How to use Digital Signature for an e-Invoice

The e-invoicing system was implemented on 1st October 2020 for more than Rs.500 crore turnover. It later became applicable to those with a turnover over Rs.100 crore and thereafter to those with more than Rs.50 crore turnover. From 1st Apr 2022, it had become applicable to taxpayers having an aggregate turnover exceeding Rs.20 crore in any preceding financial year starting from 2017-18. It currently applies to those taxpayers with an annual turnover exceeding Rs.10 crore from 1st October 2022. From 1st August 2023, it shall also apply to taxpayers with an annual turnover more than Rs.5 crore up to Rs. 10 crore.

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

10th May 2023
CBIC notified the sixth phase of e-invoicing for taxpayers with more than INR 5 Crore turnover in any financial year from 2017-18 w.e.f 1st August 2023.

6th May 2023
The GST Network has deferred the implementation of fixing time limit of 7 days to report 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.
 

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 is 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 a 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 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.

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 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.

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 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.