Why e-invoicing system has been a roller coaster ride for MSMEs so far – Financial Express
It is difficult for you to rectify errors in e-invoices on which IRN is already generated as it is a time-consuming process. (Image: stockvault)
Ease of Doing Business for MSMEs: The e-invoicing or electronic invoicing system completed one year of its journey in October. It has been a roller coast…….
It is difficult for you to rectify errors in e-invoices on which IRN is already generated as it is a time-consuming process. (Image: stockvault)
Ease of Doing Business for MSMEs: The e-invoicing or electronic invoicing system completed one year of its journey in October. It has been a roller coaster ride for many businesses, especially micro, small and medium enterprises (MSMEs). It continues to be a tough one for newly onboarded ones. E-invoicing is the Indian government’s initiative to transform the ways businesses interact with each other in the long run.
E-invoicing applicability
Under e-invoicing, you can get invoices validated with unique Invoice Reference Numbers (IRN) and signed Quick Response (QR) codes from the GST Network (GSTN). Your GSTR-1 and corresponding buyers’ GSTR-2A/2B get auto-filled. Since April 1, 2021, all those with a total annual turnover exceeding Rs 50 crore must generate e-invoices for their Business-to-Business (B2B) and export sales, also covering the medium enterprises as per the revised MSME definition.
Benefits galore
E-invoicing was implemented to plug gaps in GST data reconciliation and curtail tax evasion. You can claim genuine input tax credit along the supply chain and enjoy the automation of tax return preparation. Further, the interoperability of data between various software helps integrate the accounts payable management to the invoicing system in your organisation.
Despite many advantages, the e-invoicing system is not free from challenges, especially for medium enterprises. Since e-invoicing is the core to the functioning of a business, any failure in its setup or implementation can hamper business continuity.
Disruption in daily operations
It is difficult for you to rectify errors in e-invoices on which IRN is already generated as it is a time-consuming process. A small mistake such as the value or reporting a wrong buyer GSTIN can prove to be a headache. You may miss mandatory fields as per the e-invoice schema, such as the six-digit compulsory HSN code for B2B invoices. You cannot rectify such errors directly on the same e-invoice but must cancel it and generate a new invoice for reporting to the GSTN.
Also read: Over 5 lakh retail, wholesale trade Udyam registrations in 5 months since inclusion under MSME
Moreover, you are not allowed to cancel an e-invoice if it has an active e-way bill attached to it, despite errors. Also, e-invoices cannot be cancelled after the twenty-four hours of their generation. In such cases, you must predominantly use credit notes, leading to more documentation work. Since the amendment of …….
