The ideology of e-invoicing for businesses is to help them reconcile the data in a more streamlined manner without risking the accuracy of the data. With its adoption, businesses can expect to attain interoperability within their operations. Furthermore, the details associated with the e-invoices can also be linked to be added automatically over the tax return forms or e-way bills, ensuring easy filing of taxes.
But, as this new invoicing trend is being adopted by various businesses, the rules and regulations to it have also seen significant changes. So, if you are generating electrical bills in this digital era, be a bit more concerned about staying updated with the latest e-invoice rules & regulations associated with this flexibility. This shall help you comply with the authority regulations and stay legally right while raising invoices.
As of today, the current invoicing rule, as set effective from 1st August 2023, is that the GST e-invoice applicability turnover limit is now reduced from Rs. 20 crores to Rs. 5 crores. It means that e-invoice generation is now mandatory for all taxpayers who have an annual turnover of more than Rs. 5 crores in almost any year from 2017-18 onwards.
A] What Large Companies (>5 Cr) Must Do To Comply With The New E-Invoice Rules?
Irrespective of whether you are new to e-invoicing or have been using it for quite some time, let’s give you a heads-up with what the new August 1, 2023 e-invoice rules have for the business owners, especially for the ones who have a turnover of more than Rs. 5 crores.
Being specific to the well-established businesses who are earning above Rs. 5 crores worth of revenue, here are a few things that you must do in order to comply with the new rules for e-invoice:
1. Register On The Invoice Registration Portal (IRP)
All first-time individuals should register themselves over the official portal of IRP. Visit the official IRP portal launched by NIC and give your phone and GSTIN number, alongside the name and other basic details, to complete your IRP registration.
2. Generate E-Invoices For All B2b And B2g Supplies
If you are a business that has a turnover of more than Rs. 5 crores, then you are liable for filing e-invoices. You must generate and upload all of the B2B or B2G invoices over the IRP portal.
3. Upload E-Invoices To The IRP And Obtain An Invoice Reference Number (IRN)
Once you have uploaded the e-invoices onto the IRP portal, it will run automatic authentication of the details and data within. Following that, the file will be returned to you with IRN and a QR code, which will be signed digitally.
4. Issue E-Invoices To Customers With A QR Code
You can then use your business management software to link it with the IRP portal and add the QR code and IRN number onto the e-invoice easily. Now, it is ready to be sent to the customers for requesting your payments.
5. Retain E-Invoices For A Period Of 8 Years
Remember, you have the liberty to retain your e-invoices for a total period of eight years. Till then, it will be stored within the archive of the IRP portal. Retaining the invoice has a longer time limit, but the e-invoice cancellation rules allow you to withdraw the submission within 24 hours at max.
As it is mandatory for you to adapt to the latest rules, it is still considered important for you to get an insight into the last set of regulations proposed in October 2022 to understand what factors have changed in this newly announced rule.
B] GST E-Invoicing Implementation Dates
To help you better understand the e-invoicing implementation dates, with respect to the specific rule announcement dates are as follows:
|Annual Turnover||Dates of Mandatory E-Invoice Implementation|
|Companies with a turnover of more than Rs. 500 Crores||1st October 2020|
|Companies with a turnover of more than Rs. 100 Crores||1st January 2021|
|Companies with a turnover of more than Rs. 50 crores||1st April 2021|
|Companies with a turnover of more than Rs. 10 crores||1st October 2022|
|Companies with a turnover of more than Rs. 5 crores||1st August 2023|
This table indicates that the GST e-invoicing mandate was already implemented for large companies with a turnover of more than Rs. 500 crores. At present, you needn’t ask the question, ‘Is e-invoicing mandatory for a 5 crore turnover?’. It is because, after the August 2023 rule, the companies with a turnover of Rs. 5 crores are also brought to light for mandatorily implementing e-invoicing facilities over the IRP portal.
C] How To Prepare For E-Invoicing?
Here are a few steps associated with the e-invoice guidelines that you can take note of while you prepare one:
1. Choose An E-Invoicing Solution That Meets Your Business Needs
Look out for an e-invoicing solution that has a good interface to count on alongside the utmost security measures. There should be a scope for customisations in your e-invoicing solution.
2. Integrate Your E-Invoicing Solution With Your Erp System
Once you have chosen your e-invoicing solution, you must now consider integrating it with your ERP system. This would help you identify the errors and rectify them in your invoice before it is sent to the IRP portal for authentication.
3. Train Your Employees On How To Generate And Issue E-Invoices
The next big thing you must do is train all your employees on how they can speed up the e-invoice process associated with generating and issuing them. With the right training, you won’t have to overlook the invoices to detect flaws and mistakes, which increases the workload.
4. Test Your E-Invoicing System Thoroughly Before Going Live
Run trial runs on your e-invoicing system to determine if it works feasibly well before you go live with it over the IRP portal.
D] Benefits Of E-Invoicing For Large Companies
Now that you know who should issue an e-invoice after this new rule, it is time to move forward and discuss the perks of it. Some of the benefits associated with e-invoicing, meant for large companies, are:
1. Improved Efficiency And Productivity
With the use of e-invoicing, you will be able to avoid all types of unnecessary steps that you adopted in the past for paper-based invoicing. Both you and your customers will be able to save time with the use of online e-invoicing software, such as Tally Prime.
2. Reduced Costs
As you won’t use paper for printing your invoices, you are saving a lot of money on both your printing and posting fees. You won’t have to hire any specific employee to post the invoices to a specific address, which shall save you some added expenses as well.
3. Reduced Errors
With e-invoicing, you don’t have to manually add data to your invoice. Instead, you can implement automation, which would reduce the possibility of typos or mistakes. Moreover, you won’t even have to worry about losing your invoice in the email!
4. Improved Tax Compliance
Running manual calculations while filing the taxes might lead to several errors with respect to over-claiming the tax credits. Any unwanted difference in the ITC claims can result in big losses. Therefore, e-invoicing will help you obtain better tax compliance, as the data will be fed directly and accurately in real time.
5. Enhanced Transparency And Visibility
Due to the heightened accuracy of e-invoicing, you will be able to attain better transparency between the vendors and buyers. In case there’s any error in the invoice, it would be prompted at the earliest for you to fix it from the roots.
So, these are some guidelines for e-invoicing associated with large businesses to raise their bills and accept payments through legal rules and regulations. Since 2020, businesses with specific turnover limits have been requested to mandatorily switch to e-invoicing. Starting from the e-invoice limit of Rs. 500 crores worth of turnover to Rs. 5 crores, the rules, regulations, and adoptions of e-invoicing have changed immensely.
Follow the rules, and stay strict on them to ensure you are raising legally authenticated bills! So, if you were still using e-invoicing as an optional means, just because your turnover was between Rs. 5 and 10 crores, it is time to buckle up and adapt the new e-invoice rules under GST as proposed in August 2023. In case you are finding any difficulties in adopting the new rules, get in touch with experts to assist you with the needful.