Having turnover more than 50 Crores? Get ready to generate E-Invoice for your business transactions!
A new update comes in E-Invoice generation limit. If your turnover is exceeding 50 crore, be careful! Now you are required to generate e-invoice else you may face many troubles.
Central Board of Indirect Taxes and Customs (CBIC) issued a new notification on 8th March, 2021 in which the GST E-Invoicing threshold value is reduced to 50 Crores. This will come into effect from April 1, 2021.
Till 31.03.2021 e-invoice required to be generated by the taxpayers having aggregate turnover exceeding 100 Crores but on the recommendation of the Council, Now the government has reduced the limit to 50 Crores. That means now the entities having turnover more than 50 Crore will have to generate an e-Invoices.
According to Rule 48 (4) of CGST, notified class of registered person whose aggregate turnover in any preceding financial year is more than the prescribed limit have to generate invoices.
As per Rule 48 (5), if a notified person is not generating e-invoice as per prescribed value, that invoice will not consider a valid invoice. In that case, recipient of that invoice will not be eligible for ITC. Also, strict actions can be taken against supplier for sending invalid invoice.
An e-Invoice is a regular invoice, which authenticated from IRP portal and having IRN (Invoice Reference Number) and QR code affixed. You can prepare it by uploading specified particulars of invoice on Invoice Registration Portal (IRP).
Government has been facing a serious issue of fake invoice due to tax leakage and fraud for a long time. To overcome this problem, they introduce the concept of e-invoicing. They make it mandatory for suppliers to authorize the invoice. They are required to send their generated invoice on government portal and obtain an IRN number with QR code. With QR code, the government can easily track the following details:
As e-invoice data will get auto updated to GST portal as well as e-way bill portal, that means the government can keep a sharp eye on Business to Business (B2B) transactions, its movement and control tax leakage or fraud completely. Also, this system will help in reducing the disputes among transaction parties.
If you think e-Invoicing offers benefit to supplier only, you are mistaken. It comes up with remarkable benefits for buyers, suppliers and managers too. Here find the list of those benefits:
Bring accuracy in the system: The invoices are captured electronically that means data can process without any error into payable system. This will bring more accuracy in the system.
Reduction in cost: Next a key benefit of e-invoicing is a reduction in the cost. As this system completely neglect the manual data entry of paper invoice, it leads to save approx. 50 to 60% of cost.
Enhance Productivity: As we above mentioned, the e-invoicing bring accuracy in the system, thus there will be less possibility of errors and hence the less probability of re-work. This will ultimately come up with enhanced productivity outcomes.
Focus more on revenue-generating activities: As e-invoicing helps in eliminating the possibility of any manual error during invoice generation, it will give buyers more time to focus on revenue generating activities.
Improve Dispute Handling & Avoidance: Invoice disputes always come up with up huge cost and inefficiencies in financial supply chain. The only solution to avoid these disputes is electronic invoicing. It greatly lessens the number of calls from suppliers asking about payment status or disputing payment amounts.
Along with providing benefits to buyers, process of e-invoices bring many advantages to suppliers too. Some of the remarkable benefits of e-invoicing for suppliers include:
Enhanced Customer Satisfaction: The e-Invoicing reduces the payment issues and invoicing processing, thus customer can receive the level of service they would expect. This will give them a chance to utilize satisfactory services. According to a report, the companies that have executed e-invoicing often experience lower customer churn.
Auto GST Return & Eway Bill: Now, compliance become easy to supplier, on generation of e-invoice, data of the invoice will get automatically updated into GST portal for GSTR1 & GSTR3B and same will also be updated to e-way bill portal for e-way bill generation.
Fewer Rejected invoices: One of the biggest advantages of electronic invoices is appearing fewer rejected invoices. This is because e-Invoicing allows straight-through processing directly from the AR system to customer’s accounts payable application.
Further, by evolving this system, buyers don’t need to manually re-key the data as a result there is less possibility of occurring data entry errors. Thus, invoices will less rejected and customers can quickly start processing them.
Minimized the cost: Along with enhancing the customer experience, e-Invoicing reduces the cost to a great extent. As per an analyst study, the companies that have automated their AR process (Accounts Receivable) have got more cost saving results.
This process minimizes the delivery cost up to 80% by saving materials, processing, storage and postage. In addition to that, e-invoices save the cost associated with the storage of paper copies.
Enhance Productivity: The e-Invoicing system brings the accuracy that tremendously reduces the amount of rework. Companies can save that time and invest into their productive tasks. Additionally, with the e-Invoicing system, customers receive their invoices and precise when they receive. There is no need of status call. All these activities help a company to improve their business productivity.
Quick Payments: When it comes to payment, e-Invoicing helps in eliminating the delays of mailing, sorting, routing and re-keying. Customers can easily route the invoices for quick processing and approval as the data is immediately available electronically. As a result, invoices can be paid on time.
Improved Visibility: Invoicing on the paper indicates that there is a delay in the invoice becoming visible within the accounting system. This has implications for the accuracy of forecasting and forward planning.
Optimised cash flow: Most organizations make efforts to optimize their working capital. It promotes business agility and can reduce the requirement for external financing. By shortening the order-to-pay and order-to-cash cycles, e-Invoicing enables businesses to accept payments promptly and take the benefit of any discount plans that may be open.
Improved IT system optimisation: E-Invoicing does not need a large technology expense. Most IT departments can perform the secure connectivity and data transmission needed through optimising their existing IT infrastructure or employing a third party provider. IT managers can reduce the resources needed to support e-Invoicing functionality.
Develop Strong supplier/customer relationships: The e-invoicing process lessen the amount of disputes as much as possible that allow a company to deliver a high level of service. Moreover, by integrating with the systems, customer or supplier both parties make a notable investment that help in building strong relationship between them.
If you also wish to utilize the significant benefits of e-invoicing, let us know. HostBooks brings a smart solution for generating e-Invoicing seamlessly. To get more information about the solution and its unique features, comment here.
Create a free account to get access and start
creating something amazing right now!