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Invoice Reference Number (IRN) in e-Way bill system

Updated on: Dec 2nd, 2022 - 5:49:09 AM

6 min read

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GST brings transparency and develops mutual trust between the Revenue and the taxpayers. Most of the compliance process- return filing, registration, and sometimes even proceedings intend to happen without meeting a tax officer in person! Let us now focus on one of GST’s new tools to achieve its objective-an Invoice Reference Number(IRN).

How does IRN help?

Under normal circumstances, three sets of invoices are issued as follows:

  • Original for the buyer
  • Duplicate for the transporter
  • Triplicate for the seller

Instead of the above paperwork, a transporter may opt for IRN as it digitizes the revenue process at the check posts. It reduces the waiting time for the transporter at the revenue check post and helps taxing authorities keep track of the goods being transported. There is no risk of losing an invoice if an IRN is generated.

What is an Invoice Reference Number (IRN)?

An IRN is a number that a GST-registered taxpayer may generate from the e-way bill portal by uploading an invoice in Form GST INV- 01. This will be valid for a period of 30 days and can be used instead of a physical tax invoice. Hence, IRN is a boon for transporters who transport multiple consignments, where otherwise, the documentation would have been burdensome.

IRN tries to ease the process of documentation to a great level. IRN also serves a dual purpose where a taxpayer can get Part A of his E-way bill auto-populated on generating it.

The detailed format of the form to obtain IRN

Let’s now understand what the GST INV-1 looks like and what are the different details that must be filled in it. Let us group the form into four parts for a better understanding.

Part A

Form GST INV-01 - Part A

Form GST INV-1 is like any other form under the GST Law and begins with the basic details of the taxpayer/ supplier. The following are the contents of Part-A: 1. GSTIN and the supplier’s name are auto-populated. 2. The address of the registered place of business or principal place of business needs to be entered. 3. Enter the Serial number and the date of the invoice.

Part B

Form GST INV-01 - Part B

Part B section requires the taxpayer to fill in details about the recipient. The following details need to be entered:

  • The GSTIN (in case of a registered taxpayer) or a UIN (in case the recipient is an embassy or UN organisation)
  • The name of the recipient and consignee
  • Address and the state code of the recipient and consignee. The state code is the code that forms the first two digits of the GSTIN. For example, the state code for Karnataka would be 29 and so on.
  • The column details of the consignee are the same as the details of the recipient if both the parties being billed and the goods being delivered to are the same. However, in some cases, the GSTIN of both the recipient and consignee can be the same but with different addresses. In other cases, Parties billed and shipped to can have different GTINs.
    For example, in case the goods are not received by the recipient and should be sent to the factory of the job worker or to a third party as directed by the recipient buyer or the factory of the buyer is in a different State.

Part C

Form GST INV-01 - Part C

Part C consists of details of the type of supply that the taxpayer is making. Regarding the transaction, whether the supply is a B to B supply( Business to Business) or a B to C supply( Business to customer) must be declared.

Part D

Form GST INV-01 - Part D

Part D consists of all information related to the consignment of goods billed. It includes the following:

  • The description of goods and the HSN code.
  • The quantity and unit price, after which the taxable amount for calculating GST is determined.
  • After we have the taxable amount, it is important for us to know the GST type that would be applicable to us. Based on the type of transaction (inter-state or intra-state), CGST, SGST AND UTGST will be calculated.
  • Freight, insurance & Packing and forwarding charges must be declared as stated in the Tax Invoice. After filling up the form, upload it on the e-way bill portal, and an IRN will be generated, which can be used by the taxpayer and transporter in future.

Implementation status

Although IRN has not been implemented and the taxpayers lie in the grey area, it is very clear that the Revenue has implemented multiple checkpoints to prevent tax leakage. This is noticeable in all forms based on similar lines (details in the Form GST INV 1 are similar to GSTR 1, for example).

Therefore, it becomes the taxpayer’s responsibility to furnish accurate details and helps prevent any mismatch. Though the IRN was introduced to reduce the formalities at checkpoints, unless it’s actually used, we will never reap its benefits of it.  

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