state and North Eastern states) needs to register as a taxable person under the GST law.

Some businesses must register for GST. If the business carries without registering under the GST, it will be considered an offense, and heavy penalties will apply to that business. You will also not avail of any benefits mentioned under the GST law if you do not register.

How Much Time is Required in the GST Registration Process?

It usually takes 2-6 working days to complete the GST registration process.

Who Needs to Register for GST?

Following people needs to register for the GST –

GST Registration Process

You can register online for the GST through the portal maintained by the Central Govt. of India. Here are the steps that you need to follow for the new GST registration –

GST Registration – Required Documents 

You need the following documents for the GST registration –

You can submit any of the following as address proof for your GST registration process –

You need to submit a canceled cheque or the scanned copy of the first page of the company’s account’s passbook.

Once you submit all the documents, a GST personnel in charge of the verification process will verify all the details you provided. After reviewing all the details, the person will either approve your application or reject your application based on incomplete information or an error in the application process. At this stage, if you want, you can validate the information until the clearance.

What If You Do Not Register or Pay GST?

If a taxable person does not register and pay GST, the person needs to pay a penalty of 10% of the taxable amount, subject to a minimum of Rs 10,000.

In case the person has registered and deliberately withholds the GST payment, the person needs to pay a penalty of 100% on the taxable amount.

Conclusion

There are various online GST billing software that can help you to simplify your GST filing process. One such software is Imprezz. With imprezz, you can create high-quality GST e-invoices in just a few clicks.

We offer 14 days of free GST billing software trail for small businesses in India. Login to get started!

The GST Payment of TaxThe payment of Goods and Services Tax (GST) online has made the process of tax payment easy and transparent. As a registered taxpayer of GST, you have access to three electronic ledgers, i.e. electronic liability ledger, electronic cash ledger, and electronic credit ledger.

The first step for making the payment of GST is to generate an online GST payment challan. It is generated in the Form GST PMT – 06.

Why is Timely GST Payment so Important?

It is important to pay GST on time to avoid additional interest. According to Section 50 of the CGST Act, the interest on delayed payment will start accruing from the day the payment is due. This applies to both types of payments, skipped and not paid in full.

The interest on delayed payments is determined by the government and is not more than 18%.

If there is an undue or excess reduction in output tax liability or excess claim of ITC, the interest rate will be more but not more than 24%.

Understanding the Payment Process under GST

1.   Electronic Tax Liability Register

The tax liability register records all the liability of the person that includes –

Here’s the process that needs to be followed by the taxpayer –

2.   Electronic Cash Ledger

An electronic cash ledger includes any amount that is paid by the taxpayer. The amount in a cash ledger can be used for the payment towards interest, tax, penalty, indirect tax, or any other amount that is due under the acts/rules.

For the payment, the taxpayers need to generate an online challan using form GST PMT – 06. It will be valid for 15 days, and the payment can be made from any of the following modes –

3.   Electronic Credit Ledger

The electronic credit ledger includes all the claims of ITC that are self-attested by the taxpayer. The amount in this ledger can only be used for the payment towards the output tax.

No entry can be made directly in the electronic credit ledger, no matter what situation.

What are Common Offenses Under GST?

The GST law has clearly defined all the offenses and penalties that will be imposed in each condition or scenario. All the business owners, tax professionals, and chartered accountants need to pay attention to the details because even a small mistake can cost a lot or may lead to severe consequences.

Under the GST law, there are 21 Offenses. They are as follows –

1.   Fake/Wrong Invoices

2.   Fraud

3.   Tax Evasion

4.   Supply/Transport of Goods

5.   Others

If in case, any offenses are committed, the person needs to pay the penalty.

What Does the GST Penalty Rule Mean?

A penalty is a punishment that is imposed by the law if you fail to perform your duty or commit an offense. It can be both civil or criminal and is also known as corporal or pecuniary.

There are various GST penalty regulations that are mentioned in the law. Here are three rules –

The Penalty in Case of Fraud

In the case of fraud, the offender needs to pay the penalty amount of tax deducted, i.e., 100% penalty. For all the 21 offenses mentioned in the law, the penalty for fraud will be a minimum of Rs 10,000. (100% penalty)

Helping Someone to Commit Fraud Under GST

Apart from the taxable person, any person who does the following will have to pay the penalty. (Up to Rs 25,000)

Anyone who helps the taxable person to commit fraud, under the law.

Receives/obtains the goods and services (with full knowledge) that violate GST law.

Fails to issue an invoice or vouch any invoice appearing in the books, according to the law.

Do not appear before tax authority even after receiving the summons.

Offenses Related to Tax Evasion

If in case, the offender does not pay tax or evades, the penalty will be 10% of the tax amount due. (minimum of Rs 10,000)

If the offender has deliberately done the fraud, the penalty will go up to 100% of the tax amount. If it is a non-fraud case, the penalty will be 10% of the tax amount.

General Penalty

For any offense that is not specifically mentioned in the GST law, the offender will be liable to pay a penalty exceeding Rs/- 25,000.

Conclusion

Generally, the rules and regulations of penalty are the same in all laws. Timely GST payment is exceptionally crucial for the compliance of a business. It is essential to avoid instances of penalty or delayed payments. After considering various measures and depending on the severity of the offense, penalties are accordingly imposed. You need to maintain a proper record and pay GST on time to avoid any problems. You can also use various GST billing software and take help from professionals if required.

We offer 14 days of free GST billing software trail for small businesses in India. Login to get started!

Multi User Live Version

Bengaluru, India, December 23th, 2020 – Accounting is an integral part of business operations. It determines the sustainability and growth of an enterprise. Today, the world is driven by technology; In an era like this, it is crucial for business owners to manage their accounting system wisely. Businesses must focus on building a more substantial accounting base, responsibly looked after by the right professionals doing the right job irrespective of the time, location, or device.

How to build a robust accounting base? Working as a team, sharing business insights allows an enterprise to grow seamlessly. Businesses must focus on collaborating between different departments, bringing both the internal team and external accountants to work together. With superior team coordination, business owners can organize accounting bases through integrated, multiple user login systems.

Does accounting software in India support a multi-user login system? Which Indian accounting software allows data access permission control? Imprezz is the pioneer of accounting software for small businesses in India. It will enable the users to restrict the data access as per the location. It is an all-in-one integrated, multi-user accounting system that allows businesses to manage, edit, or modify their accounting operations.

Imprezz Multi User Support System

Most SME’s in India employs more than one determined staff to handle the accounting tasks. It has increased the demand for multi-user accounting software for businesses. Imprezz is a cloud-based invoicing and billing software that allows at least ten different users to maintain records and business transactions. It will enable each user to modify or delete any accounting data or transactions based on their roles and responsibilities.

The administrators or business owners can control and restrict the data access permissions as per their requirements. Alongside limiting the data access, users also have the privilege to restrict access by IP location. It helps users rest assured by detecting if the data is being accessed by the determined professional from the right location. Imprezz is one of India’s robust accounting systems, enabling businesses to operate remotely, anywhere, anytime. The multi-user feature strives to support small and medium enterprises in India to expand globally in multi-location.

Teamwork & Collaboration

Collaboration is the key to make a difference in the world. Business owners and accountants can now make the best of their team members through collaborating across the departments. Imprezz multi-user accounting software enables real-time financial data sharing that helps run a business efficiently.

Always be a Leader

Imprezz, a multi-user accounting system, enables the user to lead the pack. You can provide specific control to selected individuals who want access to certain parts of your financial data. The unique role-based data-sharing model makes collaboration more comfortable, faster, and secure.

The software’s functions simplify sharing profit and loss statements, general ledger, balance sheets, and trial balance. It streamlines reports by dates, project type, and financial year. The export function enables you to download excel and PDF files in just a few clicks.

Collaboration Across Various Levels of Organization

Giving specific access to your staff, accountants, and investors to operate on different accounting modules amplifies work efficiency. Collaborating across various departments can be done quickly with the multi-user accounting system. For instance, the sales manager can easily upload, share, and track real-time invoices with accountants. Further, it helps accountants stay GST compliant with on-time tax filing and auditing. When required, you can also share access with your financial advisors to ease the process of decision making.

Simplified Ledger Sharing

You no longer need to work on simplifying the confusion concerning ledger sharing. Imprezz enables you to share ledger by providing access to your accounting team or clients. It helps avoid discrepancies caused by different departments of accounting.

Build a Team of Employees

User Roles & Privileges of Imprezz Multi-User Live Version

1.     Administrator

The enterprise administrator is the one who controls the entire software. They handle the logins, configuration of system settings, and other core technical operations concerning the software. They create different user ID’s, assign corresponding duties concerning designated professionals. Controlling the permissions enables the user to access financial data as per roles set by the administrator.

2.   Accountants

Accountants are the ones who handle the integral operations of finance. They will have access to all financial data except for the configuration settings of the software. Otherwise, they are free to access and manage other business operations on the software.

3.   Sales

Sharing business data with the sales team is vital as recording each transaction is the main agenda of using accounting software. Collaborating with the sales department helps record quotations, invoices, and other sales-related documents in real-time.

4.   Sales & Purchase

Most SMEs prefer working with limited employees. In that case, business owners can assign one user to manage both sales and purchase related entries.

Customized Roles

Imprezz allows the user to grant authorization by creating multiple user roles. You can create various roles and customize them as per the business requirements. It makes business accounting simpler and with the right accounting system in place.

Key Features of Multi-User Live-Version

You can organize and streamline all your accounting rules with team coordination by creating multiple user logins. Here are some of the critical features of the multi-user feature launch on Imprezz online billing software.

About Imprezz

Imprezz is one of the leading cloud-based accounting software that has helped several small businesses in India proliferate. It helps manage GST tax filing, data reporting, reconciliation, and various other financial tasks under a single accounting platform. Users can utilize the dashboard to get insights from the overview of the total expenses, income, and key performance indicators.

Imprezz provides cloud access that allows enterprises to work remotely. The inventory management module enables supervisors to view the available stocks, create customized units, import financial data in excel or PDF format. It helps businesses link their bank accounts that allow real-time tracking of cash flow and daily transactions. The software offers a 14 days free trial software program for SME’s in India. Log in to know more!

Media contacts

For India                                         Amit Mundra           0049 2735 776248      info@imprezz.in

GST Billing Software - Purchase Invoice

Modern SMEs rely on automation to stay on top of today’s cut-throat competition. Imprezz is India’s leading GST billing software that offers all-in-one small business accounting solutions for small and medium-sized enterprises. There are various official documents that business issues daily, one of which includes the invoices. Invoicing online is one of the easiest ways to track sales. Invoices are mainly categorized into two, purchase invoice and sales invoice.

A sales invoice is a document issued to the customer as proof of purchase. A purchase invoice in GST is a document issued to a buyer by its seller as a confirmation indicating the goods or services purchased. The usage of the purchase invoices is also slightly different from that of a sales invoices. There are various things a buyer must know about a purchase invoice to pay it. This article is a comprehensive GST invoice guide – Here’s everything you need to know about purchase invoices.

What is an Invoice?

An invoice is either issued on paper as a hard copy or online as a soft copy. It is formulated with various data that includes the supplier’s and buyer’s information, name, registration number (Value Added Tax, Unique Identification Number, Service Tax, etc.). An invoice also contains the details of items purchased, their quantity, tax rates, and taxable amount. It is mandatory to issue invoices as per the standardized invoice format.

What are GST Invoices?

GST invoice is a document issued as per the standardized GST invoice format. It is issued and obtained by taxpayers that acquire the GSTIN. GST invoice contains the tax rates and taxable amount applicable to the intrastate and interstate sales or purchases. There are various tax rates applicable to each type of transaction. CGST and SGST are applicable on the intrastate supplies, and for interstate supply, IGST will apply.

GST Purchase Invoice

A purchase bill with GST or invoice is issued to evaluate the purchase. It is mandatory to mention the GSTIN of both buyer and supplier to obtain the Input Tax Credit. The GST system automatically records the buyer’s account balance once the supplier successfully uploads and files the GST form.

It is essential to understand the difference between the invoice date and invoice due date while formulating a purchase invoice. The invoice date indicates the date on which a purchase invoice was issued. The due date means the scheduled date after which the payment is considered due against the issued invoice.

While generating a purchase invoice, it is also crucial to understand the importance of a serial number. The serial number helps maintain and restrict invoice manipulation. For instance, if an invoice is issued with the serial number INV020, the invoice’s formatting is preserved and limited to that number alone.

What are the Types of Purchase Invoice Issued through GST Billing Software?

Businesses in India and across the world rely on issuing purchase invoices. It helps business operations run smoothly and keeps track of each payment. Purchase invoice templates on Imprezz can be used to issue various types of purchase invoices, namely:

Regardless of the types of invoice businesses need to issue, the customizable invoice templates on Imprezz GST invoicing software are specifically designed to create invoices and issue them. Business owners can edit the template as per their needs and save it to issue professional invoices.

How is Purchase Invoice Different from Purchase Order?

The critical difference between the purchase order and invoice is that a purchase order is a business document containing details of the transaction yet to be completed. A purchase invoice is a document containing the details of the transaction that is already fulfilled. Moreover, a purchase invoice includes the total cost of the goods or services purchased, wherein a purchase order does not.

Contents of a Purchase Invoice – GST Billing Software

There are various fields that a supplier must include in a purchase invoice. Imprezz offers customizable templates that include all the necessary fields of the purchase invoice. Once the data is manually entered, the invoice is ready to be issued in just a few clicks. Some of these elements are mentioned below.

Title – Suppliers must officially label the invoice as “Purchase Invoice.”

Invoice Number – The invoice number is the unique identifier of an invoice purely formulated with digits.

Invoice Date – It is the date on which the purchase invoice is officially issued to the buyer.

Supplier’s Details – It is crucial to mention the person who provides the goods and services. Their name, address, GSTIN, and other important information must be included in the document.

Customer Details – It is the person who purchased the goods or services from the supplier. It is crucial to mention their name, address, GSTIN, and other important information in the document.

Description of the Goods – It is an in-depth description of each item contained in the business transaction.

Quantity and Value – The quantity and amount of each product must be indicated in the purchase invoice.

Currency – Supplier must mention the specific denomination (legal medium of exchange) used in the transaction.

GST Charges – If the supplier has a business registered under the GST, the particular amount must be indicated in the purchase invoice. This way, the purchase invoice becomes valid under GST. Alongside mentioning the GST charges, the supplier must also mention the GST registration number.

The Total Amount Net of GST – The total amount of goods or services rendered is exclusive of the GST.

The Grand Total – It is the value of the transaction as per the applied GST rates.

Creating Purchase Invoices with Imprezz GST Billing Software

Imprezz is the pioneer of accounting software that streamlines the business workflow by simplifying accounting operations. The software primarily assists in the automation of accounting systems that enable business owners to focus on other business operations. The software offers a user-friendly interface that can be easily operated by accounting toddlers. Imprezz is a collection of various features that come in handy. The integration enables small businesses in India to automate and achieve higher organizational goals.

Conclusion

A purchase invoice is a business document that shows the contents concerning the specific transaction. It is vital to ensure that all the necessary fields, invoice date, due date, and serial numbers are accurately laid out in a purchase invoice. Purchase invoice has to be created as per the guidelines suggested by the Indian government.

The time has come for small businesses to update their invoicing procedures. Your invoices need not look basic. With Imprezz GST invoice billing software, you can easily create high-quality, custom invoices in just a few clicks. We offer 14 days of free GST billing software trail for small businesses in India. Login to get started!

Mixed Supply and Composite Supply under GSTThe GST Council of India has incorporated new concept of supply into the tax regime. On certain occasions, a combination of goods or services is provided together. Vendors might do this to attract more customers. At times, specific goods are grouped due to their similarities. Earlier, this mechanism was known as packed goods or services. However, the simultaneous taxable supply is now classified as mixed supply and composite supply under GST.

The composite supply in GST is easy to understand when compared with the Service Tax Laws. Wherein, the mixed supply is a new concept included in the GST. Thus, it is vital to understand the implications of composite supplies versus mixed supplies in today’s GST era. This article is a complete guide on mixed supply and composite supply under GST. Further, the article briefly explains the concept of supply, mixed supply, composite supply, and time of supply under GST.

What is Supply under GST?

As an economic term, supply is defined as the number of resources that a producer, vendor, laborer, firm, or a financial agent supply to the market or directly to another agent in the market. The following supplies are accountable under the new GST returns system.

Whether made business expansion, promotion, or otherwise, import of services are considered accountable under GST. Any other activity that lists under Schedule 1 of Goods and Services Tax (GST) Act 2017 is also included.

The Concept of Mixed Supply and Composite Supply under GST

The GST council has specified individual tax rates for the supply of each type of commodity. It is easier for the vendors supplying specific goods and services to understand and identify the applied GST rates. The GST Council notifies any changes in the GST rates from time to time. However, specific provisions of goods and services are interlinked to each other with no connection. For instance, a vendor might offer installation services with the supply of a washing machine or any other product.

The Goods and Services Tax pre-defines the classifications offered. Therefore, understanding the concept of mixed supply and composite supply under GST is crucial for the unified tax treatment under GST. It helps understand and classify the type of supply that helps determine the ascertained tax rates on supplied goods or services.

What is a Bundled Supply under GST?

A supply is termed as a bundled supply when goods or services are combined. The bundled supply concept is found under the Services Tax Law, where two or more services are mixed.

How to Determine a Naturally Grouped Bundled Supply?

Determining a bundled supply in an ordinary business course depends on the formal practices followed in each industry. Here’s how you can determine the nature of these goods and services.

Naturally Bundled Supply: Type-1

When buyers expect to purchase services under a single package, these packages are treated as naturally bundled supplies. For instance, a firm holding a business conference seeks a combination of hotel services along with auditorium and dining accommodations.

Naturally Bundled Supply: Type-2

When service providers in a particular industry tend to offer a service package, it is also considered a naturally bundled supply. For instance, airlines offer travel and in-flight services together as a combined package.

Naturally Bundled Supply: Type-3

The nature of services supplied in a package also helps determine whether the service is bundled or not. Often, the main service and secondary service are pooled together, making it a naturally bundled service. For instance, five-star hotels offer laundry services for guests residing in the hotel; the room rental is the main service, and the laundry service is secondary.

Naturally Bundled Supply: Other Types

Other indications for the aggregation of services in the normal business context (not an infallible aggregation):

What is a Composite Supply under GST?

A set of goods or services are grouped naturally and supplied with each other in a normal business context, one of which happens to be a principal supply. These goods or services cannot be provided individually. In simpler terms, a composite supply includes goods and services bundled together, entailing the natural necessities. The elements in a composite supply are usually bifurcated as Principle Supply and Dependent Supply.

How to determine a Composite Supply?

The supply of goods or services is treated as a compound supply if it meets the following criteria:

Tax Rates Applicable on a Composite Supply

The tax rate applicable to the principal supply is the tax rate applicable to the entire set of supplies. For instance, the goods are usually transported along with insurance. Under this scenario, the goods supplied, packed materials, transportation, and insurance are a composite supply. Here, insurance and transportation cannot be provided individually without the supply of goods. Thus, goods become a principal supply under GST.

Tax liability on the entire set of supply is the tax rate applicable to the principal goods. If it does not satisfy the second condition, it is considered a mixed supply.

What is a Mixed Supply under GST?

A mixed supply under GST is a combination of individually sold goods or services grouped or manufactured together at a special price. None of the goods or services in a package under a mixed supply are dependent on each other. Under GST, the tax rates applicable to mixed supply will have the highest tax rate. For instance, a festive package sold with food items, candies, cakes, canned sodas, and dry fruits come with a single price. However, each item can also be sold individually. Since the 28% GST rate applies to soft drinks, the same rate applies to the gift box’s main supply.

How to Determine if a Supply is a Mixed Supply?

Difference Between a Mixed Supply and a Composite Supply

Combined supply and mixed supply usually appear to be similar to each other at first glance. Either way, supplied goods or services are packed and sold at a single price. However, here’s how the GST regime differentiates the supplies.

Difference # 1 – Principle Supplies

In a composite supply, vendors can determine the significant part of the supply of goods or services. Wherein, in a mixed supply, neither buyer nor the supplier can determine the principle commodity (although the item with the highest tax rate is treated primarily for taxation).

Difference # 2 – Individually Available Supplies

In a composite supply, selling secondary service or goods separately from the main supply of goods or services does not make sense in an ordinary business course. For instance, it doesn’t make sense if a hotel separately sells towels, shampoos, ironing facilities, and other necessary facilities provided in the hotel room). In a mixed supply, each item grouped can be sold individually in the market. For instance, a grocery package entailing a variety of snacks and drinks can be sold separately.

What is Time of Supply?

Under GST, time of supply can be defined as the point of time when particular goods or services are considered to be supplied. When suppliers know the time of supply, it helps them determine and identify the due dates for the tax payment.

Time of Supply in Case of Composite Supply

The composite supply is treated as a supply of services when the principal supply is a service. For example, airline services that include transportation and food onboard. Provisions concerning the time of supply will apply to the services supplied. Likewise, the supply is treated as a supply of goods when the principal supply is a product. Provisions concerning the time of supply apply to the goods supplied.

Time of Supply in Case of Mixed Supply

A mixed supply is treated as a supply of services when the highest tax rate relates to service. Provisions concerning the time of supply will apply to the supply of the service. Likewise, a mixed supply is treated as a supply of goods when the highest tax rate relates to a product. Provisions concerning the time of supply will apply to the supply of goods.

Conclusion

Given the rolling classification of supplies as mixed supply and combined supply under GST, small businesses in India will need to review all potential packages of goods and services. Taxpayers need to understand composite supply versus mixed supply and its tax implications clearly, thus working towards the desired goal of aggregating goods and services.

Simplify your GST accounting and automate tax calculation. Implement Imprezz invoicing and billing software to comply with the GST regime. Stay ahead in the competitive business world, rid of the tedious manual accounting practices. Save time and work smart by automating financial operations. Focus on other crucial business activities while we take care of your small business accounting.

We offer a 14 days free trial software program for small businesses in India. Login to get started.

GST E-Invoice Part-2

The Goods and Services Tax (GST) e-invoice is a digitally generated invoice for the business transactions recorded on the government portal. The concept of GST e-invoice schema is expected to curb GST tax evasion. The authorities working for GST Council have officially provided a standardized digital billing system for businesses to generate e-invoices for each sale on the GST portal. Modern accounting software has adopted the new e-invoice system by aligning the data access and retrieval as per the standardized e-invoice format.

GST e-invoicing system is applicable for businesses that meet the established threshold limit, the minimum threshold notified by the government. According to the latest notifications, taxpayers and businesses with a certain threshold will receive a Unique Identification Number (UIN) each time they issue an e-invoice. It helps them match the invoices written on sales returns with that of taxes paid for verification.

Imprezz offers the best electronic billing software solution for businesses in India. The program provides seamless integration of API and import and export functions for uploading or downloading Excel sheets. It is an easy-to-use automated accounting system that comes with added value; reconciliation, e-way bills, GST return filing, reports, customizable quotation templates, consolidated electronic invoices, data archiving, etc.

Procedures for Obtaining GST E-Invoice

There are various stages involved in obtaining an e-invoice. Here’s how to create and issue e-invoices as a registered taxpayer.

Step – 1

PEPPOL (Pan-European Public Procurement On-Line) standard is an electronic data interchange protocol designed to simplify the invoicing processes involved from purchase to pay between the government and suppliers. Taxpayers must verify and ensure that their ERP system is reconfigured accordingly. It enables the service providers to integrate the updated e-invoicing standards that instill the mandatory parameters notified by the CBIC.

Step – 2

Registered taxpayers are usually provided with two basic options to generate an (Invoice Reference Number) IRN.

Step – 3

The next step is to create a regular e-invoice that includes all the mandatory fields. For instance, billing name, address, GSTN of the supplier, item rate, transaction value, GST rates applicable, taxable amount, etc.

Step – 4

Once taxpayers finalize one of the options mentioned above, they can create invoices in the ERP or invoicing and billing software. It is crucial to upload the invoice details with all the required fields to the (Invoice Registration Portal) IRP using JSON files. It can be done via a software service provider (either an application or GSP). The IRP is a central registrar for e-invoices and authentication. Taxpayers can also interact with IRP through SMS-based messaging and mobile apps.

Step – 5 

In the next step, the IRP will validate the details uploaded by the taxpayers. Each B2B invoice is verified for duplication and generation of IRN: Supplier’s GSTIN, Invoice Number, and Fiscal Year in YYYY-YY and Document Type (INV / DN / CN).

Step – 6

The portal generates the IRN with a digital signature on the invoice and creates a QR code in the supplier’s output JSON file. In the meantime, suppliers will be informed of e-invoice generation through email (if provided in the invoice).

Step – 7

In the end, IRP sends an approved payload to the GST portal. Authenticated details will be sent to the e-way billing portal (if any). Supplier’s tax forms are automatically completed for the relevant tax period determining the tax liability.

Note: Taxpayers can continue to create invoices with their logo prints on them. The e-invoicing system doesn’t restrict businesses on logo prints; instead, it only obligates them to report invoices in the IRP in an electronic format.

How will GST E-Invoice Curb Tax Evasion?

The government has implemented the new GST system aiming to curb tax evasion. According to the new system, e-invoices must be compulsorily generated through the GST portal. It allows the tax authorities to access transactions executed in real-time quickly. Since invoices are now created before the transaction, it reduces the scope for manipulating the invoices. Thus, Input Tax Credit can only be claimed originally as ITC is combined with the production tax details. All-in-all, it becomes easier for GSTN to track fake tax credit claims.

Mandatory Fields of an E-Invoice

Taxpayers must adhere to the GST invoice rules while drafting an e-invoice. It is crucial to implement an ideal invoicing and billing software like Imprezz, that has adapted the system and policies that each industry type or sector follows in India. Some invoice details are mandatory, while the others are optional. The e-invoicing system allows freedom to choose the relevant fields to be filled in an e-invoice. Mandatory fields under e-way bills are now merged with e-invoice, such as type of secondary supply.

According to the latest announcement on e-invoice format content notified on 30th July 2020, taxpayers must focus on various gist of e-invoicing under GST.

Benefits of E-Invoicing under GST

The new e-invoicing system allows B2B invoices to be authenticated electronically by the GSTN. The new system ensures the standardization of invoices, and thus, ERP suppliers must update their layouts accordingly. Here are some of the crucial benefits of e-invoicing under GST.

Drawbacks of the GST E-Invoice System

The main objective of implementing an e-invoicing system was to curb tax evasion. The new system facilitates the B2B invoices and not B2C invoices. The maximum number of frauds occurs from B2C invoices as there is no involvement of ITC. Therefore, the system should emphasize allowing customers to report incompatible invoices that help reduce tax evasion at its source.

The capacity to upload invoices is based on the data uploaded on the GSTR-1 Form during the last two years. Thus, GSTN needs to be equipped with the latest technology to minimize the downtime that adversely affects GST compliance. Despite the several updates on the GST portal, the archive option is still missing in the IRP. Taxpayers yet do not have permission to store the invoice data for more than 24 hours.

Scope of Mandatory E-Invoicing in India

In India, mandatory e-invoicing will come into force from 1st January 2021 for Indian taxpayers with an annual turnover exceeding rupees 100 crores. Taxpayers and businesses are expected to prepare quickly to take full control of solutions that facilitate the generation and issuance of e-invoices. In early October, the Finance Minister, Ajay Bhushan Pandey, announced that e-invoicing through IRP would be available for businesses and taxpayers starting from 1st January 2021, explaining the goal of making e-invoices mandatory for B2B transactions as of 1st April 2021.

The transactions must the carried out through GST e-invoices on the IRP when the government mandates the B2B e-invoices in India. The announcement was made officially on 10th November 2020 when the CBIC confirmed the businesses’ eligibility to implement e-invoice authentication from 1st January 2021. The mandate GST rule in India is currently applicable to businesses and taxpayers with an annual turnover of more than rupees 500 crores. Banks, teleservice providers, financial institutions, and armed forces are exempt from issuing e-invoices.

Conclusion

E-invoice is the exchange of an integrated electronically formatted document between a supplier and a recipient. The conventional billing processes included heavy paperwork and tedious manual data entry tasks that are intense and prone to error. E-invoicing under GST focuses on reducing the invoicing costs and processing life cycles for businesses. Before implementing an e-invoicing system for your firm, you need to make certain crucial decisions. Do you want to manage accounting tasks internally or work with a third-party e-invoicing solution provider? What e-invoicing solution best suits your business requirements?

Is your existing invoicing solution software repeatedly failing to offer the best for your business? Imprezz is the leading B2B accounting solution service, provider. The e-invoicing model offers integration that enables suppliers and customers to achieve GST compliance as per the specified e-invoicing GST laws and rules under a single platform. Process invoicing data without investing in expensive software or employee resources. We offer a 14 days free trial software program for small businesses in India. Log in to get started with the new GST electronic invoice system.