GST has brought with it a system of invoicing that requires details of a sale or purchase transaction in a standardized format as defined by the GSTN. This detailed format of the invoice must be followed by all the registered taxpayers to be uploaded on the GSTN portal. Any missed details can lead to rejection of invoices and correction will be required. Invoices are also essential to claim ITC. In such a case, taxpayers need to make sure that their accounting systems are replete with invoice formats that have all the details as mandated by the GSTN.
Businesses need an automated solution that will make sure that all invoices are prepared in the required formats and are accurate according to the GSTN requirements.
There are two types of invoices under GST –
- Tax invoice – Tax invoice is issued when a registered taxpayer supplies taxable goods or services. It is compulsory to claim the input tax credit.
- Bill of Supply – Bill of supply is issued when a registered taxpayer supplies exempt goods/services or when a taxpayer is registered under the composition scheme.
The GST Invoice rules require the following details mandatorily in a GST tax invoice:
- Billing and shipping address
- The serial number of the invoice and date
- Details of the GSTIN
- HSN codes of the goods supplied/sold
- Description of goods and services, quantity and codes, the value of goods
- The taxable value of goods
- Amount of tax and type of tax charged
- Place of supply
- Reverse charge details if applicable
- Digital Signature of the supplier or representative
These details need to be mentioned in each and every tax invoice issued under the GST regime in order to be accepted by the GSTN and any missed detail will lead to rejections and missed ITC on these invoices.
In such a situation a solution for invoicing is a must for preparing thousands of invoices on a daily basis especially for large businesses.
An ideal invoicing solution for GST or a GST invoice software must have the following features
- Generation of GST compliant invoices with columns and fields according to the GSTN mandate
- Ability to design invoices in a required format according to business needs along with GST details
- Ability to track the invoices once made and issued
- Ability to send invoices online to customers/clients so that physical copies may be reduced
- Ability to prepare reports showing missed invoices for transactions not backed by an invoice
- OCR enabled and ability to track missing fields so that invoices may be flagged for errors
- Digital signing / DSC signing enabled so that signatures can be affixed using the software
- Capable of validating the invoices so that invoices may be checked for errors
These broad features in a GST Invoice Software can help businesses automate the process of invoicing and take away the hassle of preparing manual invoices and maintaining them in that format. Digitizing the process of invoicing is the need of the hour. Rightly enough now the government is also moving towards the e-invoicing system and making it mandatory for few B2B businesses to generate invoices using the government portal. This would require businesses to generate e-invoices for sales online thereby doing away with the hassle of uploading invoices separately. All details will be logged in when this e-invoice is generated and an IRN will be generated against this e-invoice to be quoted against the invoice in all transactions including ITC claims and transportation of goods from one place to another thereby replacing E-way bills too.