E-invoicing is the future of electronic billing, and India is gearing up to join the countries that have already adopted it. E-invoicing in India is a new system, in which B2B transactions will be authenticated by GSTN’s Invoice Registration Portal (IRP) and the invoices generated will have to comply with the published schema in order to ensure interoperability of data across the GST ecosystem.
One of the major benefits of e-invoicing is that it maintains evidence and ensures transparency. In the current system, the government does not have any proof of the transactions taking place between a seller and a buyer. With e-invoicing in action, the seller will have to get the invoice validated by the GSTN portal, and the IRP will issue a unique reference number for that transaction. Once the unique IRN is issued, a copy of the tax invoice will be shared with the seller and the recipient. This method of tracking invoices in real time will allow the government to monitor fake invoices while fighting against tax fraud.
Meanwhile, e-invoicing will also enable automation when it comes to GST return filing and e-way bill generation. The current system of filing invoices involves manual data entry, which is prone to errors. Automating the process makes it quick, easy and error-free.
To understand how e-invoicing will change the Indian tax regime, we have put together an infographic explaining the differences between the two systems.