In the 37th Council Meeting, the GST Council officially approved the scheme of E-invoice. If you want to generate an e-invoice under GST, these steps will help you generate e-invoice easily.
What is GST E-invoice?
E-invoice isn’t an invoice that can be simply downloaded or generated through the GST Portal, but it’s a process of confirming all the B2B invoices electronically by the GST Network (GSTN). It’s not advisable to generate e-invoices directly from the common portal.
E-invoicing or authentication is necessary to make sure that the invoices generated by your accounting software are valid to be used for e-way bill creation and GST return filing. This process involves the submission of all invoices created by accounting software on to the GST Portal so as to confirm them during the return filing process.
Since the invoices created by different GST return billing software have different formats, it was difficult to retrieve all the invoices on to the GST system by the software. So, the Government of India decided to introduce a typical format, which is must to be followed by all accounting software that will make it easy to upload all invoices to the GST portal for authentication and validation.
So we can here say that, E-invoice is a standard process or schema for data interchange between different GST billing software of different manufacturers.
Note: As per the new announcement made by the government, E-invoicing will be mandatory for all businesses w.e.f 1 April 2022.
Let’s see the steps to generate e-Invoice
The taxpayer or business owner is the person who is responsible to generate the invoice/s and then submit them to Invoice Registration Portal (IRP) for approval for further process. After successful verification from the officials, the invoices are returned to the supplier along with a unique reference number, a QR code & a digital signature from the portal. The e-invoice will also be shared with the corresponding buyer on the email id provided.
Step 1: Creation of Invoice
The seller creates the invoice in the prescribed format (e-invoice schema) having all the mandatory details with the accounting or billing software.
The supplier’s accounting software will generate a B2B invoice in the JSON format. The JSON file is then directly uploaded to the IRP from the software.
Step 2: Generation of IRN
In the next step, a unique Invoice Reference Number (IRN) will be generated by the seller using a standard hash-generation algorithm.
Step 3: Uploading the Invoice
Now, the seller will upload each invoice in JSON format, along with invoice reference number, to the Invoice Registration Portal, either directly or through third-party software.
Step 4: Authentication
Invoice Reference Portal will validate the hash/IRN attached with JSON or generate an IRN if it is not already uploaded by the supplier.
Then, it will verify the file against the central registry of GST. Upon successful authentication, it will add its signature on the invoice with a QR code.
Now the Hash which was generated earlier will become the new IRN of the E-invoice. It will become the unique reference identity of that e-invoice for the complete financial year.
Step 5: Data Sharing
The uploaded data will be shared with the E-way bill portal and GST portal.
Step 6: Downloading E-Invoice
The seller will receive the digitally-signed JSON file along with IRN and QR code from the portal. Apart from this, the buyer will also receive the invoice on to the registered email id.
How is the GST E-invoicing System Beneficial?
The most important benefit of e-invoicing in that the reporting and authentication of B2B invoices from the common portal are done, which ensures that GST ANX-1 and ANX-2 are auto-prepared in the new format. GSTR 1 for B2B supplies is also auto-prepared.
- E-invoices are also used for creating e-way bills by providing only vehicle details.
- Invoices transferred by vendors for verification will be consequently imparted to purchasers for compromise.
- The e-Invoice software will auto-match input credit liability with output tax.
- E-invoice can be made for Debit/Credit Notes, Invoices, and other other documents.
Introduction of IRP on GST E-invoicing
As per the new amendments ‘e-Invoicing’ or ‘electronic invoicing’ is all set to be mandatory from 1st April 2021 for all B2B and B2G transactions for big, medium-sized & small taxpayers. The e-Invoice registration facilities in the Invoice Registration Portal (IRP) is provided by the National Information Centre via API mode along with other modes. These APIs enable GST Suvidha Providers & taxpayers combine their business systems & procedures with the e-Invoice process for the easy and error-free registration and generation of the invoices on their systems.
IRN portal also helps the developers to simulate the end-to-end use of APIs. This includes the comprehension of the generation of request payloads, the encryption and decryption of the requests & responses and evaluation for the accuracy of encryption.
If you want to stay updated with the latest changes in the taxation system, it is must to have a software which is capable of handling all everything related to GST & e-invoicing. Marg ERP is one such software which is ready with GST & e-invoicing solution. Marg GST software lets you generate e-invoices directly from the software & also uploads it directly on the GST portal for return filing from the software.