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The e-invoicing system was implemented from 1st October 2020. It applies to those taxpayers with an annual turnover exceeding Rs.500 crore. From 1st January 2021, it also became applicable to taxpayers having an aggregate turnover exceeding Rs.100 crore in any preceding financial year starting from 2017-18. Similarly, it has been extended to businesses with a turnover of more than Rs.50 crore from 1st April 2021.
The government recently extended the e-invoicing applicability to businesses with more than Rs 20 crore turnover w.e.f 1st April 2022.
Pro Tip: Get up and running with e-Invoicing in 3 minutes Request a free demo
In this article, let us look into the requirements of Digital Signature on an e-invoice and how to meet the same.
Latest Update on e-invoicing
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.
24th February 2022
The e-Invoicing system will get extended to those annual aggregate turnover of more than Rs.20 crore up to Rs.50 crore starting from 1st April 2022, vide notification no. 1/2022
30th June 2021
The CBIC has 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 30th September 2021.
1st June 2021
CBIC has notified vide Central Tax Notification no.23 dated 1st June 2021 that the e-invoicing system shall not apply to a government department and local authority.
30th March 2021
The CBIC has 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 30th June 2021, provided the said person complies with the provisions of the said notification from 1st July 2021.
Digital Signature Certificate (DSC) is a means of electronically signing documents to verify the authenticity of the person signing. It can be substituted for a physical handwritten signature. DSC is valid only if it is created as per the provisions laid down under the Information Technology Act, 2000.
The CGST Rules require all invoices (including credit notes/debit notes) to be physically signed by an authorised representative of the entity issuing the invoice. However, such a person may also place his digital signature if it is affixed as per the provisions of the Information Technology Act, 2000.
The e-invoicing system requires a supplier to upload the JSON of the invoice onto the Invoice Registration Portal (IRP). The JSON will have to follow specific mandatory and optional parameters while reporting the invoices. The digital signature is one of the optional parameters in this case. The IRP will generate the hash (Invoice Registration Number or IRN), and then digitally sign the JSON if it is deemed to be valid, using its private key. If the signed JSON is tampered with, then e-invoice will become invalid and the digital signature will fail.
Once the e-invoice is signed by the IRP, it will be a valid e-invoice to be used by the seller for his business transactions. The IRP will also forward this digitally signed e-invoice to the GSTN and the e-way bill system.
As mentioned earlier, the JSON of the invoice is required to be uploaded onto the IRP with the digital signature being one of the optional parameters. Once the IRP validates the invoice, it will digitally sign the JSON and generate a QR code. When the supplier provides a printed copy of his invoice to the recipient, he will have to disclose the QR Code, his digital signature and the Invoice Reference Number (IRN) generated by the IRP.
The disclosure of the QR code and digital signature of the supplier is not interchangeable but have to be disclosed separately.
Ensure that the necessary software for reading the DSC is present and also that the ‘emSigner’ tool from the GST portal is installed and running.
Step 1: There are various ways of generating an invoice in the prescribed JSON format – for example, offline utilities, mobile apps, etc. After doing so, we need to log in to the IRP and attach the JSON.
Step 2: Click on the button ‘Verify using DSC’. A dialogue box will open up, showing the various digital signatures available.
Step 3: Select the appropriate Digital Signature and click on ‘Sign’. Ensure that the DSC belongs to the Authorised Signatory as registered on the GST portal. The utility may prompt you to enter the password for the DSC.
Step 4: A success message will appear, indicating that the attaching of the Digital Signature Certificate was successful. Press OK/proceed.