E-Invoice is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal. Under the electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP) to be managed by the GST Network (GSTN).

All invoice information will be transferred from this portal to both the GST portal and e-way bill portal in real-time. Therefore, it will eliminate the need for manual data entry while filing GSTR-1 returns and generation of part-A of the e-way bills, as the information is passed directly by the IRP to the GST portal.

The e-invoicing system applies to the GST registered persons whose aggregate turnover in the financial year exceeds Rs. 50 crores. From 1st April 2022, it shall apply to those with a turnover of more than Rs. 20 crores.

However, irrespective of the turnover, e-Invoicing shall not be applicable to the following categories of registered persons for now, as notified in CBIC Notification No.13/2020 –

  • SEZ units
  • The insurer or a banking company or a financial institution, including a non-banking financial company.
  • Goods transport agency supplying services in relation to transportation of goods by road in a goods carriage.
  • Suppliers of passenger transportation service.
  • Suppliers of services by way of admission to an exhibition of cinematograph films on multiplex screens.

E-invoicing benefit business-

  • E-Invoice resolves and plugs a major gap in data reconciliation under GST to reduce mismatch errors.
  • E-Invoices created on one software can be read by another, allowing interoperability and helping reduce data entry errors.
  • Real-time tracking of invoices prepared by the supplier is enabled by e-invoice.
  • Faster availability of genuine input tax credit.


Steps to generate an e-invoice

Step 1 – Creation of the invoice on the taxpayer’s ERP

The taxpayer will continue to generate invoices in the normal course of business. However, the reporting of these invoices electronically has criteria. It needs to be done as per the e-invoice schema along with mandatory parameters.

The seller has to ensure that his accounting/billing software is capable of generating a JSON file of the final invoice. The seller can create a JSON file following the e-invoice schema and mandatory parameters by using the following modes:

  • An accounting and billing system that offers this service
  • A utility to interact with the accounting/billing system, or ERP, such as an excel/word document or a mobile app
  • An offline Tool to generate e-invoices by keying-in invoice data

Step 2 – Generation of the unique IRN

The IRN (also known as hash) is a unique number that is generated by the e-invoice system using a hash generation algorithm. For every document submitted, a unique 64 character IRN will be generated. At present, the e-invoice system provides the two modes to generate the IRN (Invoice Reference Number), i.e offline and API.

Using the offline tool

The invoices can be uploaded in the standard format and the IRN can be generated in one go. Users can visit the e-invoice portal, and view the procedure for preparing a bulk upload request for IRNs at Help -> Tools -> Bulk Generation tools. Once the bulk upload request file has been prepared, the same needs to be uploaded in order to generate the IRNs. Once generated, the IRN form will all the details can be downloaded.

Using API (Through direct integration)

Using API through direct integration, the taxpayers’ systems can be directly integrated. The taxpayer will need to get registered on the e-invoice portal if not already registered. If registered on the e-way bill portal, the same login credentials can be used. If not, he will need to get API registration done using IP whitelisting. If a sister concern having the same PAN has already registered for API and has had IP whitelisting done, the same client-ID credentials can be used.

Step 3 – Generation of the QR Code

The e-invoice system will generate the IRN, and then digitally sign the e-invoice and the QR code (quick response code). The QR code will enable a quick view, validation, and access of the invoices from handheld devices.

The digitally signed QR code will have the unique IRN (hash) which can be verified on the central portal, as well as by offline apps.

Back-end processing of a valid e-invoice

The signed e-invoice data will be sent to the GST system where GSTR-1 of the supplier and GSTR-2B/2A of the buyer will be updated based on the details entered in the invoice. Wherever applicable, details of invoices will be used to update ‘Part A’ of the E-Way Bill. As a result, only the vehicle number needs to be entered in ‘Part B’ of the E-Way Bill system to create an E-Way bill.

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