Introduction
The GST Act of India mandates every GST-registered company or individual business to follow the necessary schema associated with their tax invoices. Accordingly, if any business has an annual turnover of more than 5 crores, it should generate a tax invoice or an e-invoice.
Overview of GST Invoice
GST invoice or GST e-invoice refers to a receipt or bill of different items sent or services delivered by a service provider/seller to a customer. It highlights the products/services and their total due amounts. One can check this invoice to determine the prices of a product/service before levying SGST and CGST on them. The GST invoice bill also highlights the amount of charged taxes per product/service, which an individual buys from the provider or seller.
Importance of GST Invoice
GST Invoice associated with the Indian tax regulations or the Goods and Services Tax regulations offer the following benefits-
- GST invoices eliminate the requirement for multiple invoices to make sure businesses pay their taxes timely.
- The GST invoice serves as a prime source of every piece of information related to any transaction to reduce the probability of errors.
- GST invoices save the valuable time, effort, and money spent on filing GST returns, which may improve the total profitability of the business.
- GST invoices make sure of your compliance with the latest GST taxation laws. Based on concise information on every transaction, businesses make sure to meet every tax-related obligation strictly.
Also Read: Importance And Benefits Of GST Tax Invoice For Small Businesses
Types of GST Invoices
Regular GST Invoice
A regular GST invoice or a GST bill refers to a list of goods and services delivered with their due amounts for making payment. Every GST-registered business must fill out this invoice to stay GST-compliant while selling their goods and services. The regular GST invoice contains the following details-
- The invoice number and the invoice date
- Name of the customer
- Billing and shipping addresses
- GSTIN of the taxpayer or the customer
- HSN Code
- Place of Supply
- Details of diverse items, like number/quantity, description, and unit in kg or meter
- Taxable discounts with both taxable and total values
- GST rate and the taxation amount
- Suppliers’ signature
Regular invoices track every sales-related transaction with the clients/customers. Also, a regular invoice lets any business track its delivered services and sales accomplished. A few common reasons are-
- To request clients/customers to release timely payments
- To maintain supplies and sales accounts
- To track the business inventories
- To use invoices as historical data to predict future revenue
- To track the business income to comply with the GST regulations
Export Invoices
An export invoice outlines the goods/services supplied by exporters and the respective amount possessed by the importer.
Importance of Export Invoice to Claim GST Refunds
- An export invoice is a vital shipping document to help GST and customs officers identify the exported goods.
- The invoice is documentary evidence to initiate any insurance claim for the lost goods.
- Importers need the export invoice to help clear goods at various custom services in their countries.
- Government authorities use export invoices to obtain the value of goods and the applicable taxation rates.
Also Read: Everything You Must Know About Export Invoices
Revised Invoices
GST taxpayers need to amend or correct their GST invoices because of certain changes in underlying circumstances or billing errors. Here, one should revise their GST invoices to report them on their monthly returns. The changes will include taxation rates, price variations, and related cases that need credit notes or supplementary invoices.
For instance, a person should issue a revised invoice under GST to correct the invoices issued before getting a GST registration. It mainly occurs during your transition from GST implementation to getting the official registration certificate. Taxpayers must rectify every invoice issued during this period by sharing a revised invoice within a month of obtaining the registration certificate.
How GST Software Eases Filing GST Invoices and Revise Them
However, preparing GST regular invoices, export invoices, and revised invoices are hectic and tedious tasks. Here comes the role of innovative GST billing software to prepare revised GST invoices as follows-
Avoids Undue Errors
Efficient GST software avoids making undue errors while filing GST returns, including the entry of any wrong HSN code. One should remember that any error while filing GST returns results in legal hassles followed by license cancellation.
Eases Reconciliation
The software can easily reconcile different forms and match the data related to sales and purchases efficiently.
Appropriate GST Filing
GST invoicing software lets enterprises enter their details precisely while filing their GST forms. In this way, it reduces the problem related to wrong entries and saves ventures from facing any legal issues in the future.
Bill of Supply
Businesses should issue a bill of supply when they sell goods and services, which are exempted from the Goods and Services Tax in India. Furthermore, any registered business can issue only a Bill of Supply instead of GST invoices based on the composition scheme. In such situations, the government does not charge any GST on the respective sales transactions. Accordingly, businesses should issue a Bill of Supply in the following cases-
Composition Dealer/Scheme
Any GST taxpayer may choose a composition scheme if his turnover is up to Rs 1.5 crores. In this case, dealers cannot collect any tax from their buyers but deposit taxes on their receipts only.
Export Supplies
As export supplies are zero-rated, the exporter does not need to charge any GST on its invoice.
Exempted Goods/Services Supplies
Whenever any registered dealer supplies exempted goods/services, he should issue the Bill of Supply instead of a tax invoice.
Role of GST Software to Identify Transactions
The GST billing software in this regard helps businesses and accountants to segregate the transactions below and above Rs 1.5 crores based on its GST compliance, and preparation of real-time reports.
Debit Notes and Credit Notes
Debit Notes/Debit Memos and their Roles in GST
Debit notes or memo documents notify any company or business about the credit they owe and request for its repayment. Buyers and sellers issue these notes to formalize requests for the return of various credit purchases. However, a debit note also contains a list of various transaction details, like details of items, reasons to issue them, and their issued dates. Suppliers issue debit notes in GST in the following conditions-
- When suppliers need to increase the taxable value of their supplies
- When suppliers need to increase the GST value or rate charged in their invoices
Credit Notes/Credit Memos and their Roles in GST
Credit notes or credit memo documents are issued as receipts for changed invoices or orders. Suppliers issue these documents to their customers to cover only a specific part or the entire invoice’s value. A supplier can issue the credit note in GST under the following conditions-
- When a recipient returns the goods/services supplied by a supplier or the recipient finds the supplies are deficient, the supplier must issue credit notes. Here, the credit note intends to reduce the value of an original supply.
- When the supplier needs to reduce his supply’s taxable value
- When the supplier needs to reduce the charged GST value or GST rate in his invoice
Role of GST Software to Adjust the Tax Liabilities
An innovative GST billing software furnishes the mandatory details related to debit notes in the form GSTR-1 of the respective months. Also, taxpayers/suppliers use GST software to make the debit and credit note details available to their recipients in the form GSTR-2A.
On the other hand, suppliers use the latest GST billing software to highlight the details of credit notes in the form GSTR-1. The software also helps suppliers to prepare and submit the form GSTR-2 by reducing their tax liability with the help of credit notes. However, the tax liability is reduced only when the recipient accepts the respective details and again submits the form GSTR-2. Here also, the GST software uses automation to file GSTR-2 on behalf of the goods/services recipients.
Advanced Receipts
Whenever customers make advance payments to their suppliers to procure goods and services, GST applies on the respective advance payment and the tax serves as a consideration for the supply. The customer remits this advance amount before it conducts the actual transaction. Accordingly, tax authorities perceive the advance payment as a taxable amount or an advanced receipt for the supplier before the delivery of goods/services takes place.
How GST Software Processes the Advance Payment Reconciliation in the GST Regime
Taxpayers can process the advanced payment reconciliation while receiving goods and services in the GST regime as follows-
Creating Unapplied Receipts
Companies should use a designated GST software program to create several unapplied receipts for diverse advance payments. As the actual supply is pending in this case, the program needs to design the unapplied receipts without matching the sales invoices.
GST Calculations for Advanced Receipts
Businesses may use the latest GST billing software to calculate GST based on taxes auto-calculation feature on advanced receipts for goods/services. Here, the software programs also consider the current SAC or HSN codes.
Offset and Match Receipts
Businesses today use specialized GST billing and tracking software to offset advance payments against goods and services invoices separately. Moreover, every GST software stays tax compliant to make sure to adjust the GST liability for advanced receipts accurately.
How to Enhance Business Processes with the Latest GST Software
Automation Features for Diverse Tax Invoices
The GST billing software automates your company’s processes related to filing GST returns. Whether it is invoicing, billing, filing, and calculating liabilities, taxes, and penalties, the software performs complex complications automatically. Key automation features of the software include the following-
Invoice Generation
The software helps users to generate invoices by covering vital and mandatory details.
Tax Calculations
A sophisticated GST billing system uses commodity classification rates and codes applicable to diverse items to determine the GST. It displays GST inputs precisely and reduces errors while you file annual tax returns. Depending on your selected software, you always expect to get multi-tax structure accommodations.
GST Compliance Reports
GST billing and invoicing software generates GST-compliant reports, which are necessary to fill out tax returns and necessary to make businesses compliant with GST regulations.
Also Read: How GST Billing Software Can Help You Save On Taxes
Customization and Flexibility
Any latest GST software puts its every possible effort into providing customization of your GST invoices according to your business requirements. For this, the software provides certain templates, by which you can create templates to display the necessary information. Moreover, one can get customized templates to customize the method of displaying the invoice details. Accordingly, the GST software provides the following options to select and change under customization and flexibility to your tax invoices-
Additional Description
Businesses may add a few extra descriptions on their item invoice to highlight the items they are selling and provide a brief description on the line corresponding to the items to sell.
Discount
The customization feature of GST billing software allows suppliers or businesses to select the discount option if anyone wants to include the discount in their invoices. Here, discount refers to the reduction in purchase or sale price.
GST Cess
GST Cess refers to a compensation cess levied on specific goods/services to compensate for any revenue loss because of the GST implementation. If you want to view GST cess on the invoice, you should opt for GST cess.
Type of Tax
Businesses may easily select either inclusive or exclusive tax invoices according to the latest GST Act.
How to Select the Best GST Billing Software
Selection of the best GST billing software is a crucial decision, as it significantly influences the financial management of your business and its efficiency to stay tax compliant. Here, you will learn the key considerable points for a wise selection-
Understand Your Business Requirements
To start, we suggest you assess your business requirements. These include considering your business size, its transaction volume, and the complexity associated with the billing process.
Facilitates Seamless Integration
Make sure that your selected GST invoicing or billing software should integrate with other systems seamlessly. These include ERP and CRM systems with accounting software.
Strict Compliance with Tax Regulations
Every business must make sure to select the GST software that always undergoes regular updates with the new GST rules. In this way, your business will stay strictly tax-compliant and avoid penalties.
Ability to Deal with Increased Invoices and Transactions
Your chosen GST billing and invoicing software must be able to deal with consistent increases in the number of GST invoices and business transactions as your company expands.
Look for an Intuitive Interface
The software must possess an intuitive interface. Accordingly, your team should use it efficiently without any requirement of extensive training.
Automation and Customization Features
Always give priority to the GST billing and invoicing software that comes with exclusive automation features. These include automated reconciliation, e-way bill generation, and automated tax calculations. Each of these automation aspects will save valuable time and reduce the probability of errors significantly. Simultaneously, the software must allow customization to fulfill your unique tax invoicing requirements for your business.
Excellent Customer Support with Robust Security
Like any other software, operating GST software requires expert guidance to some extent. Make sure that the software provides you with excellent customer support and enough training resources to troubleshoot the issue. Besides, the software must come equipped with certain robust security measures to safeguard against cyber threats and data breaches.
Demos and Trial Periods
Always go with the GST billing and invoicing software that provides demos or trial periods. By opting so, you can test the suitability and functionality of the software before your selection.
Conclusion
GST invoicing and billing software come with many stunning features for creating and managing GST invoices, generating tax reports, calculating taxes, tracking advance or other payments, and managing inventories. The GST billing software intends to automate the business billing process to make sure of appropriate GST compliance to save valuable time and reduce the risk related to errors.
Therefore, regardless of the type of GST invoice/invoices you want to prepare, make sure to get the latest and the most advanced Captain Biz GST Billing software. The best thing is that Captain Biz offers businesses a free trial session to let them access it firsthand and check its ability to streamline GST compliance. What else you are waiting for, register yourself with https://www.captainbiz.com/register/ and start using it to maximize your GST tax invoice filing experience.
Frequently Asked Questions
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What types of invoices do businesses need to prepare for filing their GST returns?
Every business needs to prepare diverse tax invoices depending on their business scopes and types. These include regular invoices, export invoices, bills of supply, debit/credit notes, advance receipts, and lots more.
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What refers to GST billing and invoicing software?
GST billing and invoicing software helps businesses manage their existing financial records and prepare bills for diverse goods/services.
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What types of clients should get export invoices?
Export invoices in the GST Act are for clients who stay outside of India. Accordingly, businesses request the export invoice by placing the country-specific currency value on it.
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Does the GST billing system have its scope in the future?
Yes, the GST billing system has a wide scope in the future. The reason is that the e-invoicing procedures of GST have changed the financial activities done by business enterprises in India. Moreover, sophisticated GST software has improved the overall work efficiency and GST compliance among companies in India.
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What are the functions performed by GST invoicing or billing software?
GST invoicing or billing software automates invoicing or billing tasks and calculates the applicable taxes appropriately to ensure compliance with the latest GST regulations.
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Is GST billing software accessible in any place?
GST billing software is accessible based on its online access facility. You only need an internet connection to manage your invoice-related tasks from any place and at any time.
