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GST E-Invoicing API : Who can get APIs of e-Invoices, Pre-requisites and Best Practices

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Latest Updates

Update as on 14th March 2020*

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

2) 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.

*Subject to CBIC notification

What does API mean and who can use these?

API (Application Programming Interface) is a software intermediary which allows two applications to interact with each other. The government wants to create a platform to provide GST services to taxpayers. Two separate software components interact with each other as per API specifications. In India, GST uses RESTful API to provide various taxpayer functionalities such as filing of returns, registration, viewing ledger, making an online payment, etc. 

Users of API:

Taxpayers and GSPs can use API to adhere to various GST compliances. Listed below are the categories of taxpayers that use API to generate e-invoices:  
Sr.No. Turnover in Previous FY Applicable Date
1 More than Rs 500 crores 7th January 2020 (Voluntary)
2 More than Rs 100 crore but less than Rs 500 crore 1st February 2020 (Voluntary)
3 More than Rs 100 crores 1st April 2020 (Mandatory)

What is the purpose of using APIs under GST?

Taxpayers’ convenience is key to the successful implementation of GST. They can use third-party applications that provide a variety of interfaces on desktops, laptops and mobiles to connect with the GST filing system. These third-party applications connect with the GST filing system via GST APIs thus, enhancing the taxpayers’ convenience. Under e-invoicing, taxpayers will generate e-invoice under their respective ERP software and will report the same on the Invoice Registration Portal (IRP). The IRP has constructed the e-invoice process through an API mode. The GSPs/taxpayers can integrate these APIs into their existing ERPs and can generate e-invoice directly through their system. 

Types of APIs

At present, six different APIs are available:
  1. Authentication 
  2. Generate Invoice Reference Number (IRN) 
  3. Cancel IRN 
  4. Get e-invoice details 
  5. Get GSTIN details 
  6. Health Check 

How does API help in generating an e-invoice?

API plays an important role in the generation of an e-invoice. A taxpayer just needs to enter the details of their invoice into their accounting system. The data is then sent through the API to IRN. Invoice gets registered under the IRN and sent back to the taxpayer along with the digitally signed e-invoice and QR Code. The taxpayer’s system prepares the invoice for print, which contains IRN and the QR Code embedded in it.

Prerequisites for using API for e-invoice

Following are the prerequisites to use e-invoicing APIs:
  1. Taxpayers/GSPs need to automate their process of invoice generation.
  2. It is a must for GSPs/taxpayers to ensure that the traffic originating from their end and landing to the e-invoice system is free from viruses, malware, intrusions, bots, etc. In case, NIC detects any malicious traffic, it may suspend the service.
  3. GSPs/taxpayers must adhere to all the IT Security standards and regulatory requirements as per the Government of India.
  4. GSPs/taxpayers should meet the security requirements as specified by http://www.cert-in.org.in/ for application and infrastructure.
  5. Taxpayers/GSPs have to list at least four Indian Static IP addresses to access the production environment.
  6. Pre-production system for testing is a must in order to use different types of activities or services.

What happens when you use third-party applications for e-invoicing and in case, you have your own set-up?

There is a three-level interaction in case one uses application service providers (ASP) for generating IRN. The ASP pulls out invoice data from the client’s accounting or billing system and thereafter, puts the data in the required format to be sent to the IRP. The interaction happens via APIs. This model is comparatively an attractive option for most of the taxpayers due to the cost-effectiveness involved. On the other hand, if the taxpayer has his own ERP system that can interact with the IRP via APIs, it can easily communicate with IRP for IRN. However, such a set-up is expensive.