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What is e-Invoicing?

e-Invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices are authenticated electronically on the Invoice Registration Portal (IRP) for further use on the common GST portal.

What is the applicability of e-invoicing?

e-Invoicing was made applicable to businesses with turnover exceeding Rs.500 crore from 1st October 2020. It has been extended to businesses with turnover exceeding Rs.100 crore from 1st January 2021. Recently, the government notified that businesses with more than Rs.50 crore turnover have to comply with e-invoicing from 1st April 2021. It is important to note that the taxpayer should comply with e-invoicing if their turnover exceeds the specified turnover in any financial year from 2017-18 onwards.

What is the e-invoicing schema?

e-Invoice schema is the standard for issuing e-invoices, which lists the mandatory and optional fields in the e-invoice and the descriptions and explanatory notes for each field.

What is the e-Invoice Registration Portal (IRP)?

The e-invoices generated need to be reported to an Invoice Registration Portal (IRP), which will then validate the invoice and return it along with an Invoice Reference Number (IRN) and QR Code digitally signing it.

What is an Invoice Reference Number (IRN)?

An Invoice Reference Number (IRN) is a unique code issued for every e-invoice (it is a hash-based on three parameters) in technical terms. It is a combination of the supplier GSTIN, invoice number and financial year.

What are the advantages of e-invoicing?

• Minimal data entry errors
• Interoperability of e-invoices
• Reduced effort in GST return filing
• Auto-creation of e-way bills
• Genuine ITC claims by buyers
• Reduced fraud and tax evasion
• Real-time tracking of e-invoices
• Easy verification by tax authorities

What type of documents are covered under e-invoice?

• B2B invoices issued by the supplier (including RCM transactions)
• Credit notes issued by the supplier pertaining to B2B invoices
• Debit notes issued by the supplier pertaining to B2B invoices
• Any other document as required by the law from time to time

Is it mandatory to generate the IRN?

The invoice will be considered invalid if it does not contain an IRN. Hence, it is suggested to immediately upload invoices to the IRP on a real-time basis so that the IRN can be generated and placed on the invoice.

Can IRNs be generated in bulk?

Yes, IRNs can be generated in bulk on the IRP. Even though the taxpayer uploads invoices in bulk, the invoice’s approval will be done one at a time. The IRP will be able to handle a large sequence of invoices for registration and validate them. Essentially, bulk upload of invoices will be required by large taxpayers who generate a large number of invoices. Their ERP or accounting system will have to be designed so that it makes requests one by one. For the user, it will not make any difference.

What is the end-to-end workflow of an e-invoice like?

• Step 1: Generation of the invoice on the taxpayer’s respective ERP system
• Step 2: Generation of IRN (can be done on the respective ERP or through the IRP)
• Step 3: Upload the JSON file of the e-invoice (along with hash/IRN, if generated) to the IRP for validation
• Step 4: The IRP will generate/validate the hash/IRN and will add a digital signature and QR code, and return the JSON to the taxpayer
• Step 5: The IRP will share this invoice data with the e-way bill system and the GSTN

What indicates that the IRP has approved the e-Invoice?

When the IRP returns the signed JSON along with the QR code, it can be considered that the IRP has approved the e-invoice. The QR code will contain the GSTIN of the supplier, the buyer, the invoice number and date, HSN codes of major commodities, IRN, etc. (Note: The QR code will not have the status of an invoice.)

Can the IRP reject the submitted e-Invoice?

The IRP will validate the e-invoice and reject it if the GSTIN is wrong. A duplicate invoice number is found, or any other errors will return the invoice with the relevant error codes without registering the same.

What are the validations conducted by the IRP?

The IRP will validate for GSTIN correctness and whether the invoice already exists in the system. The IRP also validates all the data submitted via the JSON file.

Does the IRP provide an archiving facility?

No, the details will be stored in the IRP for only 24 hours, after which the same will be available in the GSTN in the GSTR-1 return.

Will the IRP return the signed invoice PDF/mail it to the respective supplier and buyer?

No, the IRP will only return the signed JSON to the respective supplier, and the IRP will do no sharing of PDF copies or mailing of JSONs/PDFs to the respective supplier and the buyer. The PDF copy of the invoice can be generated by the supplier using the QR code that the IRP returns.

Is the supplier allowed to send the e-invoice to the buyer?

Yes, the supplier is also allowed to send the JSON and the PDF to the buyer. Further, the supplier can also share/distribute a business invoice to the buyer (having multiple fields as per the business’ needs). However, it needs to ensure that the business invoice contains all the mandatory fields prescribed in the e-invoice schema.

Is the printing of an e-invoice PDF mandatory?

No, with machine readability, the need for printing will be eliminated. Moreover, the QR code will enable easy validation of the contents of an e-invoice.

Is the QR code required to be printed on the invoice?

It is mandatory to print the QR code on the e-invoice. Even if a business prints the invoice in its format, it still needs to contain the QR code returned by the IRP, as this QR code will also contain the IRN.

Will non-tax invoices/documents be subjected to IRN?

No, bills of supply and delivery challans will not be required to have an IRN.

Is an IRN required for ISD and export transactions?

ISD invoices and ISD credit notes will be issued by an Input Service Distributor (ISD), and no IRNs will be required on the same. On the other hand, exporters have to issue tax invoices and would be required to generate IRNs.

Are importers required to generate IRNs?

e-Invoicing/IRN generation is only applicable to creators of an invoice/document, and hence, a bill of entry will not be required to have an IRN.

What is the process of amendment/cancellation of an e-invoice?

e-Invoices reported to the IRP can be amended through the GSTN, and no amendment is permitted through the IRP. Cancellation of e-invoices can be made within 24 hours post generation. Once cancelled, the same number cannot be used for any other invoice. In case of cancellation of an e-invoice, it can be done using the acknowledgement number or IRN as per the availability.

Will the e-Invoice be mapped to the GSTR-1 by the IRP?

Yes, the IRP will push the data to the GST portal, and the data will be populated in GSTR-1 of the seller.

Is it possible to have more than one QR code on the e-invoice?

Yes, but the seller needs to properly annotate them to clarify which QR code represents which e-invoice.

Large businesses (> 500 crore) have both B2B and B2C transactions. Are they required to generate and print QR codes on both B2B and B2C invoices?

Yes, for the B2B e-invoices, the IRP will generate the QR code. For the B2C e-invoices, the taxpayer has to generate the QR code using their algorithms internally. It is important to note that only specified entities need to generate QR code for B2C invoices.

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