4 Ways To E-Invoicing: The Complete Guide To GST
Did you know that from July 1, 2022, businesses in India will have to follow a new way of accounting? The Goods and Services Tax (GST) has been introduced as a unified tax system across the country. With this new system, businesses will have to follow the process of e-invoicing for all their transactions. This means that if you are running your own business, you will be required to generate an e-invoice for every invoice issued to your customers. An e-invoice is different from the usual invoice because it is digital and generated online using specific software. The good news is that there are various ways in which you can generate an e-invoice in India and stay compliant with GST standards. Here are 4 ways to e-invoice in India:
How To E-invoicing Under GST?
If you want to know how to e-invoice in India, then you need to understand the basics of e-invoicing. E-Invoice under GST is an electronic method of issuing an invoice. Traditionally, an invoice is a document that represents the sale of goods or services between a seller and a buyer. The invoice is used to record the details of the transaction such as the price of the goods/services sold, payment terms, and the date of the transaction. In a digitized world, however, invoices have also been transformed into an online format. e-Invoices are created, sent, and stored online. They are a great way for businesses to track their sales, manage cash flow, and keep their books up-to-date.
E-Invoicing Through The GST Network (NGST)
The Goods and Services Tax Network is the IT network that has been created to implement the GST in India. On this network, you can create e-invoices for all your customers. You can also generate e-invoices for the sales that you make to your customers. The e-invoices will be legally binding for both you and your customers, just like paper-based invoices. The GST Network provides you with the necessary tools to generate and send e-invoices to your customers. You can enable e-invoicing for all your customers by logging into the GST Network and selecting the option ‘Issue e-Invoice’. You can also generate e-invoices for all your customers through the GST Network. To do this, you need to select the option ‘Create e-Invoice’. The GST Network will then guide you through the process of generating e-invoices.
E-Invoicing Through The Electronic Commercial Invoice (e-CII)
An electronic commercial invoice is a document that is used to record the sale of goods or services between a seller and a buyer. It is similar to the paper-based commercial invoice, but it is generated and sent electronically. The electronic commercial invoice is a must-have for businesses in India as of July 1, when GST kicks in. You can generate an e-commercial invoice for your customers through the GST Network. To do this, you have to log into the GST Network and select the option ‘Issue e-CII’. Once you have generated an e-commercial invoice, you can send it to your customers through email. Your customers can use this e-CI to claim their input tax credit from the GST authorities.
E-Invoicing Through The Registered User Environment (RUE)
If you want to know how to e-invoice in India, then you must know about the registered user environment (RUE). The RUE is the GST Network’s user interface. It is a hosted application that will be used to generate e-invoices in the future. The RUE is currently in the testing phase and is only available to GSTN’s testing user group (TUGC). GSTN’s TUGC comprises businesses and tax professionals who are helping GSTN test its systems before they are made available to the general public. If you want to know how to e-invoice in India, then you will have to wait for the RUE to be made available to all businesses in the country. GSTN will make the RUE available to all businesses once it is completely ready to be used by all.
E-Invoicing Through Electronic Benefit Transfer (EBT)
An electronic benefit transfer is a transfer of money through a digital system. For example, direct benefit transfers are electronic benefit transfers where money is transferred directly to a person. Similarly, e-invoicing through an electronic benefit transfer is the way to e-invoice in India. You have to set up an account with a government agency that will allow you to transfer money electronically to your customers. Now, you can also set up an account with a government agency that will transfer money to your customers, once they have issued an e-invoice. You can avail of this method to e-invoice in India and be able to accept payments directly through your bank account.
Final Words: The Verdict
If you want to know how to e-invoice in India, then you have to follow these methods. The GST Network will make it easy for you to generate e-invoices. You can also generate e-invoices through the electronic commercial invoice, through the registered user environment, and through an electronic benefit transfer. These methods will help you to know how to e-invoice in India and follow the new GST rules.