With stringent compliance needs and complex business cycles, enterprises are looking for more viable solutions to make ends meet. GST filing is one such complex, resource-intensive and time-consuming process that exists across all industries. However, this compliance gets more complicated in the world of infrastructure.
While many infrastructure organizations are filling GST manually through the government portal or taking the ASP-GSP route, they experience some anomalies, which eventually slows the business cycle. Some of the challenges actively faced by construction enterprises are –
- Frequent delays in GST payment and filing returns
- Errors in calculation leading to excess payment or less payment
- Mistakes in filing leading to multiple rounds of efforts by the tax team
- Mismatch between returns filed (Eg. GSTR 1 & 2A) requiring rework and extra effort by tax team
- Mismatch between ERP data and data in returns filed without a proper document trail of changes
- Mismatch between returns filed by the tax team and vendors
E-Invoicing or electronic invoicing is a modernized B2B invoicing system where GSTN electronically authenticates invoices for further use on common GST portal. The e-invoicing system under GST works by issuing an unique identification number issued by Invoice Registration Portal (IRP). All invoicing information is then transferred from to the GST portal and e-way bill portal in real-time. This drastically reduces manual data management, bypassing the data directly by IRP to the GST portal.
Benefits of e-invoicing system for a construction organization
Other than reducing the intensity of manual work, e-invoicing brings a host of other benefits for construction companies like –
- E-invoice bridged the significant gap in data reconciliation under GST to minimize mismatch errors under GST.
- E-invoices generated on one platform can be easily read on another system bringing harmony and reducing data entry errors.
- Real-time tracking of invoices prepared by the supplier to ensure maximum transparency.
- Backward integration and automation of tax return filing. This results in relevant details of the invoice auto-populated in generating the part-A of e-way bill and other returns.
- Quick availability of genuine input tax credit.
- Fewer audit possibilities by tax authorities due to greater transparency at the transactional level.
A credible e-invoicing solution for GST will furnish real-time tracking of all invoices. The platform will host the invoices on a common portal and in turn help in multipurpose reporting. Once the invoice is analyzed and authenticated, the details get auto-populated to the GSTR-1 portal. The system shares the same information over email mentioned on the e-invoice.
E-Invoicing to curb tax evasion
E-invoicing curbs tax evasion in the following ways –
- Tax authorities will have access to all the information needed in real-time since the e-invoice will have to be generated through the GST portal.
- Fewer chances of invoice manipulation since the invoices are generated before the transaction.
- Reduced scope for fake GST invoices as only genuine input tax credit can be claimed since all invoices are generated through the GST portal itself. The input credit can be matched with output and access the tax details to track fake tax credit claims.
The government has already established a roadmap to implement e-invoices on a national level. Not just it will cause a massive reduction in compliance, it will also be good for the taxpayers, streamline taxation and control GST frauds.
Highbar Technocrat is one of the leading end-to-end IT solution providers for the Infrastructure, EC&O, Real Estate, and Power sectors. They are SAP Gold partner and offer a wide bouquet of digitally integrated solutions ranging from implementing SAP-based ERP solutions like Rise with S/4HANA, Cloud-based solutions to 5D BIM for mega infra-projects, RPA & IoT solutions, and many more. With an in-depth understanding and core competence of the construction & infrastructure industry, Highbar is the perfect blend of domain knowledge in the infrastructure business with a team that is well equipped to understand and relate to the requirements of the sector.
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Written By — Mr. Snehal S Kumbhar | Solution Head — Prime Business Streamline compliance requirements with E-Invoicing under GST