What Is Invoice Numbers Importance On A GST Invoice?
What is an invoice number? Each person or business registered as a taxpayer is given a unique consecutive number for identification of the flow of payments known an Invoice Number. It enables the government to keep track of funds that rotates across the country for various purposes.
In other words, we can define the GST invoice number as an Aadhaar number of a tax-paying business or a person. The given number should always be mentioned on purchases if the purchased goods or services are worth Rs.50,000 or more.
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What is Invoice Number and Its Importance in the GST Invoice?
The invoice number is generally within 16 digits and should not exceed 16 characters. The number is either initiated by “1” or an integer higher than 1. Often, the given number includes the date of registration, for example, “20200003”. Some invoice numbers also include alphabets representing the company name or the owner’s name, for example, “2020KP005”.
The given number is reflected in the GSTN portal every time it is used, which acts as a pre-validation. A unique number is also issued along with an invoice number known as IRN (Invoice reference number). An IRN is sent to the taxpayers directly once IRN is generated.
Importance of Invoice Number in GST Invoice
The invoice number is a crucial component of GST invoices and is vital to manage bookkeeping processes. It acts as a record or documentation towards securing a company’s or a service’s history. An invoice number is also significant concerning legal protection. It helps prevent small businesses in India from being jeopardized by improper or fake lawsuits.
About 7% of revenue is generated by the taxpayers, who sum up to a population of 132 crores. In a country like India, the exchange of goods and services takes place even without government involvement.
Previously, the inadequate taxing procedures in India were one of the prominent reasons behind taxation fraud. Thus, the government adopted improvised taxation principles such as numbering GST invoices to avoid misleading goods and services. Therefore, enabling the government to keep track of accurate GST return filings.
The GST invoice number also helps lead the auto-populated filing under the new GST return forms, increasing the accuracy and speed of the procedure with ease. Thus, it also helps auto change the relevant information in ANX-1 and ANX-2 of the taxpayers.
Connectivity is another major issue faced by taxpayers in India. The GST portals malfunction often during the auto-population or during uploading the GST forms of clients by government. However, the introduction of new GST returns filing procedures has successfully failed the technical issues of returns failing.
Conclusion
GST invoice number linked to the exports and imports of goods and services is a boon. It helps carry out a secured transaction as it acts as a written agreement or a proof of the transaction.
India has the lowest taxpayers despite its overpopulation. Thus, the GST invoice number’s implementation and use can significantly help track down violations of laws related to funding transactions in the nation.
Professionally creating invoices with the GST invoice number helps emerging companies or a potential client get paid faster, which generates more revenue for the nation.
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