Electronic invoicing is a way to ensure that fake invoices are not generated and input tax credit are not claimed on fake invoices.
The E- Invoicing system works in a way that the invoice is generated on a portal, and is verified by the government.
Once the invoice is verified, a unique identity number will be issued, which will act as the invoice number. This invoice can be issued to buyers.
An electronic invoice can do away with the need for both separate returns filed against sale of goods and e-way bills issued for transport of goods.
Revenue secretary said: “Today a business has to upload invoices, generate e-way bills when goods are transported and file returns as well. Effectively, it has to do these three processes separately.
Now, with e-invoicing, invoices can be generated on a portal and those invoices then can act as e-way bills. And since invoices are generated on a portal, the collection of invoices can become returns.”