Every month suppliers will be asked to upload their invoices to the GSTN portal and they will be matched with purchases from customers. So, matching invoices will be a monthly affair for businesses.
The use of IT systems for bookeeping and tax compliance work will be seen even in many small and medium-sized businesses from now on.
A well integrated IT system will also help suppliers and buyers to match their invoices effectively. Invoice matching is a very important part when it comes to trading.
What Is Matching Invoice?
Matching all supplies taxable, bought by a buyer and supplied by a supplier is known as Invoice Matching.
According to finance minister, “It is through the invoice matching and automated return mechanism that the government can guarantee eligible input tax credit is accurately transferred between the states”.
GSTN is working towards the GST web application which is hosted on the common portal to make invoice matching easy.
How do Invoice Matching work?
Invoice matching is very important because, based on the GST law, tax credits for input from services and items purchased will only be available when the supply details submitted in the buyer’s GSTR-2 return match the inventory details outside that submitted in the GSTR-1 supplier.
Which items from invoices are matched?
During the submission of the GSTR-2 form, the GSTN portal matches the following fields:
- GSTN from supplier
- GSTN recipient
- Invoice Number / Debit Note
- Invoice / Debit Date Note
- Taxable value
- Tax amount
Are there rules for matching invoices?
Businesses need to upload invoices and bills in a certain format. The government has issued a list of mandatory elements that must be fulfilled by each GST invoice. For example, it is mandatory to mention the customer GSTN and the place of supply of goods or services.