Technology is integrated in almost every sphere of human life and taxation is no bar to this. The Indian Government is trying to increase digitization in India through various campaigns, the most recent being ‘Digital India’. The Centre has now turned to the taxation department and the year 2020 will see a new e-invoicing system that will be introduced into the goods and services (GST) system.
As part of the e-invoicing in GST system, a standardized protocol, powered by the Institute of Chartered Accountants of India (ICAI) and information technology, will enable machines to read electronic invoices. This will help in avoiding errors caused by manual date entry, end duplication, and ease filing.
“An e-invoice shared by a seller with his buyer or bank or agent or any other player in the supply chain can be read by machines, thus eliminating data entry errors,” Prakash Kumar, Chief Executive Officer of GSTN, said.
No changes need to be done
The system is being introduced on a voluntary basis and therefore doesn’t require any changes as far as businesses that choose not to use this system are concerned. “The service providers offering the ERP or billing software will have to make changes in their codes to make them conform to the approved standards,” said Kumar.
It can be used voluntarily for those businesses and business owners who have a turnover of Rs 500+ crore from January 1, 2020 while businesses with a turnover of Rs 100+ crore can employ the system from February 1, 2020. E-invoicing will also help keep an eye on fraud.
A business process
The reporting of business-to-business (B2B) invoice data will become part of a trader’s business process, as is happening with regard to generation of e-way bill. The data uploaded in the e-invoicing under GST, will make sure that the ‘Return’ as well as e-way bill gets generated by the GST system. The uploaded invoice data will be digitally signed by the GST system and shared with the seller and buyer.
An invoice generated in the new system can’t be cancelled partially. It has to be cancelled fully and it has to be done within 24 hours.
The end of the decade is bringing new possibilities for our country to progress on various fronts including finance and taxation.