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After the successful implementation of 3 phases of e-invoicing in India, here comes the phase 4.
Now, the Central Government has mandated e-invoicing for businesses having more than Rs 20 Cr. This will be effective from 1st April 2022, as issued by the Central Board of Indirect Taxes and Customs.
It means that the threshold for e-invoicing under Goods and Services Tax (GST) has been now lowered to INR20 crore from the previously approved limit of INR50 crore.
E-invoicing is a standardized and approved format of the invoice, which should be digitally generated and can be read by a machine. It is a manner in which B2B (Business-to-Business), exports, and their notes invoices are electronically validated by GSTN (Goods and Services Tax Network).
The Invoice Registration Portal (IRP), which is administered by the GSTN, will issue an Invoice Reference Number (IRN) to each invoice under the electronic invoicing system.
Following are the benefits of e-Invoicing:
Auto-reporting of invoices into GST returns
Auto-generation of the e-way bill
Standardization in the processes
Inter-operability among transacting parties
Improvisation in payment cycles
Lowering of processing costs
Refining overall business competence
As per the e-Invoicing system, only business-to-business (B2B) transactions having the turnover range of Rs.20 crore to Rs.50 crore in any financial year between 2017-18 to 2021-22 will be covered.
An exemption has been given to all financial foundations in the banking and insurance industries along with the non-banking financial businesses, products, and passenger transportation agencies, business units operating in distinct financial zones.
It has the following significant impact and changes on the business processes:
Companies need to segregate the transactions subjected to B2B and B2C.
No manual updating of B2B supplies is required, as they get auto-populated, while B2C supplies need to be updated manually.
The most significant changes that companies may face are real-time generation and IRN capture. So, companies must decide with what they want to comply with, among 3 options:
GST Suvidha Provider (GSP)
For a seamless generation of Invoice Reference Number (IRN), businesses having turnover 20 Cr and more must integrate their systems with the government’s Invoice Registration Portal (IRP).
If the accounting software is not accommodated with the changes complying with the e-invoice guidelines and an e-invoice is not generated, then it has severe consequences like:
For Non-compliant businesses, the penalty is Rs.10,000 or an amount equivalent to the tax evaded (higher).
For inaccurate invoicing, the penalty is up to Rs.25,000.
For delay in the generation of e-Invoices, there will be no auto filing of GST returns, no claim to ITC, etc.
For the goods transported without a valid invoice, there can be a detainment from the department for goods as well as the vehicle.
In this case, the businesses must look for a compliance solution, like Webtel’s e-Invoice, for error-free and seamless e-Invoicing to avoid any inconvenience.
Since the implementation of e-Invoicing in India, Webtel has been India's leading ASP-GSP player in the industry. Webtel’s e-Invoicing solution is known for its fastest and aﬀordable e-Invoicing implementation regardless of what your scale is or what ERP platform you use for seamless integration, Bulk Generation of IRN, Data Validation, Data Security, and much more.