Step-by-Step Guide to Generate E-invoice Under GST

The scheme of E-invoice was officially approved by the GST Council in the 37th Council Meeting. If you are looking to generate an e-invoice under GST, this is the step-by-step guide to help you.

What is GST E-invoice?

E-invoice is not an invoice that you can download or generate through the GST Portal, but it is a process of validating all the B2B invoices electronically by the GST Network (GSTN). It’s not feasible to generate e-invoices directly from the common portal.

E-invoicing or authentication is required to ensure that the invoices generated by your accounting software are valid to be used for processes like e-way bill creation and GST return filing. The process involves the submission of business invoices created by different accounting software to the GST Portal in order to get them verified in a common manner.

Since the invoices are created by different GST return filing software and may have different formats, they cannot be all fetched directly to the GST system by the software. So, the government decided to introduce a standard format (Schema), which requires all the accounting software to follow a common format which can then be uploaded to the GST portal for authentication and validation.

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To sum up, an E-invoice is a standard mechanism or schema for data exchange between different GST billing software of different manufacturers.

How is the GST E-invoicing System Beneficial?

• Reporting and authentication of B2B invoices from the common portal will ensure that GSTR-1 for B2B supplies are auto-prepared in the new format.
• E-invoicing can be further used for creating e-way bills by providing only vehicle details.
• Invoices uploaded by suppliers for authentication will be automatically shared with buyers for reconciliation.
• The system will auto-match input credit liability with output tax. E-invoices can be created for Debit/Credit Notes, Invoices, and other eligible documents.
• E-invoices can be created for Debit/Credit Notes, Invoices, and other eligible documents.

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Introduction of IRP on GST E-invoicing

‘e-Invoicing’ or ‘electronic invoicing’ is all set to be implemented mandatory from 1st October 2020 for B2B and B2G transactions for big and medium-sized taxpayers. National Information Centre has provided the e-invoice registration facilities in the Invoice Registration Portal (IRP) via API mode along with other modes. These APIs enable taxpayers & GSPs to combine their business systems & procedures with the e-invoice mechanism for the easy and glitch-free registration and generation of the invoices on their systems.

Invoice Registration Portal (IRP) also facilitates the developers or taxpayer’s system integrator to understand the integration of the e-Invoicing system with their business processes and allows user’s registration to access the APIs. IRP facilitates API documentation by providing all the information such as URLs,/calling methods, JSON Schema of the request payloads, sample request payloads & sample responses, validations being applied and akin details which an application developer needs to integrate the 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 the evaluation of the accuracy of encryption.

Let’s Check GST E-invoice Generating Procedure

The taxpayer or business is responsible for generating the invoice/s and then submitting them to the Invoice Registration Portal (IRP) for approval. After successful verification, the portal will return the invoice to the supplier along with a unique reference number, digital signature, and a QR code. The e-invoice will also be shared with the corresponding buyer on the email ID provided.

Step 1: Invoice Creation

The seller/supplier will create an invoice in the prescribed format (e-invoice schema) using his/her accounting or billing software. It must have the mandatory details.

The accounting software of the supplier will generate a JSON for each B2B invoice. The JSON file will be uploaded to the IRP.

Step 2: IRN Generation

The next step would be to generate a unique Invoice Reference Number (IRN) by the seller using a standard hash-generation algorithm.

Step 3: Invoice Uploading

Now, the seller will upload JSON for each of the invoices, along with IRN, to the Invoice Registration Portal, either directly or through third-party software.

Step 4: Authentication and Signing

IRP will validate the hash/IRN attached with JSON or generate an IRN if not already uploaded by the supplier.

Then, it will authenticate the file against the central registry of GST.

Upon successful verification, it will add its signature on the invoice and a QR code to JSON.

Hash generated earlier will become the new IRN of the E-invoice. It will be the unique identity of that e-invoice for the entire financial year.

Step 5: Sharing of Data

The uploaded data will be shared with the E-way bill and GST system.

Step 6: E-invoice Downloading

The portal will send the digitally-signed JSON along with the IRN and QR code back to the seller. The invoice will also be sent to the buyer on their registered email id.

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