The Indian government rolled out the electronic invoicing system for all business-to-business (B2B) transactions under the Goods and Services Tax (GST). The government introduced the e-invoicing system in a waved approach, and the first selected are businesses with an annual turnover of over Rs 500 crore. Four such significant taxpayers (large MNCs) KG supported, and those companies have the solution operational.
By January 1, 2021, taxpayers will be available with an annual turnover of over Rs 100 crore. KG has a proven solution and a process to implement quickly.
India: e-invoicing starting 1 October 2020
The Indian Goods & Services Tax Council has proposed a revised plan for the roll-out of live e-invoice reporting from 2020 of business to business (B2B) and businesses to consumers (B2C) invoices to the GST System. The regulation will be mandatory for large and mid-sized taxpayers by October 2020 (introduction was scheduled on 1 April 2020 but postponed due to Coronavirus outbreak):
Registered persons with an aggregate turnover in a financial year exceeding INR 1 billion must undertake e-invoicing concerning the supply of goods or services or both to a registered person (i.e., B2B supplies)
Registered persons with an aggregate turnover in a financial year exceeding INR 5 billion are required to have a Quick Response (QR) code on their invoices issued to an unregistered person, (i.e., B2C invoices)
A requirement is that an e-invoice is created in the taxpayer SAP system. The taxpayer submits that GST e-invoice to the 'Invoice Registration Portal' (IRP). That IRP of GST will generate a unique Invoice Reference Number (IRN), and digitally sign the e-invoice and also generate a QR code.
The digitally-signed invoice will be processed in the GST Network and e-waybill system within 24 hours. The taxpayer is returned the IRN. The customer is issued with the approved invoice. The invoice will be sent to both the buyer and seller mail IDs that are provided in the invoice. The aim is of e-invoicing introduction is too avoid VAT fraud such as fake invoicing:
Better taxpayer services: one time reporting on B2B invoice data in the form it is generated to reduce reporting in multiple formats
Reduction of tax evasion: system level matching of input credit and output tax
Efficiency in tax administration: elimination of fake invoices
What do we offer?
We have developed an SAP-integrated solution with the cockpit to select reportable outgoing invoices, create periodic Indian e-invoicing, E-submission of Indian JSON files, and control reports and the functionality. Although not yet a mandatory requirement, the solution is ready for FI invoicing.
We can add the QR Code, IRN, into the SAP script. The other key GST processes features we developed for optimum GST management are electronic waybill ('E-way bill') and GST returns, GST reconciliations and GST input credit utilization against its eligibility.
A short demo
What is an SAP add-on?
An SAP add-on enhances standard SAP itself.
Add-on components are extra functionalities that do not come with the main SAP product. Different organizations have different requirements. SAP has recognized that and facilitated that additional functionality can be added and that such functionality as a component can be integrated with standard SAP.
An add-on is permitted by SAP – the code 'ABAP' is written and transported where SAP allows it. That means these add-on components sit above the core and access the same dictionary objects or repository objects and perform the required functionality. It contains custom authorization objects according to SAP standards.
SAP add-on solutions are, therefore, without an external interface or external software and can be implemented with minor or no SAP impact in any other area. An SAP add-on does not change the programming code of SAP. As a result, SAP upgrades do not lead to any problems, and maintenance is straightforward.
Additional functionality is added to standard SAP:
Formal support and active involvement of senior management
Optimum process improvement or business transformations will not likely be realized by the sum of individual independent efforts.The risk is that individually everybody knows what needs to be done within his or her own area of expertise, but what is lacking is overall direction and thus progress.
Anticipate what users would want
We combine technical knowledge with industry understanding and knowhow of technologically advanced tools and methodologies available in the market or developed by ourselves.
What do we like to achieve
Focus on tax processes that could be improved
Manual process: same data requests are made by different stakeholders
As Is assessment
Anticipate future changes and the data needed
What are tax trends?
What is happening locally and what should be considered across jurisdictions where you operate?
Anticipate new stakeholders and their data needs or requests (internal and external)
Define scope and actions for short, mid and long term
Write business case for change
Realize sponsorship for implementation
‘As is’ assessment, actions and business case
What tax data is requested and by whom?
What tax process can be improved and what can be automated?
CIT, VAT, tax data warehouse
What is the Return on Investment?
Hard saving: process improvement
Meeting (new) tax requirement
What systems are in use: SAP, Oracle, etc
By which entities?
How many end-use computing tools (e.g. excel spreadsheet) do we have?
How do we avoid an ad-hoc solution?
Understand the bigger picture
Real problem and not the symptom
Risk and reward
Technology-related tax risk: understand and address the potential harms and benefits of (new) technology.
Technology tools & systems integration
Ascertaining proper IT support for ensuring efficient, timely and reliable reporting.
Change and project management
VAT should be considered in every aspect of the process, from concept through completion and beyond. Managing by design — looking at any process or transaction from end to end and factoring in all the requirements and controls essential to designing and optimizing a compliant VAT process.
Effective communication and teaming
We speak the language of the business and IT and no translation is needed.
Set up a project plan
Set up a project charter that will take effect preferable during feasibility but ultimately during design
Write a business case and problem statement
Define scope of the project
Define objectives and goals of the project
Involve stakeholders and define priorities
Set measurable milestones
Ensure that the right sponsors provide buy-in.
Identify (project) risks and how to manage them
Jointly validate and refine the project plan and develop a roadmap to success
Hold regular meeting to track progress of the various work streams