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How to use Digital Signature for an e-Invoice

Updated on

The e-invoicing system will be applicable from 1 October 2020. Earlier it was scheduled to kickstart from 1st April 2020 making it compulsory for entities with an annual turnover of more than Rs 100 crore.

In this article, let us look into the requirements of Digital Signature on an e-invoice and how to meet the same.

  1. What is DSC?
  2. Use of DSC before e-invoicing system
  3. Use of DSC under the e-invoicing system
  4. Requirement and applicability of DSC
  5. How to attach a digital signature to an e-invoice?

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, etc.

What is DSC?

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 created as per the provisions laid down under the Information Technology Act, 2000. 


Use of DSC before e-invoicing system

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 person may also place his digital signature if it is affixed as per the provisions of the Information Technology Act, 2000. 


Use of DSC under the e-invoicing system

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 also sign the JSON if it is deemed to be valid, using its private key. The IRP signs the complete e-invoice JSON payload (having the IRN/hash). If the signed JSON is tampered with, then e-invoice will become invalid and the digital signature will fail. 


Requirement and applicability of DSC

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 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 supplier is not interchangeable but have to be disclosed separately. 


How to attach a digital signature to an e-invoice?

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 JSON format – for example, offline utilities, mobile apps, etc. After doing so, we will need to log on to the IRP’s website 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.