An e-invoice is B2B invoice reported by GST-registered business with the e-invoice portal (GSTN), which must adhere to the standard format notified by the CBIC. This article will take you through the process of generation of an IRN for e-invoice and also its workflow.
Latest Updates
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.
Steps to generate an e-invoice
Step 1 – Creation of the invoice on the taxpayer’s ERP
The taxpayer will continue to generate invoices in the normal course of business. However, the reporting of these invoices electronically has criteria. It needs to be done as per the e-invoice schema along with mandatory parameters. The mandatory fields of an invoice for the supply of goods are listed below:
| Sl. no. | Name of the field | List of Choices/ Specifications/Sample Inputs | Remarks |
|---|
| 1 | Document Type Code | Enumerated List such as INV/CRN/DBN | Type of document must be specified |
| 2 | Supplier_Legal Name | String Max length: 100 | Legal name of the supplier must be as per the PAN card |
| 3 | Supplier_GSTIN | Max length: 15 Must be alphanumeric | GSTIN of the supplier raising the e-invoice |
| 4 | Supplier_Address | Max length: 100 | Building/Flat no., Road/Street, Locality, etc. of the supplier raising the e-invoice |
| 5 | Supplier_Place | Max length: 50 | Supplier’s location such as city/town/village must be mentioned |
| 6 | Supplier_State_Code | Enumerated list of states | The state must be selected from the latest list given by GSTN |
| 7 | Supplier Pincode | Six digit code | The place (locality/district/state) of the supplier’s locality |
| 8 | Document Number | Max length: 16 Sample can be “ Sa/1/2019” | For unique identification of the invoice, a sequential number is required within the business context, time-frame, operating systems and records of the supplier. No identification scheme is to be used |
| 9 | Preceeding_Invoice_Reference and date | Max length:16 Sample input is “ Sa/1/2019” and “16/11/2020” | Detail of original invoice which is being amended by a subsequent document such as a debit and credit note. It is required to keep future expansion of e-versions of credit notes, debit notes and other documents required under GST |
| 10 | Document Date | String (DD/MM/YYYY) as per the technical field specification | The date when the invoice was issued. However, the format under explanatory notes refers to ‘YYYY-MM-DD’. Further clarity will be required. Document period start and end date must also be specified if selected. |
| 11 | Recipient_ Legal Name | Max length: 100 | The name of the buyer as per the PAN |
| 12 | Recipient’s GSTIN | Max length: 15 | The GSTIN of the buyer to be declared here |
| 13 | Recipient’s Address | Max length: 100 | Building/Flat no., Road/Street, Locality, etc. of the supplier raising the e-invoice |
| 14 | Recipient’s State Code | Enumerated list | The place of supply state code to be selected here |
| 15 | Place_Of_Supply_State_ Code | Enumerated list of states | The state must be selected from the latest list given by GSTN |
| 16 | Pincode | Six digit code | The place (locality/district/state) of the buyer on whom the invoice is raised/ billed to must be declared here if any |
| 17 | Recipient Place | Max length: 100 | Recipient’s location (City/Town/Village) |
| 18 | IRN- Invoice Reference Number | Max length: 64 Sample is ‘a5c12dca8 0e7433217…ba4013 750f2046f229’ | At the time of registration request, this field is left empty by the supplier. Later on, a unique number will be generated by GSTN after uploading of the e-invoice on the GSTN portal. An acknowledgement will be sent back to the supplier after the successful acceptance of the e-invoice by the portal. IRN should then be displayed on e-invoice before use. |
| 19 | ShippingTo_GSTIN | Max length: 15 | GSTIN of the buyer himself or the person to whom the particular item is being delivered to |
| 20 | Shipping To_State, Pincode and State code | Max length: 100 for state, 6 digit pincode and enumerated list for code | State pertaining to the place to which the goods and services invoiced were or are delivered |
| 21 | Dispatch From_ Name, Address, Place and Pincode | Max length: 100 each and 6 digit for pincode | Entity’s details (name, and city/town/village) from where goods are dispatched |
| 22 | Is_Service | String (Length: 1) by selecting Y/N | Whether or not supply of service must be mentioned |
| 23 | Supply Type Code | Enumerated list of codes Sample values can be either of B2B/B2C/ SEZWP/S EZWOP/E XP WP/EXP WOP/DE XP | Code will be used to identify type of supply such as business to business, business to consumer, supply to SEZ/Exports with or without payment, and deemed export. |
| 24 | Item Description | Max length: 300 The sample value is ‘Mobile’ The schema document refers to this as the ‘identification scheme identifier of the Item classification identifier’ | Simply put, the relevant description generally used for the item in the trade. However, more clarity is needed on how it needs to be described for every two or more items belonging to the same HSN code |
| 25 | HSN Code | Max length: 8 | The applicable HSN code for particular goods/service must be entered |
| 26 | Item_Price | Decimal (12,3) Sample value is ‘50’ | The unit price, exclusive of GST, before subtracting item price discount, can not be negative |
| 27 | Assessable Value | Decimal (13,2) Sample value is ‘5000’ | The price of an item, exclusive of GST, after subtracting item price discount. Hence, Gross price (-) Discount = Net price item, if any cash discount is provided at the time of sale |
| 28 | GST Rate | Decimal (3,2) Sample value is ‘5’ | The GST rate represented as a percentage that is applicable to the item being invoiced |
| 29 | IGST Value, CGST Value and SGST Value Separately | Decimal (11,2) Sample value is ‘650.00’ | For each individual item, IGST, CGST and SGST amounts have to be specified |
| 30 | Total Invoice Value | Decimal (11,2) | The total amount of the Invoice with GST. Must be rounded to a maximum of 2 decimals |
The seller has to ensure that his accounting/billing software is capable of generating a JSON file of the final invoice. The seller can create a JSON file following the e-invoice schema and mandatory parameters by using the following modes:
- An accounting and billing system that offers this service
- A utility to interact with the accounting/billing system, or ERP, such as an excel/word document or a mobile app
- An offline Tool to generate e-invoices by keying-in invoice data
Step 2 – Generation of the unique IRN
The IRN (also known as hash) is a unique number which is generated by the e-invoice system using a hash generation algorithm. For every document submitted, a unique 64 character IRN will be generated. At present, the e-invoice system provides the two modes to generate the IRN (Invoice Reference Number), i.e offline and API. Notified taxpayers who need to generate e-invoices, can generate them using these options:
Using the offline tool
The invoices can be uploaded in the standard format and the IRN can be generated in one go. User can visit the e-invoice portal, and view the procedure for preparing a bulk upload request for IRNs at Help -> Tools -> Bulk Generation tools. Once the bulk upload request file has been prepared, the same needs to be uploaded in order to generate the IRNs. Once generated, the IRN form will all the details can be downloaded.
Using API (Through GSPs integration
Using API through GSP integration, system integration can be done through the help of registered GSPs (GST Suvidha Providers). Before using this mode, the API integration with the identified GSP will need to be tested in a sand-box environment. After the test, the GSP will need to submit the test summary report on the sand-box portal. The GSP will need to be registered on the e-invoice portal if not already registered. If the same GSP is being used as on the e-way bill portal, there is no need to register again, and the same login credentials can be used. An API user will need to be created by entering a username and password. Using these credentials, a token and request for the IRN can be generated.
Using API (Through direct integration)
Using API through direct integration, the taxpayers’ systems can be directly integrated. The API integration will need to be tested in a sand-box environment. After the test, the taxpayer will need to submit the test summary report on the sand-box portal. The taxpayer will need to get registered on the e-invoice portal if not already registered. If registered on the e-way bill portal, the same login credentials can be used. If the taxpayer is already integrated with API on the e-way bill system, the same API credentials can be used. If not, he will need to get API registration done using IP whitelisting. If a sister concern having the same PAN has already registered for API and has had IP whitelisting done, the same client-ID credentials can be used. However, the new API user will need to be registered.
Using API (Through an enabled sister concern’s GSTIN)
Systems can be integrated using API, through the sister company of the taxpayer having the same PAN, if the same has been enabled for API. The API integration will need to be tested in a sand-box environment. After the test, the taxpayer will need to submit the test summary report on the sand-box portal. The IP used by the sister concern and the concerned taxpayer should be the same when accessing the e-way bill and e-invoice production APIs. The taxpayer will need to get registered on the e-invoice portal if not already registered on the e-way bill portal. If registered on the e-way bill portal, the same login credentials can be used. If the taxpayer is already integrated with API on the e-way bill system, the same API credentials can be used. If not, he will need to create a new API user.
E-way Bill API-enabled Taxpayers
System integration using API can be done for e-way bill-enabled taxpayers. The taxpayer will need to test the API integration in a sand-box environment. After the test, the taxpayer will need to submit the test summary report on the sand-box portal. If the taxpayer is already API-enabled on the e-way bill system, the same credentials can be used. There is no need for any further steps.
Step 3 – Generation of the QR Code
The e-invoice system will generate the IRN, and then digitally sign the e-invoice and the QR code (quick response code). The QR code will enable a quick view, and validation and access of the invoices from handheld devices. The QR code will consist of the following parameters:
- The GSTIN of supplier
- The GSTIN of recipient
- The invoice number as given by supplier
- The date of generation of the invoice
- The invoice value (taxable value and gross tax amount)
- The number of line items
- The HSN code of the main items (the line item having the highest taxable values)
- The unique IRN (hash)
The digitally signed QR code will have the unique IRN (hash) which can be verified on the central portal, as well as by offline apps. This will be helpful for tax officers who need to check invoices in places where internet connection may not be available, such as on highways.
Back-end processing of a valid e-invoice
The signed e-invoice data will be sent to the GST system where GSTR-1 of the supplier and GSTR-2B/2A of the buyer will be updated based on the details entered in the invoice. Wherever applicable, details of invoices will be used to update ‘Part A’ of the E-Way Bill. As a result, only vehicle number needs to be entered in ‘Part B’ of the E-Way Bill system to create an E-Way bill.
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