Challenges of GST e-invoicing
Electronic-invoicing or e-invoicing is a system to authenticate B2B invoices digitally. According to this system, a standard invoice is converted into JSON format and uploaded to the Invoice Registration Portal (IRP). Each invoice is given a unique invoice reference number (IRN) from the IRP and a QR Code after it is digitally signed. The QR contains details such as the GSTIN of both the seller and buyer, the invoice number, and other details. All the verified invoice data and its IRN are then directly sent from the IRP to the GST and e-way bill portals in real-time.
Who does it apply to?
Your business’s yearly turnover determines whether the GST e-invoicing rules apply to your business or not. From October 2020, businesses with a turnover of more than Rs.500 crore from 2017-18 to 2019-20 were mandatorily required to use e-invoicing. During this first phase, the daily invoice generation in the country increased by over a million, reaching 2.5-2.7 million per day in December 2020 compared to the daily average of 1.5 million in October 2020.
In January 2021, the turnover limit was updated to include all businesses with a turnover of 100 crores and above in the two previous financial years. On April 1, 2021, the limit was updated to 50 crores with hopes of extending the rule to include all businesses in the country soon. Six months after the GST e-invoicing system’s introduction, over 39.81 crore e-invoices were registered, and the count now stands at 1258 crore e-invoices.
The challenges to look out for –
1) Installing new IT infrastructure
Most medium and small businesses enter invoice data manually and do not have systems that can make this process error-prone and hassle-free. Making a sudden switch to digital systems will require better infrastructure and training. Tax authorities must also be equipped to handle the glitches and queries bound to come up during these training sessions.
2) ERP system integration
Businesses with an existing ERP system must focus on integrating them with that of IRP (Invoice Registration Portal), GSP (GST Suvidha Provider), or ASP (Application Suvidha Provider) to facilitate a smooth flow of invoice entries and e-invoices. The integration process makes it easier for companies to deal with large volumes of invoices. One can also choose to sidestep the integration, if unnecessary, and utilize the excel-based bulk e-invoice generation tool IRP offers.
3) Separating B2B and B2C invoices
The e-invoicing rules apply only to B2B invoices. This means companies that deal with both B2B and B2C invoices will have to follow different procedures for each since B2B invoices will require e-way bills and e-invoices, while B2C invoices only require e-way bills. Without automated systems like SkyscendPay in place, this can be a tiresome task.
4) Cancelling or amending invoices
The system does not provide the option to correct or modify an e-invoice. It can only be cancelled, even in the case of minute changes. The invoice can be cancelled in case of error using the IRP within 24 hours, only if an e-way bill has not been generated. The GST portal can be used for cancellation if it could not be done in 24 hours.
5) Reconciliation of e-invoice data with GSTR-1 and e-way bill
A mismatch between the invoice data entered in the IRP, GSTR-1, or GST network systems can result in penalization for non-compliance. In order to avoid such consequences, it is advised to reconcile the data between these three portals.
How can SkyscendPay help your business?
SkyscendPay helps simplify the process of GST e-invoicing using software that caters to each business and their invoice standards. By generating invoices in JSON format, SkyscendPay gets invoices verified and validated by the GSTN portal through online API process, along with the QR code and IRN. It also alerts the seller and buyer with details of the invoice via email, making the process smoother for both parties. Get SkyscendPay for hassle-free e-invoicing services.