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All about Invoice Reference Number (IRN)

Updated on

IRN known as Invoice Reference Number is a unique number alloted by Government to tag and identify every valid e-invoice generated in India, being implemented from 1st October 2020.

The e-invoicing system has been introduced to create a standard for all e-invoices generated. In this article, we will be dealing with the following aspects about Invoice Reference Number (IRN) in an e-invoice:

 

Latest Updates

Update as on 29th November 2020

The CBIC issued a notification seeking to waive the penalty imposed on non-compliance of dynamic QR code provisions for B2C invoices between 1st December 2020 and 31st March 2021, provided the eligible registered person complies with these provisions from 1st April 2021.

Update as on 10th November 2020

The taxpayers having an aggregate turnover exceeding Rs.100 crore should implement e-invoicing from 1st January 2021.

Update as on 1st October 2020

The applicable taxpayers have been given a grace period of 30 days for generating an Invoice Reference Number (IRN). However, this grace period is valid for the invoices issued between 1st October 2020 to 31st October 2020.

Update as on 30th September 2020

Now, the aggregate turnover should be checked from FY 2017-18 till FY 2019-20, for checking the applicability of e-invoicing. Also, the date of implementation of the dynamic QR Code for B2C invoices has been extended until 01.12.2020.

Update as on 30th July 2020

  1. A new refined format of e-invoice has been notified by CBIC adding 20 new fields and removing 13 fields. Certain fields have undergone changes in character length as well.
  2. e-Invoicing system shall apply to those taxpayers with annual turnover exceeding Rs 500 crore instead of Rs 100 crore.
  3. Special Economic Zones (SEZ) units shall also be exempted from issuing e-invoices.

Update as on 23rd March 2020

The implementation of e-invoicing and the QR code has been deferred to 1st October 2020.

Exemption from e-Invoicing and QR code has been granted to sectors such as the insurance, banking, financial institutions, NBFCs, GTA, and passenger transportation service and movie tickets.

What is an Invoice Reference Number (IRN)?

The Invoice Reference Number (IRN) is a unique number (also known as hash) generated by the Invoice Registration Portal (IRP) using a hash generation algorithm, under the e-invoicing system. For every document such as an invoice or debit or credit note to be submitted on the Invoice Regsitration Portal, a 64 character invoice reference number shall be generated.

This number shall be unique for every invoice raised in a financial year by a GSTIN in the entire GST system. Further, every invoice being issued by supplier to his recipient must contain the IRN.

The tax officers can verify the genuineness of the transaction using invoice reference number through the central portal as well as an offline app. It will, in turn, help them check the invoice even where internet may not be accessible.

 

What is the hash generation algorithm in IRN?

A hash generation algorithm is a function that converts a message or a string consisting of characters (alphabets + numbers + certain special characters) into a series of numbers such that the resulting numbers cannot indicate the original message.

The GSTN will prescribe this algorithm as part of the e-invoicing standard.

 

What are the parameters used to generate Invoice Reference Number (IRN)?

IRN is generated by converting characters into numbers (also called ‘hash’) using a hash generation algorithm. This algorithm will be applied to the following three parameters:

  1. Supplier GSTIN
  2. Supplier’s document number. For example, invoice number
  3. The financial year in ‘YYYY-YY’ format. For example 2019-20.

 

When is the Invoice Reference Number (IRN) generated?

The IRN generation will be required at the time of issuing the invoice or credit note or debit note by the seller.

However, the taxpayers having more than Rs.500 crores turnover have been given a grace period of 30 days from 1st October 2020 for generating an IRN. This grace period is valid for the invoices issued between 1st October 2020 to 31st October 2020.

The invoices under the e-invoicing system will continue to be prepared using any software that a business entity uses to generate invoices. However, they will have to conform to the prescribed standard and parameters.

The entity can choose either of the following two options to generate IRN:

Option 1: Using the Excel offline tool.

 

Option 2: Through API integration directly with the e-invoice portal/IRP or via GST Suvidha Provider.

For more details about how IRN is generated, read our article on How to generate IRN?

Note: In both the cases, the IRP will perform a de-duplication check where the IRN so generated will be checked against the Central Registry of the GST System (containing all generated/uploaded IRN) to ensure that all IRN remain unique.

Frequently Asked Questions on IRN

Can I regenerate a new IRN for an invoice against which IRN was already generated?

A: No, it is not possible as only unique invoice will be accepted on invoice registration portal. For this purpose, the e-invoice system does a check with the Central Registry of GST system for any duplication.

How long will the IRN be stored on the government portal?

A: The IRN which is generated on the e-invoice system shall be made available to the taxpayer for upto 24 hours

What are the prerequisites to generate an IRN?

A: Following are the prerequistes:

  1. The user must be GST registered taxpayer, having login created on GST portal and e-invoice system or e-way bill portal.
  2. Invoice or debit note or credit note details must be at hand.
  3. Depending upon the mode of generation, such user must have bulk IRN generator offline tool downloaded on the system or must have created API user ID and set the password on the e-invoice system.

Will both invoice number and IRN required to be mentioned on the e-invoice?

A: Yes, both are mandatory fields as per the e-invoice schema notified by the CBIC on 30th July 2020.

 

For more information about e-invoicing system, read our articles: