What is E-Invoicing under GST & Benefits of GST Ready ERP
Before going to E-invoicing, let us know some quick facts about GST. What is GST ? GST means Goods and Service Tax, the tax levied on all goods and services sold within the country. In India, the GST declaration took effect from 1st July 2017 onwards. Before this date, the tax system in our country was so complicated that after the GST announcement there is a standard tax rate fixed on each product/service. Thus with proper GST, the businesses can see more production or export with less charges.
‘Electronic Invoicing’ known as E-invoice is a process in which all the B2B invoices are generated electronically in a specified format and uploaded in the government portal for authentication. Once it is verified then a unique Invoice Reference Number (IRN) is generated for each invoice. Along with this, you get a digital signed copy of the invoice with a QR code.
To whom this is applicable ?
Electronic Invoicing will be applicable to all the businesses who are registered under GST. E-Invoicing has been effective from 1st October 2020 to all businesses whose turnover exceeds Rs.500 crore limit in any of the previous financial years from 2017-18 to 2019-20. Further from 1st Jan 2021, it is even applicable to businesses exceeding Rs.100 crore turnover limit for the above mentioned years.
How E-invoicing helps your business ?
- Real-time tracking of invoices prepared by the supplier is enabled by e-invoice.
- Automation of the tax return filing process – the relevant details of the invoices would be auto-populated in the various returns
- Faster availability of genuine input tax credit
- Lesser possibility of audits/surveys by the tax authorities since the information they require is available at a transaction level
- The hectic paperwork gets reduced as it takes care of all the tax job and expanding a business gets easier being GST registered
Benefits of E-invoicing GST Ready ERP :
- The e-invoicing system is completely understood by the developers and hence the ERP software contains means to validate the data to ensure that it is as per the e-invoice schema.
- When your business software is preloaded with standard templates for GST filing, all you need to do is add the relevant information to file tax or invest in intelligent tax savings options in just a few clicks.
- The ERP does all the hard work for you. It calculates the GST as per the applicable rate on goods or services and allows you to generate invoices adding the tax with the price.
- The ERP software provides a way to link the invoices generated to the accounts payable and accounts receivable module to ensure good debtors management and timely settlement of invoices.
- The ERP takes care of accounting, inventory, payroll, statutory compliance, e-filing, job work and all other manufacturing operations thus helping the organization to promote their business and parallelly comply with GST.