GST E-Invoicing API : Who can get APIs of e-Invoices, Pre-requisites and Best Practices

API (Application Programming Interface) is a software intermediary which allows two applications to interact with each other.

Latest Update
10th May 2023
CBIC notified the sixth phase of e-invoicing. Henceforth, taxpayers with INR 5 Crore+ turnover in any financial year from 2017-18 must issue e-invoices w.e.f 1st August 2023.

6th May 2023
The GST Network has deferred the implementation of rule to fix time limit of 7 days for reporting the old e-invoices on the IRP portals by three months. Further, the department is yet to announce the new implementation date.

13th April 2023
The GSTN released an advisory on 12th and 13th April 2023 stating that taxpayers with an annual turnover of Rs.100 crore and more must report tax invoices and credit-debit notes to the IRP within 7 days from the date of issue of the invoice/CDN from 1st May 2023.

1st August 2022 
The e-Invoicing system for B2B transactions has now been extended to those with an annual aggregate turnover of more than Rs.10 crore up to Rs.20 crore starting from 1st October 2022, vide notification no. 17/2022.

What does API mean and who can use API?

With regard to the e-invoicing system, APIs facilitate the communication and exchange of data between taxpayers or GSPs (GST Suvidha Providers), and the e-invoice system. For the government to create a platform to provide GST services to taxpayers, two separate software components will need to interact with each other as per the API specifications. The e-invoice system uses RESTful web services to provide various taxpayer functionalities such as filing of returns, registration, viewing ledgers, making online payments, etc.

Users of API

Taxpayers and GSPs can use API to adhere to various GST compliances. Listed below are the categories of taxpayers that are eligible to use APIs to generate e-invoices:

*Turnover is earned anytime from 2017-18 till 2021-22. Exemption from e-invoicing and QR code generation has been granted to sectors such as insurance and banking, financial institutions, NBFCs, GTA, passenger transportation services and movie tickets.

What is the purpose of using APIs under GST?

Taxpayers’ convenience is key for the successful implementation of GST. They can use third-party applications that provide a variety of interfaces on desktops, laptops and mobiles to connect with the GST filing system. These third-party applications connect with the GST filing system via GST APIs thus, enhancing the taxpayers’ convenience.

Under e-invoicing, taxpayers will generate e-invoice under their respective ERP software and will report the same on the Invoice Registration Portal (IRP). The IRP has constructed the e-invoice process through an API mode. The GSPs/taxpayers can integrate these APIs into their existing ERPs and can generate e-invoice directly through their system. 

Types of APIs

At present, seven different APIs are available:

1. Authentication 
2. Generate Invoice Reference Number (IRN) 
3. Cancel IRN 
4. Get IRN details
5. Generate e-way bill by IRN 
6. Get GSTIN details 
7. Cancel e-way bill 
8. Sync GSTIN details from CP (Common Portal)
9. Get e-way bill details by IRN
10. Get IRN details by document details
11. Health API

How does API help in generating an e-invoice?

API plays an important role in the generation of an e-invoice. A taxpayer needs to enter the details of their invoice into their accounting system. The data is then sent through the API to the Invoice Registration Portal (IRP).

The invoice gets registered under the IRP, an IRN gets generated, and the invoice is sent back to the taxpayer along with the digitally signed e-invoice and QR Code. The taxpayer’s system prepares the invoice for print, which contains the IRN and the QR Code embedded in it.

What are the benefits of using APIs?

1. APIs provide a smooth integration between the ERP  / accounting system of the taxpayer and the e-invoice system.
2. As the outward supply invoices are first entered in the ERP of the taxpayer and then passed on to the e-invoice system, APIs will avoid the duplicate or double entry of an invoice/IRN.
3. APIs help in eliminating data entry errors in the e-invoices.
4. It enables the taxpayer to enter the data just once in their ERP, and thereafter the APIs will transfer this data to the e-way bill and GST portals.

Prerequisites for using API for e-invoice

Following are the prerequisites to use e-invoicing APIs:

1. Taxpayers/GSPs need to automate their process of invoice generation.
2. It is a must for GSPs/taxpayers to ensure that the traffic originating from their end and landing to the e-invoice system is free from viruses, malware, intrusions, bots, etc. In case, NIC detects any malicious traffic, it may suspend the service.
3. GSPs/taxpayers must adhere to all the IT Security standards and regulatory requirements as per the Government of India.
4. GSPs/taxpayers should meet the security requirements as specified by http://www.cert-in.org.in/ for application and infrastructure.
5. GSPs/taxpayers must comply with the Information Technology Act 2000 (including 43A) and the amendments thereof.
6. Taxpayers/GSPs have to list at least four Indian Static IP addresses to access the production environment.
7. Pre-production system for testing is a must in order to use different types of activities or services.
8. GSPs/taxpayers will need to test their modified systems on the e-invoice pre-production site with all types of activities/services.

What happens when you use third-party applications for e-invoicing and in case, you have your own set-up?

There is a three-level interaction in case one uses application service providers (ASP) for generating IRN. The ASP pulls out invoice data from the client’s accounting or billing system and thereafter, puts the data in the required format to be sent to the IRP. The interaction happens via APIs. This model is comparatively an attractive option for most of taxpayers due to the cost-effectiveness involved.

On the other hand, if the taxpayer has his own ERP system that can interact with the IRP via APIs, it can easily communicate with IRP for the generation of IRNs. However, such a set-up is expensive.